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A good security admin. should never relent. Fight back, push the hacker out of your sys.I would never format the hard disk, I will find out the password change it, trace all the rootkits or trojans or worms, identify the hacker, defeat him.
i am guessing that this is not a server client network this comp is on. so tracing all the rootkits would be good if they uesed any because i am guessing that they did not come in through the internet but had physical access so a rootkit would not be needed he could do it manualy because if he didn't enter from the internet their would be no roughter logs or incomming connection logs. rember this is a school many students love to try and do this kind of stuff to say they beat the system which the haven't but SK's dont know that.