I contacted Lion Brand yarns about using their on-line patterns in class and got this reply:

Lion Brand is happy to be participating in the CYC Discover program. In addition to the Lion Brand patterns provided by the CYC, you may use patterns from our website in conjunction with Lion Brand yarns. Please be sure to leave the copyright intact when providing copies to your students, and please indicate that they are free from LionBrand.com.

They have some really cute freebies and some summer totes that would work nicely.
Enjoy!