Boy, your school certainly doesn't help you out much!! My school had a letter service, and just sent out the letters as I needed them sent.
But to answer your question. My printer prints envelopes. I use wordperfect, and just go into format and choose envelope. But it's almost more trouble than it's worth. However, once you've got all those adresses entered into the address book, it does make corresponding with them later easier. I think the address label idea might work pretty well, just make sure to remember to put your school as the return address, not yourself, as the letters are supposed to be confidential. In wordperfect you do labels by going into format and choosing labels.