Hi Raj,
Teacher says something and it plays out StudentA's speakers, through the air, and back into his microphone, whereupon it's picked up by Student B, Student C, ... You need to break the path from the speakers to the microphone:
You could institute a system whereby a student's microphone is disabled unless he's holding down a button, and then his speakers are disabled.
You can get them to all wear headphones.
You can simply not allow them to send any audio at all and use text messaging to communicate with each other.
Eric.