Steps to 'hiding' your lost copies from your students:
Create a new circulation type:
Back Office
Library Policies>Circulation Types
Add Circ Type
Name it "Lost material", Check Hidden, Loan Period is 0 and Save
Go to Access Levels
Click on pen and paper next to Patron, Guest and then Staff, to uncheck See local hidden materials under Library Catalog Search Access
Go to Reports to create list of lost books
Library Reports>Library Title & Copy List
Select By Circulation Type
Include BOOK
Show Titles With "lost" copies
Output as Microsoft Excel
Run Report
Copy and paste barcodes (column G) into Notepad and Save
Go to Catalog
Update Copies>Batch Update
Change Circulation Type to : Lost material
Select the saved barcode file
Update
When seaching you catalog, the lost books won't show up but if they ever come back, just check them in to re-appear in your catalog.