We've now got a couple of feature requests in with MS to 1) Provide an option to disable OneDrive sharing entirely and 2) Introduce GAL segmentation (or similar) functionality to OneDrive. No word on if or when these will be implemented though.
@ muppet,
If you're sticking to Exchange Online only then you can do a certain level of separation and provide students with blank GALs for instance - Then they can't look up any users within the AD structure of 365.
It's only when you move to any SharePoint based platforms (OneDrive, Sites, Delve, Video) that you'll hit similar issues.