Suspending them is downright silly, unless it included a direct threat of violence or was used to frighten individuals directly, or was an ongoing and consistant problem.
Why not just give them an assignment to write an essay about the positive history and cultural aspects of that ethnic group?
Why should they have to do anything? The parents should of went to the school board and slapped 6 inches of law across their face. Oh wait, I'm black make that 8 inches. No, I'm Asian make that 5.