Site admin/users/permissions/define roles.
Edit the student role. Search for the grade permissions. Remove any that allow the ability to grade or see other students grade.
There is a reset role to default option which I would recommend. If someone has gone in and allowed this, it is hard to tell what else has been done to that role. The student role is very well set up in its default mode and should not be changed. You are always better to copy the role and give it another name and then change settings than change the default role.