Select by "Not-in" Location?

Use Select By Location, have it select all students within the boundaries, then reverse the selection. Ta da, you have a "Not-In" selection!

To reverse the selection, use the "Switch Selection" command. This can be accessed from at least two different places in ArcMap.

Within the attribute table:

Or, from the Table of Contents, right mouse click on a layer menu:

An alternative to this method would be to select all features, use Select By Location, pick the "remove from the currently selected features in" selection method, and have it remove all features that intersect the source (boundaries) layer.