'Ah Sir, but you set us homework last week. That's well gay!'
Undoubtedly (in my flawed and dysfunctional opinion) the most prevalent and insipid prejudice that students uphold is homophobia. The great problem that I see with this is the uptake of the word gay into the popular lexicon as just meaning bad. Although a massive amount of my male students do have a genuine revulsion at the thought of gay men I think a majority of them use the word gay as a pejorative without any concept that they can be construed as (read are) being offensive.
Obviously homophobic prejudice is a big topic with the recent decisions about gay bishops flirting with the front pages in a way only the recent Jimmy Saville case can, but many students would much rather discuss the latter of those two headlines than the former (Partly, I believe, because of the sensationalisation of sex offenders to the point of voyeuristic cultural fetishism.). I can only imagine (having not experienced it myself) the difficulty of being a young gay student struggling to come to terms with the reality of themselves in an environment that is filled with the usage of a label to fundamentally mean something is undesirable.
It is difficult for teachers to constantly reprimand for this use of language because for many users it is not meant in offense; It has no connection to its homosexual synonym. Those students who are genuinely homophobic or intend to offend will use much stronger terms than gay. The problem with this use of the word is that it has its meaning eroded and replaced. Gay will no longer mean Gay. Gay will be bad, or unsavory or unfair, but somewhere in its etymology the idea of homosexuality will remain as a relic and the idea of homosexuality being wrong will be forever linked.
This meaning is already changing, and is possibly changed irrevocably but it is well worth a try to change perception. It is also falling into the popular rubric of teachers. And I have had to check myself recently as i began a statement that would turn itself into a derogatory use of the word gay, but it is worth it I feel. The dehumanisation and erosion of shock is among the most dangerous things that can happen in language.