Check out Google Apps for Schools.
Or if you use Active Directory, like me, I use [WordPress with the [URL="http://wordpress.org/extend/plugins/wpldap/"]LDAP Authentication Plugin. This should help you get started [URL="http://codex.wordpress.org/Create_A_Network"]creating a network](http://wordpress.org) so that all your student blogs/sites can be managed (this step should be first before getting the LDAP plugin working!).
I also use these plugins to help me with the automatic blog creation:
I know there are others I use, I just can't remember what they are off hand. I had to do some customizing for some, so they won't be of any use to you.
Anyway, if you don't want all the work that goes along with WP, I suggest Google Apps for Schools.