By default, every account provisioned by Identity Hub is assigned a randomly generated password upon creation. The configured initial password policies determine whether this password is used, and if so, how it syncs to downstream targets. Password policies can be configured at various levels of granularity, based on the user's role.
For students and sponsored accounts, the default policy applies to any user that does not fall into a custom initial password policy. Default policies can be edited if the randomly generated password is not desired.