What is the best area for art students to live?

I agree with AKnight that the Fishtown/Northern Liberties area and anywhere neat the Ave of the Arts are great places for art students to live. In Fishtown/NoLibs, you can get a cool loft style apartment that has ample room for creativity to flow. If you rent a smaller apartment in these areas, there are plenty of studio rentals starting at around $100/month that you can rent to use as your art studio. Being near the Ave of the Arts puts you right in the middle of art stores, theater, restaurants and more. In either place, you'll be surrounded by like-minded individuals.

Good places for an art student are Fishtown. It has a growing arts community. Queen Village or Northern Liberties are also good places for students of the arts. Oh, and ANYWHERE close to the Avenue of the Arts. Trust me, it's well worth being a part of that environment.