Hi esubvaria,
PasswordMaker 1.6 (due before the end of this month) will have the ability for you to choose where to load/store the passwordmaker settings file. This should solve your problem.
In the meantime, you can do the same thing by having each student create their own
Firefox profile. Not only will each student have his own passwordmaker settings, but they'll also each be able to maintain unique bookmarks, cookies, history, etc. Profiles can also be
password-protected so one student can't delete another's bookmarks/passwordmaker settings/cookies/history/cache/etc.
Hope that helps,
Eric