Maybe some people still need to use Microsoft Office for school or work but for personal docs its high time migrating to alternative due to increasing user hostile shenanigan by gafam.
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Switch to LibreOffice or better tools than WYSIWYG editors such as Latex.
What can I do as a student who is required to work with these apps? Is there a guide for students on how to minimize privacy invasion?
A similar issue, Google in schools, was discussed in this thread.
Essentially, you can compartmentalize by using Microsoft Office (as absolutely necessary) solely for school activities. This may safeguard against your personal life being uploaded to the cloud. Compartmentalization has limitations however, so think of it as just harm reduction. It is difficult if not impossible to compartmentalize your identity, thoughts, writing style etc into separate compartments, and the cloud backups would get a hold of that.
That being said, unless/until you, other students, parents, teachers etc who think alike convince your school to drop Microsoft products for LibreOffice or something else, compartmentalization and exposure minimization may be the best you can do. You could try refusing to use Microsoft outright (if it is safe for you to do that), make the school very aware you are unhappy with Microsoft in schools, or change schools.
LibreOffice can read/write files in the .docx format, they should be indistinguishable from the point of view of someone who receives it from something generated by MS Word. But for things such as assignments you can probably also submit PDFs. It is unreasonable for the school to require the purchase of proprietary software in any case or expect that students even run a compatible OS. They can probably insist on the online version of Word however, which is effectively sandboxed by the browser.