I just set up a new classroom using one an organization I control. In that organization I have a private template repo I want to use as starter code. Every time I try to create a new assignment using that repo it fails after the second step (where you choose the starter repo) when I click “Continue”. The repo pops up in the autocomplete box for choosing a repo - but always fails with a 500 error when I click that Continue.
I tried making the starter repo public and I could create an Assignment with it. But as soon as it is private I get the 500 error. I looked back on a few of my old organizations from past semesters and GitHub Classroom always had requested permissions (I see it in 3rd party access applications from last semester).
I’m having the same issue as well. I have a private assignment template in same organization as my class. When I try to use this private template, it is not being found. If I change the template to public, then I can find the template and use it for the assignment.
I am so sorry you experienced this bug. It was a recent bug that was introduced into Classroom that affected any new organizations created. A fix was just released for this so you can continue using private template repos.