Even though a password-less user can sound like a good idear, i'd really at least make a simple password and just give it to them all. It's still alot more secure that way. Then, as you asked, you can give permission to a directory for just them by adding a new group or doing a 'recursive' chmod (which will do the dir and everything in it) at like 444 to the dir to make it globally readable etc...
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