Step 1: Click on School Settings tab, or click Manage Labels at the bottom of the filter menu.
Step 2: Add the word/phrase of the custom label you want. Then click add.
Step 3: To apply this filter to a student, go to the Students tab.
Step 4: Find the student in the list and click on Actions>Edit
Step 5: Scroll down and check tick the boxes next to the relevant labels, then click Update student.