Students have permissions to access and read each others home folders - after setting up mandatory profiles

I don't want them to have this access.  I don't know what I have done wrong in setting up these mandatory profiles.

I created a shared folder called "Profiles$" in which I created the "" folder.  Then copied (using system applet) the prepared profile from a workstation to this folder.  Renamed Ntuser.dat to

Then created another shared folder "Students" which would contain the newly created home folders.  
"Students" folder share permissions:
students = read, change
teachers = read, change

"Students" NTFS permissions
admin = full
Users ("Domain"\users)= Read-execute, List folder, Read, Special=Create files\write data, Create folders\append data

I then created some student accounts on the DC, pointed to the "" folder and the "Student" home folder.  Then logged on from a workstation.  The students home folders were automatically created under "Student" and everything seemed fine until I realised that the students had read permissions to each others folders.

Obviously I can go in and change the permissions on each individual student account to fix the problem but
1  The problem permissions are being inherited
2  How can I avoid this problem in the first stage of setting up each student profile, before their home folder is created, so that when it is created it has the correct permissions?
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BrianIT ManagerCommented:
The reason looks like because you have Students share permssion as read and change and Users group (which includes the students) NTFS permission as Read-execute, List folder, Read, Special=Create files\write data, Create folders\append data.

With these permissions all users in the Students and Teachers groups will have read permission.  Take a look at the following article and see if that helps.


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Alistair7Author Commented:
I'm a little surprised that I need to do so much modifying of permissions as described in the above article.  I would have thought that windows would have automatically set the appropriate perms for the Administrator, System, Owner and Username ACE's when a new "home" user folder is created on the server the first time the user logs on to the domain.

I don't know if I made it clear enough above that I actually have 3 independent shares:

Profiles$ - in which all user profiles are stored.  Student mandatory and teacher roaming profiles.
Students - in which student user documents are stored within a folder with their username (these folders are created automatically by the system)
Teachers - in which teacher user documents are stored within a folder with their username.

Is this a silly thing to do - to save their documents into a separate folder outside of their Profile$ folders?
It seemed a good idea at first.

By the way Brian, I have opened yet another question on Ownership.  I'm sure you could answer it very quickly.

I'm still in the process of setting up 2 systems at 2 small schools. (60 students each)  So I really need answers to these questions to get these systems up and running.  I'm having to use my summer holidays for this work, which I do not want to do actually.  
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Windows Server 2003

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