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I recently attended a professional conference that was sponsored by a major software manufacturer. The emcee of the conference was a motivational speaker who was hired to help us all make more professional value out of our time by being more social. He forced us (okay, bribed us with cookies) to stand up and break through the wall of discomfort by just looking them in the eye, smiling, and saying "hi" to 3 people standing around us. His point in doing this (which is backed by scientific research) is that simply addressing people and saying "hello" to them breaks down so many mental barriers to meeting new people and forming a connection. And you know what? He was right.
You are in one of the best social environments that you will ever be in for you to practice this skill in college. More than likely you will be in classes where you will work on team or group projects. Start small, maybe with your classmates, and practice just saying "hi" to someone you don't know. It will be strange, but it will get easier.
As for the conversation - start listening to the things people ask you when they meet you... you'll usually get asked questions like, "What's your name?", or Where are you from?", or "What kind of music do you like?" - smalltalk things like that. You can collect these questions as a set of "conversation starters" that you can always ask someone. Expand your practice of saying "hi" to new people by asking the first question from your list of conversation starters. Over time, you'll start to get more comfortable asking questions and will move away from your standard opening lines to questions that are more relevant to the group or to your situation.
As for why this is so important: nobody gets too far on their own, and we all need to make relationships to help each other succeed. Pretty soon you will realize that you have knowledge and skills that can help someone, and helping them because you want to (or because they need you) will help you overcome that shyness.
Meeting new people is always awkward at first but it gets better. Join clubs and attend school activities so that you can meet people that share your interests. Simply say hi and that this is your first semester and that you are trying to meet new people and make friends. You will get less shy as you gain more experience in social situations, it's just a matter of practice. You don't have to be the life of the party to make friends, simply be yourself and relax as much as you can.