Custom Capabilities with UserGeneratedContent

I have students at level 2 and I would like them to be able to post in a specific category, as well as apply a custom capability to their post. This means that students can only see their own posts and mine. I want this to happen via a radio button.

I have created a custom form for them to post into but I’m not sure how to apply this custom capability to a radio button, which will be: private (with a custom capability) and public (without custom capability)

I also can not think of a good way for their uploads to be loaded into a secure area for only them to access.

Any help would be greatly appreciated!!

http://www.theflamencogypsy.com/category/resources/
Username: Demo student
Password: DemoPassword