My two younger sisters use a computer system at school that has a student ID based user/password system. My youngest sister is 8 years old and has memorized her password the last 2 years with little difficulty. She even made the remark that the kindergardeners use the same system. I think that a number system based on a frequently used number (such as student ID) is not a bad idea since it seems as though they have had no problem remembering their passwords, and it provides for maximum security against other students invading their personal files, or in this case tests.
On a side note, my youngest sister can still manage to bark out last years (and the year before that) codes. She is in no respects any more intelligent than the other students, nor does she have a better memory, but a reptition of numbers as thus (I believe the school uses these numbers as codes to buy school lunches) forces the child to remember. So in my opinion a system of number codes (that corespond to other student ID numbers where applicable) is a potential solution to your password problem.