I think that landlords having a blanket 'no students' policy is appalling and skating on very thin moral ice. It reminds me of that Wilson couple who, until they started selling them off and 'retiring', owned half of Ashford. They don't allow the unemployed, single mothers, self-employed tradespeople and Asians "because they will probably leave the house smelling of curry".
Would you refuse to rent to teachers, doctors or lawyers? They were all students once too. By all means, if you actually meet somebody and have valid concerns about them, feel free to decline them; but just to discriminate against a whole wide disparate group of people in that way is just awful.
People who rent invariably end up paying far more money each month towards somebody else's mortgage than homeowners/buyers pay for their own. Some do it through choice for various reasons, but the vast majority are pushed into it because they're unable to get on the property ladder (I don't have a downer on good landlords, but some would say this is because of people buying second and third properties and thus pushing up prices for everybody).
If there is no sign of criminal, antisocial or dubious behaviour on the part of the tenants, why should they be treated with suspicion and like second class citizens, unable to live freely in their own homes, for which they pay, just like anybody else? As has already been said, landlords aren't 'doing them a favour' any more than Tesco are doing you a favour by letting you buy a trolley-load of food each week - it's just business.
We see this attitude on MN a lot, wherever there are relatively petty neighbour disputes and people are urged to 'report them to their landlords', as if they were naughty children or living their entire lives on some sort of probation.
Yes, there are good and bad people - some of them rent, some own their homes; some are students, some are not. Nobody would dream or putting up those wicked 'No Blacks, No Irish' signs these days, but renters and students are fair game, it would seem.