I'm not going to tell you anything different than the doctor. They sell a C ring (you fill in the C) that does the same thing for guys so it's not that other guys don't do this and I'm sure they wouldn't if it caused significant problems with nerves. Of course, don't do the rubber band thing anymore. Your doctor advised waiting it out. Give it another month. I know you are missing being sexual but it's a drop in the bucket of time. You should get back to normal if you just leave it alone for a while.
If you don't trust your doctor, get a second opinion. And remember, psychological state can affect libido. You are worried, anxious and feeling low. That's all going to impact things and compound matters. If you find you continue to be depressed and anxious, that's also something to speak to your doctor about.
When I had my appendix out, near the incision, my skin was numb after the operation. I asked the doctor about it, and he said, "Oh, I'm sure the incision just cut through a skin nerve. It's not a big deal, nothing to worry about..." And just as I was relaxing, he added, "...sensation will come back in about a year." And I was thinking, "a YEAR? and it's not a big deal?"
But he was right. First of all, I didn't know skin nerves regenerated, and second of all, sensation did come back within a year. It was really weird to have skin on my abdomen that felt warm to the touch and looked normal, but was numb. But it did heal. It just took several months.
If your rubber band managed to pinch off a skin nerve and damage it, I could imagine that the lack of sensation would mean that masturbation means little, and it might make you feel like you're describing. The good news is, if that's it, you might very well experience the same slow regeneration that I did. It certainly didn't take only a month, but my skin felt normal by the time even eight or nine months had gone by.
One way to check this is to see if you still get erections in the night. Those wouldn't be dependent on the skin for sensation (I don't think. Unless nighttime erections also require the tactile sensation of the penis touching something.)
I'd try to focus on your finals at the moment, but when they are all done, maybe an area of research is to check on the angle that the rubber band damaged a superficial nerve, and also, you might talk to a dermatologist instead of a urologist if you think that might be part of the puzzle.
Try not to worry, the body has many marvels and is able to find many pathways to functionality.
That your doctor thinks it is all in your head is to consider. Psychological reasons is one of he main reasons for ED. Do you have anxiety or depression? Are you stressed (like with your finals?). I'm telling you man, this can greatly affect the capability for erection. If that is not the direction you want to go, see a urologist. Your doctor can't tell you no to this if you want a second opinion.