Choose Your Dorms: Residential Rental vs University Housing

I think both and there's some flexibility in it.

For storytelling, I usually my my freshmen sims stay in university housing (dorms) just so they can get to meet other sims. Because the university housing basically pairs them with a roommate and prefills all the other bedrooms. Now once my sim has completed a few courses, maybe has a boyfriend/girlfriend or wants to be able to cook, I plan to move them off campus to a residential rental to finish off and graduate.