The account rights would be relatively easy: user group "Faculty", "Students", and perhaps "Administration". To make the accounts, I would say find a database listing of all the students and try to automate the account creation somehow? My other thought was perhaps you could create a web interface to allow each student to go in, enter his or her information, and then just have you approve the account request. If this were possible, you could have all the students sign up in each english class or homeroom or something. If you did it this way, each student would automatically have to set an initial password so [ideally] no account theft would take place, once the account request data is confirmed.
Another thought: if you create the accounts for the students, use their student numbers for the passwords. This should also be easily retrieved from a database query. As for how you could actually do this, you'll have to look elsewhere =) Sorry. Hope this helped a bit though. And, for your sake I hope you're not forced to do this by hand. If you are, pawn it off on the grade-level administrators or counselors!!!
/L.A