A student living in DC can get either a residential parking permit or a reciprocity permit for the parking zone where they live. If that permit is valid for the zone where they go to school, then they can park near school using that permit. If not, they can't. Why should students be treated any differently than anyone else? Also, AU law has its own parking policy which prohibits student without a valid residential parking permit for that zone from parking on the residential streets around the law school.
But that's the point - DC has enacted rules so students with valid residential permits CAN'T park on the streen near the schools.