Well, you could go on the principle that hot air balloons use, and that is to generate heat in such a fashion that you change the air density inside the balloon. You might want to look at how that's done on the web. If you can use this, then I'd get a few small glow coils (resistive heaters) from Radio Shack or some other electronics store, and you might be able to plug it into the wall and heat it. Unfortunately, that produces risk of fire and also of shock because of an exposed coil.
I would also suggest filing the balloon with helium, but that is a problem because you don't have it in your house.
Next suggestion would be to fill the balloon with hydrogen, but I don't really like that idea much. I think it's a little irresponsible to have your students figure out how to generate hydrogen from household materials, as it will inevitably lead them to the internet, where lord only knows the quality of information available. Besides, that's not how hot air balloons work--it's how the Zeppelin worked, but not a hot air balloon. You've also got the problem of the hydrogen being flammable. I'd be careful if you're putting it into a plastic bag because of static.
3-5lbs. is a LOT of weight to be lifting. How big is this thing?