Assigning students to write about some hero is okay, and if this is the assignment, I don't see anything wrong with writing about some religious figure.
I am not sure why the teacher has to have students pick a hero, though. There are an infinity of topics that could be assigned that would cause students to think about how to write an effective essay.
When I went to school, we had some sort of prayer in Elementary School if the teacher wanted to say one, which was not always the case. We always had the Pledge of Allegiance to the flag. I cannot recall that these prayers had the teeniest bit of effect on me, one way or the other. I don;t think my feelings for the flag were affected much, either. I would never burn a flag in protest, though I can see where this is a valid form of expression, and it does tick me off when some moron business, especially used car lots, fly a flag day and night in weather both fair or foul, until the thing disintegrates into a fluttering assortment of pink, white and blue tatters.
I think that I am more pissed off about such ignorance of flag etiquette more because I was a serious Boy Scout and Explorer than anything I learned in school.
If everyone could agree on a common prayer, that would be just fine. But this is highly unlikely. So the best thing to do is to leave the manger scenes up to the Chamber of Commerce or some other civic group, and let kids pray silently when they feel the urge in school. I seriously doubt that commandeered mass prayers have any effect on anyone. Exceptionally long mass prayers mostly caused me to daydream.