students' perceptions of schools and selves

You raise a complex question here, and I agree that "whether or not a student knows better that the school is really the problem, there must be some level of internaliztion of these beliefs."  This internalization is a form of hegemony, I think; it supports a dominant culture understanding of reality in such a way as to infiltrate the belief system of even those most hurt by this understanding, and their tacit agreement in turns confirms that dominant understanding.  On the other hand, you raise the example of Jessica, and she seems to hold the contradiction or tensions here, as she maintains a sense of being entitled to what she wants even as at some level she may be internalizing the school's negative assessment of her.