Though I'm still against dublicating the efforts for a webmail system (there are really good ones out there that are developed with a significant amount of effort) itself, I am pleased that your students are going to work on it.
They might take a look at IMP 3.0, which is the webmail system we are using for 30000 people and they are very pleased so far. And yes, we do have integration into ACS working, with tools to signup users to the webmail system and other integration work (isn't HTTP cool 😊).
If you want surely Venkatesh can give your students a demo otherwise look at http://www.horde.org/imp/3.1/
