As far as I know, there is no district or school feature for Diigo educator accounts. Each teacher will need to create an account (or you can create special accounts for them in the teacher console). From there, I don't think there would be anything stopping you from having the teachers create groups for their classes and having the students join them. I can't remember if 'student' accounts can create groups or not. If not, you as the admin could create groups for the classes and assign the students to the appropriate groups.

This is something I'm pretty sure Diigo is looking at, but it wouldn't hurt to put in a feature request. This could be a powerful tool...

My suggestion would be to create a large group where everyone can share resources, and then smaller groups for individual projects. If your students are using the toolbar, it would be really easy for them to share resources with the different groups.

Another idea might be to have each small group together and use a tag (like the course and session number) for the whole class.

I would be interested to hear how this whole thing works out. Feel free to contact me on Twitter or through Diigo (jasonschmidt123 in both places) if there's any way I can help you out.

@Linda - unfortunately at this time, I'm not aware of a quicker way to do this. Diigo is very responsive to their users, so this might be something to request from them.