This sounds like the ending to Alex Winter's excellent Freaked (1993).
Set in Randy Quaid's 'freakshow', rather than a school, the ending otherwise sounds pretty spot on. There's some inspired casting in this film, with Mr T as the bearded lady, Keanu Reeves as the dog-faced boy...!
Yo, you are my savior! This scene has been on my mind for 10 years now. I can't say how grateful I am to finally have an answer! I searched it and damn all the images just brought me back to watching this and remembering the characters.
Thank you!