What is the ruling on collective punishment of students in schools for a sin committed by one student?

It is not permissible to punish an innocent person for the sin of a guilty one. Indeed, a person is held accountable for what they themselves have earned, and not for what others have earned. This is based on the Almighty's saying: "And no bearer of burdens will bear the burden of another," and "For it is what it has earned, and against it is what it has committed," and "Every soul, for what it has earned, is pledged." This is a fundamental principle of Islamic justice.