Hi digital,
If you are going to link the blog to your informational sites about schools, I would keep the content related to schools and host the blog on your school domain.
I'm not sure I like the idea of adding non-school related topics to your blog. What about the students who subscribe to your blog and want info about the school. If you start blogging about non-related subjects they may unsubscribe and become uninterested.
Why not create a totally separate site for your blog on additional topics and keep your school blog related to school topics and host it on your school domain.
And yes, if the blog resides on another domain then you will need another hosting account for self-hosted blogs. Now, if you host your blog on a free blogger service like blogger or WordPress' domain then you don't need a host. You can just buy a domain and setup a redirect. But after all I've been through I think it's best to just host your blog on your own domain and use something like WordPress.
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