Sororities and fraternities are societies (clubs) that have more structure and prestige than normal school clubs (chess club, baking club, etc). They have rules and rituals and lots of funding. Because of this, some have their own designated housing and others have understood housing (they rent a place together, not necessarily with funding). They provide those in it with connections and opportunities. Each one has their own reputation, their own guidelines, traditions, and goal. Some are for volunteering, some are for career paths, some are for fun. A fraternity is all male or co-ed (male and female), while sororities are all female. In college, they're known for parties, charity events, and their initiations. I peronally didn't join, but I had friends join culture oriented ones (Indian sorority) and volunteer oriented ones (volunteering fraternity). They're a super interesting aspect of American college culture.
Rachel would have likely gone to a sorority for fun and lived in a house with all her sorority sisters where they threw parties and events.