How do you handle allowing students create groups?

Great suggestions! We have a number of schools that are finding success with Office 365 Groups. In addition to, or as an alternative to multi-domain configurations (https://support.office.com/en-us/article/Multi-domain-support-for-Office-365-Groups-Admin-help-7cf5655d-e523-4bc3-a93b-3ccebf44a01a), you may want to employ naming conventions to prepend/postfix information to these groups' names to identify them visibly as student-created groups (https://technet.microsoft.com/en-us/library/jj218693(v=exchg.150).aspx). Note that naming policy today only applies to groups created in Outlook/OWA, but we're expanding that to other group endpoints (e.g. Planner) soon. We've also released profanity filtering on group names leveraging the same filters applied in other MSFT services. Enabling this requires a bit of code, and isn't straightforward today though we're hoping to make it easier in the near future. PM me and we can work together to get this configured on your tenant.