With an electric guitar you can play almost every style you want but you need an amp for it. Playing tears in heaven... then turn a few switches and kill some poor rock song :)
With an accoustic or western guitar you are a bit more limited in playing hard rock stuff. But you can take it with you everywhere to play and sing.
From a teachers point of view (and I'm none ;)) I'd go with an electric guitar. So much more you can do with it. Also the students learn what all the nobs on the amps and guitars do. On an accoustic guitar there are no such additional knowledge to spread.