A college located in the same state as Lawndale, mentioned only in canon in "Is It College Yet?". Due to the fact that Lawndale's location is deliberately ambiguous, "State University" is almost certainly not its full name and the characters are leaving off the state's name from it. (Maryland is the state usually assumed to be where Lawndale is, but in real life the state university is University of Maryland)
Next to nothing is known about it, save what was revealed in the movie. According to Mack Mackenzie, it lacks a business school, Jane Lane speaks disparagingly of its art department (which doesn't request samples from its applicants), and Brittany Taylor says it has one of the best cheerleading squads in the country. Both Brittany and Jane applied to go there, the former willingly and the latter bregrudgingly. Neither student is accepted - for all of State's detractors, it has better standards than Great Prairie State University!
Confusingly, it has a similar name to Lawndale State University, about which even less is known. Based on Mack's comments on only being able to afford "State University", it's cheaper than Lawndale State (unless he was using that as a term for both places and Brittany didn't realise).
Curiously, it shares a name with the university where another MTV cartoon, Undergrads, takes place. Since Undergrads aired the year before, this could be a deliberate reference - and that show's implied to be set in the same general area that Daria is!