It depends on context. I wouldn’t even call it a “term” just descriptive.....as in, students coming/going back.
When coming from of a College, I would probably think it meant students that have matriculated there previously as opposed to new first-year students..... so “returning students move in day house vs new students move in day”.
Coming from a parent talking about the kids going back to school, it could mean something totally different ....like “driving my returning students back from being home for vacation or something”.