Northwestern has also gone with Gmail and Google Apps for students.
Universities are growing rapidly and per-student budgets are falling. Arizona State University is using Gmail and other Google services to cope with this dilemma. In doing so, they hope to exploit Google's accelerating IT technology improvement trajectory and the increasing efficiency of the Internet as an application platform.
For more on the Arizona State project see:
Should our university be utilizing Google services? For what applications? What other services might we use to advantage?