Virtual Reality (VR) is increasingly used for collaborative learning in education. To navigate these virtual learning environments, people use avatars. Understanding how people perceive avatars, and treat them humanly, is crucial for designing inclusive virtual learning environments. This study examines the ways in which students attribute and detract mental states to avatars based on their characteristics, through the process of mind perception. To do so, six focus groups were conducted, during which students designed avatars that varied on two dimensions of mind perception: (1) agency or (2) experience. This was followed by group discussions on the characteristics of these avatars associated with agency and experience. Avatars were attributed low experience and agency, when designed as nonhuman entities (e.g., robots or animals), depicted with incomplete bodies, unrealistic appearances, negative appearances, and suggested side character roles. Conversely, avatars attributed with high experience and agency typically showcased human-like figures with unique personal styles, realistic representations, positive appearances, and convey a strong sense of individual identity and storyline centrality. This implies that VR developers, teachers and educationalists should take these characteristics into account to design inclusive collaborative learning environments.