Pretty sure it is vastly uncommon for schools to retain publishing rights to your papers.
My university has publishing rights (which they purchased) to a single paper of mine to publish in a journal.
My university has publishing rights (which they purchased) to a single paper of mine to publish in a journal.
For that matter, it's not entirely clear to me what the copyright issues are around work you do for your university. I mean you're already handing it over to the Professor with the exception that he'll do some things with it. Can he hand it out to future classes as an example of the kind of thing he's looking for? (This seems common.) Can he bundle it with other papers and use it as a textbook in future classes? (This seems uncommon.) I do think it is common for schools to at least co-own the publishing rights to a Doctoral thesis. (And in fairness, if your advisers are doing a good job, they may have a legitimate claim to that.)
It certainly seems like in the sciences graduate students are frequently complaining about professors taking undue credit for the student's research. Is a paper different than that? How much of your work for a university falls under some sort limited "work-for-hire" style agreement?
By the same token my honors college undergrad thesis also granted publishing rights to my University (which is comical given the quality).