For something different, try making Christmas ornaments out of recycled materials. Brainstorm with your art teacher how that might be accomplished in an aesthetically pleasing way, or tackle it on your own with bits of plastic, paper, aluminum foil, string, wire, etc.
Challenge students to use as many different recycled materials as possible, or to use them in such a way that they are no longer recognizable as their original form. See who can create an ornament that will compost best or last the longest. Make an ornament by recycling materials that are otherwise not recyclable in your area.
You can easily apply the recycled concept to ornaments or decorations for other holidays as well. For some inspiration, check out this example of a beautiful wintery art installation on the campus of the University of Kansas. It was made entirely from recycled plastic water bottles! What can your students create?