[Goronmon]

How big of a difference is it between creating and maintaining an e-mail address for each student, and instructing students as to how to create an e-mail account with say Gmail, for instance?

In both cases the student needs to figure out how to access a mail system in order to actually use the e-mail address.

[pyroman]

Also, a lot of universities have their application process online and require an e-mail address to apply. So the information is already available and that would eliminate the step of requiring the student to set up forwarding manually.

If it's already a method of contact between you and the university, why add another place to look by creating a separate inbox?