Usually it's done so that the teacher can tell how long the paper is without counting words. Times New Roman at x pt with 1 inch margins fits a well known average number of words per page. The assignment will usually be "write x number of pages on..."
Using a larger font size or a font that renders larger at the same font size means you can write less content in the same space.
Using a larger font size or a font that renders larger at the same font size means you can write less content in the same space.