"This" refers to the 65 students who walk. "Is" can be written with an equal sign. 12.5% means 12.5/100 which is 0.125. "Of" in word problems means multiplication. We're trying to find the total number of students so we'll call this x.
Equation:
65=0.125x
Divide both sides by 0.125.
520=x
There are 520 students.