In John Knowles's "A Separate Peace," Finny is not just a student at Devon, he is a force, a flight of fancy. Finny represents the delightful impetuosity of youth, the imagination that denies reality, the belief in the ideal, the blythe spirit. As James Ellis remarks,
Because of his ability to admit only as much of the ugliness of life that he could assimilate, Phineas is unique. (enotes)
Because Finny is the embodiment of that which has not been corrupted by "the evil that men do" in wars and the secular world, the teachers have found him refreshing, the students inspiring. Finny has done things just to have done them; there is no ulterior motive. When he breaks the school record in swimming with no preparation, for instance, Finny just does this because he can.
As a type of allegorical hero, Finny gives the students and faculty something to believe in that is not mundane. But, with his accident, Finny seems to lose his spirit as his heart is broken by Gene's treachery while, at the same time, he becomes dependent upon Gene--almost, an extension of Gene. With his loss of innocence the students and faculty,too, suffer their losses.
Gene feels incredibly guilty for what he has done to Finny; he knows, deep down, that he is responsible, and feels awful about it. It snaps him out of his bitter, jealous feelings that he had been feeling for Finny for quite some time. Before the fall, Gene had been jealous, bitter, envious and sure that Finny was an enemy. Finny's fall snapped him out of that attitude, and helped him to realize that Finny was not someone who was out to get Gene, but really, a true friend. So, the fall in effect snapped Gene out of his rather petulant state, and forced him to grow up a bit. He will spend the rest of the book trying to make amends for the horrible wrong that he feels he has done Finny.
The other students are depressed and deflated about Finny's injury, and discuss it endlessly in gossip. The teachers have an interesting reaction. Gene notes:
"The effect of his injury on the masters seemed deeper than after other disasters I rememberd there. It was as though they felt it was especially unfair that it should strike one of the sixteen-year-olds, one of the few young men who could be free and happy in the summer of 1942."
The war was a major factor in many of the minds of the adults, and so a boy being impacted by something not involved with the war seemed tragic and unfair to them, when so many were suffering already. Overall, Finny's accident did not just impact him, but everyone around him, because he was such an example of life and activity. I hope that those thoughts helped; good luck!