first you need to group your elements, you can do this e.g. like this:
Code:
<?xml version="1.0" encoding="utf-8"?>
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:template match="/list">
<lists>
<xsl:for-each select="student">
<xsl:if test="floor(position() div 2) = floor((position()-1) div 2)">
<list>
<xsl:copy-of select="."/>
<xsl:copy-of select="following::student[1]"/>
</list>
</xsl:if>
</xsl:for-each>
</lists>
</xsl:template>
</xsl:stylesheet>
then, as you need separate XMLs probably you can use smth like <xsl:result-document>:
http://www.w3.org/TR/xslt20/#element-result-document, which is available from version 2.0