I don't know if they are actively monitored, but they are stored and can be reviewed by administration. I have no idea if they are kept on school servers or external servers, or for how long they're kept. My school uses Outlook.
Ditto upright - you'd be foolish to use school (or work) e-mail for anything but school (or work). The fact that work e-mails belong to the company as part of its working record is the reason that using a work account for personal correspondence is considered unprofessional. Students get used to using their undergrad e-mail as personal, I know, but my medical school, for one, is run like a little company rather than a college.