
When you set up a student account, the e-mail address is used so the system can e-mail the user their user name and password.
Some people put nonsense in there. Others put the same e-mail address they use themselves: j.teacher@schools.k12.blah.us, for example.
These are both bad policies.
The e-mail address is optional, so if you're not going to put a real address in there, you should just omit it. When you put in false addresses, we get bounces here when your user requests their user name and password (plus, they never get the information, anyway). Worse, if you use YOUR e-mail address for all of them, you will be unable to retrieve your login information because the system won't know which one is you.
Bottom line: If you're not going to put real information in that box, omit it.