As iToaster said, they're concerned about Activation Lock. The school can ask you for anything they wish, and you have the right to refuse. If you refuse, however, they are probably within their legal rights to refuse to issue you an iPad or demand you return one they have already issued you.
This not being a technical issue, any further discussion of the matter is not really appropriate. This is an issue your parents would need to discuss with your school's administration to see if they can work out a better policy. Perhaps a better policy would be to require you to prove when you hand the iPad in that iCloud and Activation Lock are not present or have been removed. But again, that's between you, your parents, and the school to work out.
Regards.