The World Models LA Flyer is a shoulder wing, tail dragger primary trainer ARF that sells for $99.99.

You can check it out at http://www.airborne-models.com

Edit: Forgot to mention, these planes are specifically designed to fly with the O.S. .40 LA engine, although your students could certainly buy whatever they would like. 5.1 lbs. total flying weight should be no problem for the frugal .40 LA.