Wow! "complete control" offered to a 6th grader on a shared hosting platform? While I wish you every success with your project, I hope they place your site(s) on a different server than the one I am on! .
Seriously, it sounds like a great plan, but I would rethink the control aspects just a bit (depending on exactly what you mean when you say complete). That said, seiler's suggestions about WordPress MY are good, though I would point you to The Lyceum Project which is based on WordPress code, but has a different (and, in my opinion, better suited for use on a shared server!) design structure. It is also much easier to install on DreamHost.
For all practical intents and purposes the students' retain "complete control" of their blogs, but the central management functions (control of the blog as in turning it "on" or "off") will stay with you.
Of course, if you really meant "complete control" than the best way to do that would be to make each blog it's own complete website (student.domainname.tld) , running under its own user "studentname", and with it's own "one-click" install of WordPress - DreamHost accounts offer adequate functionality for that type of deployment.
Good luck with your project.
**edit - oops! I got distracted while typing this post, and now see that lensman already suggested Lyceum - sorry 'bout that!