knockout.js data-bind each array of object

Knockout doesn't work quite like that. You need to build your JSON into some objects before you can use the foreach binding on it.

For example, create a student object with the properties that you need:

function Student(firstName, lastName) {
    this.firstName = ko.observable(firstName);
    this.lastName = ko.observable(lastName);
}

Then when you have your JSON string (maybe in the success callback of your AJAX load) you can create a collection of these student objects from the data:

school.students = ko.utils.arrayMap(json, function(item) {
    return new Student(item.firstName, item.lastName);
});

You can then use the foreach binding as you have done in your small example. Of course I am assuming that you have created a viewmodel and correctly used ko.applyBindings().

they have a knockout mapping plugin for this. run snippet below.

var data = {
  "school": {
    "students": [{
      "firstName": "John",
      "lastName": "Doe"
    }, {
      "firstName": "Jane",
      "lastName": "Doe"
    }]
  }
}
var viewModel = ko.mapping.fromJS(data);

$(document).ready(function() {
  ko.applyBindings(viewModel);
});

<script src="https://cdnjs.cloudflare.com/ajax/libs/knockout/3.4.2/knockout-min.js"></script>
<script src="https://ajax.googleapis.com/ajax/libs/jquery/2.1.1/jquery.min.js"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/knockout.mapping/2.4.1/knockout.mapping.js"></script>

<ul data-bind="foreach: school.students">
  <li><span data-bind="text: firstName"></span><span data-bind="text: lastName"></span></li>
</ul>

http://knockoutjs.com/documentation/plugins-mapping.html