Legal?  The school gave them the email account.  Once they are out of the school, the account can be terminated.  Businesses do it, as well as colleges/universities, etc.  I would give all departing students several warnings (written and electronic) about the email being removed, but I see no reason why it cannot be deleted.  There is a Google tool that allows them to copy all information from their account to another Google account.  You could provide them with access/directions to that tool and encourage them to use it to transfer all their data, documents, and emails to that other Gmail account.