Hey,
I vaguely remember reading about a similar problem in another discussion forum. The problem might be that you have assigned student roles through the Users > Permissions > Assign system roles option, that is, each student in the system has automatically become a user in each course. To avoid this problem, assign student roles through Courses > Add/Edit courses > [Course category] > [Course] > Assign roles option.
I hope this helps.
Gergely