I run an alumni website for a school. The school would like to provide email addresses for alumni, via the site. For example JohnSmith@HSAlumni.com
There are over 3500 alumni registered at the site. If you have set up something like this I would appreciate suggestions/recommendations.
I have seen products like SquirrelMail and am curious if that is the type of product I need. Thank you for your feedback.

Google Apps Would do exactly what you need.

If you have no experience running a mail server you will soon run into spam issues (spammers hijacking not receiving)