There are a few ways you can reset a student password.
As a Superuser:
Go to Account Settings by clicking on your name in the upper right hand corner of your browser.
Click on Students -> Active
Find the student you want to reset the password for and click edit. Enter the new password (twice) and click save. The student can now log in using the new password.
As a Teacher:
If students are allowed to change their own passwords and teachers are allowed to "Act as" students, then a teacher can act as a specific student and allow them to change their password by clicking on the My Settings in the dropdown on their name in the upper right hand corner of their browser, then click My Profile > Change Password
Additionally, you can allow students to change their own password. If you edit the student (or during user import) just mark the "Require password change at next login option". This will require them to change their password the next time they login. You can also disable the option of allowing student password changes through an option on Account Settings -> Account Management -> Feature Settings -> User Controls