Need Help Setting Up Xserve to Host Student Websites

I have two Xserves in my lab. One acts as Open Directory and stores all of the students' home folders. The other one I have setup as a Web server and is currently hosting my class page. In addition to hosting the class page, I want it to host student Web sites (~220).

I do not not know how to set it up so that my students have an ftp account and a folder to upload their sites. I'd like to be something like:

hxxx://server.com/students/student1/index.html
hxxx://server.com/students/student2/index.html
hxxx://server.com/students/student3/index.html
etc.

I assume there must be a fairly simple way to do this. Hosting companies do it all of the time and ISPs often provide Web space. I have Apache, FTP, and AFP running. I create the student accounts on the OD server using Passenger from downloaded text file of student rosters.