That is an almost every college rule. Simply no room for everyone to keep one inside, especially when you consider a large number of them never see use, and colleges don't want to deal with students lugging them around inside buildings.

Use your current bike unless you have a specific need for something else. Heavy, cheap MTB are perfect for college campuses, where damage is likely when the next guy comes late to class and tosses his bike on the rack in a manner that results in his handlebars in your spokes, and where theft is rampant. Ditch the knobbies, toss some commuter tires on it, and it will suit you well. MTB will keep you more upright than a road bike, too, easier to pick your way through a crowd.