AI's article indicates the iPhones are on loan from Apple, which is similar to what I've heard.
So it doesn't look like the iPhones are being paid for by the students or the school, but provided by Apple.
arn
Apple did something similar with VirginiaTech University and the Xserve program where they upgraded the "Big Mac" at no charge, unless I am mistaken and pardon me for not having knowledge of the deal.
Sound more of a testing ground for future iPhone/iPod Touch upgrades/updates. This could be big, though I remember a few years back when the iPod Video was released a 3rd party developer had released cinema glasses, if that can be ported to the new iPod Touch and iPhone that would be the killer app I guess. Though on the other side it would also distract student to surfing for unrelated information.