You Learn Something Everyday

In reading the new P.G. Wodehouse biography, I noted several instances in which the author quotes Wodehouse and the word "'Varsity" is used. (Note the apostrophe before the "V.") I was curious if the word "varsity" was indeed, a contraction. In my copy of Webster's Collegiate (I know, I know, there are better ones than that.), I found the following origin of the word.

by shortening and alter. fr. university

And the #1 definition; Brit.: University!

I think I always kinda assumed that was the case, but it never hit me until I saw that apostrophe.