Final answer:
The students are observing refraction, which is the bending of light as it passes from water to air.
Step-by-step explanation:
The students are observing the property of light known as refraction. Refraction occurs when light changes direction as it passes from one medium to another with a different optical density, in this case, from water to air. This bending of the light rays causes the image of the tongs to appear broken when they enter the water, and is also the reason why a fish in an aquarium can appear to be located at two different places.