I'm with Erik, depending on the accommodations they can provide, that's not terrible. Now if they're putting you in a Salvation Army style tiny-ass room with a public toilet type thing, I'd consider elsewhere, but if it's livable as a dormitory, then just stick with what you're offered if you can afford it.
If it's not satisfactory, then what a lot of my friends had ended up doing was renting a house down the block from their universities. Lots of space, freedom, but you're going to need a good few people to pitch in as house renting for one person is not so affordable. Living with people might sound fun for a while, I would personally prefer a place where I can occasionally have my own quiet space even if it did cost me a little more.
The choice is yours as this is very much a budget and preference thing. If you're fine staying with random people and don't really care about commodities, then you have a myriad of options that lay in front of you. Also, camping.