For students, age 18-22, pursuing Engineering, How the hourly rates, or freelancing rates are determined?
Rates are not something that depend upon age. They depend upon other factors like knowledge, experience, communication skills, quality of work
For e.g, I am 20, have 2 years of experience in making iOS apps, have about 10-15 apps in my portfolio.
So how can a rate be decided. Are students paid equally as normal freelancers, or we are paid less.
And I am able to give adequate time to iOS development.
It cannot be answered that easily. From my experience (I am 19), I have met several clients (very few) who just don't want to hire because of my age. Apart from this, clients have a fear that students freelancers are generally non-serious, time waster and irresponsible. So, you have to act like a professionals and deliver the work with quality. If you made to this point, you can earn even more an adult freelancer.
If you are beginning, I advice to observe the market, keep your hourly rates slightly lower than other, deliver high quality work in a timely manner, and build a reputation. Once you build a reputation, you can earn a lot.
P.S. Don't keep your hourly rates much lower. It shows you are unconfident about your skills. Keeping rates very lower also harms the market.