I have never tried this, but have you considered the possibility that you put a HTML block on the page and you give editing rights to your Students in that block? I know you can override permissions to give Students editing rights in that block, or make them teachers in the context of that block. The only thing I have no idea of is can you stop students from editing someone else's work? There should be a way it can be done and it may include the creation of a new role, exclusively for that block. Don't know if you would be able to set the plain text editor as the default in that area, either. Hope this sets you in the right direction if nothing else..