As a teacher:
1) Click on your class and click "Edit Class".
2) Ensure that you see the all the usernames that students are using to login. If a student's username is not listed, ask them to join your class (directions are on the bottom of the page).
3) Make sure the "Allow Collaboration?" setting is set to "YES"
Click "Save" at the bottom of the page.
Then you can go back to editing your group book and add students to it.