Algorithm for preference based grouping

Question

I am looking to figure out a way to sort people into classes by preference.

For example, say there are 100 students that are each going to be assigned one of five classe

Answer 1

From your description, this sounds very much like one of the variations of the Stable Marriage Problem

Check the Wiki link and you will see a description of the Gale-Shapley Algorithm, which is a good solution.