I know this thread is a month old but there's just something that you might want to note.
I have a friend who emailed one of the ISS team and what I got from the general gist of the message was that ISS's main issue with the use of routers is that some students set them up incorrectly and leave them open without a pass-key. Leaving a router open means that anyone within the range of the router can access your internet and increase your quota usage quite rapidly. If you were to set up a router, make sure it is hidden and you set up a secure pass-key so that other students cannot use it.
Also, like Curtisjk said, ISS have got much better things to do with their time than hunt down students who are using routers, that being said, if your quota usage starts to increase rapidly then they might investigate and if they determine that the increase is due to you using an unsecured router then they might restrict your internet access.
Don't take what I say as matter of fact though, it's completely your decision. I would suggest e-mailing ISS yourself and asking whether or not it would be okay for you to set up a secure router in your room that only you would use.
tl;dr
Ask ISS yourself, they've told a friend of mine that their problem is not with routers but the way some people set them up.
Hope this helps.