The above is an amazing system for the price. However, it is open box which is a huge risk, especially for a full tower. That and it will likely be out of stock soon. Ibuypower does offer some decent performance for the price and is actually quite hard to beat when building yourself, especially when you factor in the $100+ OS.
Assuming you can help them build it yourself, you will be looking at something around:
AMD Phenom II x4 965 $100
ASUS M5A97 AM3+ $90
8gb ddr3 1600 $40
1tb 7200rpm $80
500W Power Supply $50
NZXT Gamma $40
That leaves about $300 for the OS and GPU. Now if your friends can get the OS cheap through school, that would be helpful. If not, that'll take off $100. In that case, you will be looking at the 7850 GPU. If they can extend their budgets some, they could go with the 7870 or maybe the gtx 660 if it is out assuming they don't buy too soon. Putting a bit more into the GPU and thus extending the budget some would be a huge improvement in extending the life of the computer since this is the main component in gaming.
Another question is if they live near a Microcenter where you can get a great deal on an intel 3570k+motherboard for like $250 which would be a huge improvement over the recommended cpu. This will also help longevity.
Do your friends need the monitor, keyboard, and mouse as well? That will run you another $200 which will definitely cut down the budget. If that is the case, $700 total leaves $400 for the actual components after the monitor/keyboard/mouse/OS. That is then just not doable, especially for power hungry games like ARMA and BF3.