Really, you should be using Security (accounts & privileges) like it is intended. Otherwise any other method of tracking, hiding, and manipulating authorizations and passwords will NOT BE SAFE and students will be into other student's information. Security was designed for just that purpose. Anything else can be easily hacked. See File > Manage > Security.
can you elaborate more on why "any other method... will not be safe... Anything else can be easily hacked."
You are asking about a huge subject. If you want to know then I suggest you post this very question of:
'I was told that 'any other method that proper Security be easily hacked.". Is this true?'
You must register but it is free. It is administered by the two people who wrote the book on FileMaker Security (Steven Blackwell and Wim Decorte'). Ask them that question and you'll get more information that you can possibly absorb but it will show my point.
Simply, anyone can, including almost-clueless students, can open a db in its raw state and take anything. Security is designed to protect data. Using privileges, you can keep one student from ever seeing another's work otherwise it is impossible to do so. And I guarantee that, if you store the password within the file, and only mask the password, it can be stolen by a five-year-old.