User accounts can be created by network administrators and by blog administrators.
However, it is really important to note that if a blog administrator (usually the class teacher) tries to add a new user by clicking Users > Add New User they can only successfully create a new user if they use a real email address. This is because Wordpress sends out a confirmation email prior to the account being created.
If a class teacher wishes to add users to their own class blog they should go to Users > Blog and User Creator. This is a plugin that allows blog admins to set up logins by filling in the form with a dummy email and password.