Just to throw in my $.02
First, what kind of teacher are you? Are you employed by a school? If so, you probably qualify for the discounted educational Photoshop price.
I would recommend Photoshop Elements. Like FM said, it has all the features you'd likely ever use in Photoshop. I use the full Photoshop on my desktop machine. Photoshop Elements came pre-installed on my laptop, and for most of what I end up doing with it, I didn't even bother installing the full Photoshop since Elements handled it.
I think PSP is a little cheaper than Elements, but Elements is worth the difference in price, from my experience.
Gimp is free, and very powerful, but the interface is awkward and clunky. If you're not a tech geek who likes to spend time messing with computery things, I wouldn't recommend it. You'll spend a lot of time trying to figure it out.