Collection of art college held in it, in modest, largely decorated surroundings (7,7)

'collection of art' is the definition.
The answer and definition can be both man-made objects as well as being singular nouns.
Maybe there's an association between them I don't understand?

'college held in it in modest largely decorated surroundings' is the wordplay.
I cannot quite understand how this works, but
'college' could be 'u' (abbreviation for University) and 'u' is located in the answer.
'it' could be 't' (abbreviation. e.g. in 'tis) and 't' is present in the answer.
an anagram of 'largely' is 'gallery' which is present in the answer.
This explanation may well be incorrect...

Can you help me to learn more?