Unable to return observalble value from subscribtion

I have been trying to return "students" from my function as an observable, in my code, I am using functions from another service, and these functions return an observable to which I am subscribing. From "classRoom" I am separating students and passing them to another function that returns an array which is then stored in "students".

In the console.log "Log-1" I get the desired output but if I try to return that as an observable or console.log it in "Log-2" it is undefined.

public GetActiveStudents(): Observable<IStudent[]> {
    this.dashboardService.getData().subscribe((res) => {
      this.dashboardService.getDashboardSchools().subscribe((schools) => {
        this.schools = schools;
        this.start = new Date();
        this.end = new Date();
        this.start.setMonth(this.start.getMonth() - 1);

        schools.forEach((schools) => {
          this.classRooms = this.classRooms.concat(schools.classRooms);
        });

        this.classRooms.forEach((classRoom) => {
          this.students = this.dashboardService.numActiveTwo(this.students.concat(classRoom.students), 'students', this.start, this.end);
        });
        console.log("Log-1" + this.students);
      });
    });
    console.log("Log-2" + this.students);
    
    return of(this.students)
  }

Mixing Observables with setting class variables is always a recipe for chaos.
But lets try to get it do what you want :P.

GetActiveStudents(): Observable<IStudent[]> {
  return this.dashboardService.getData().pipe(
    mergeMap((res) => {
      return this.dashboardService.getDashboardSchools().pipe(mergeMap((schools) => {
        this.schools = schools;
        this.start = new Date();
        this.end = new Date();
        this.start.setMonth(this.start.getMonth() - 1);

        schools.forEach((schools) => {
          this.classRooms = this.classRooms.concat(schools.classRooms);
        });

        this.classRooms.forEach((classRoom) => {
          this.students = this.dashboardService.numActiveTwo(this.students.concat(classRoom.students), 'students', this.start, this.end);
        });
        return of(this.students);
      }));
    })
  );
}

What did we do? In general, we used mergeMap to get to the next Observable and return it upwards, the returned observable does nothing till it gets subscribed somewhere in the code.

I encourage you to overthink the structure of your code, it won't be maintainable in the future. Try it, maybe in a more declarative way and try to not overwrite class properties to reduce side effects.
(for example, is it really necessary to do this.start = new Date() ? )

Your Log-2 is outside of the subscription, and therefor gets hit before the getDashboardSchools() emits returns a value. You are also setting the component variable (this.students) in the function, while returning the same value as an observable response.

I would suggest you declare and populate a variable in the function, and return it as an observable:

public GetActiveStudents(): Observable<IStudent[]> {
    this.dashboardService.getData().subscribe((res) => {
      this.dashboardService.getDashboardSchools().subscribe((schools) => {
        this.schools = schools;
        this.start = new Date();
        this.end = new Date();
        this.start.setMonth(this.start.getMonth() - 1);
        let students: IStudents[] = [];
        schools.forEach((schools) => {
          this.classRooms = this.classRooms.concat(schools.classRooms);
        });

        this.classRooms.forEach((classRoom) => {
          students = this.dashboardService.numActiveTwo(this.students.concat(classRoom.students), 'students', this.start, this.end);
        });

      });
    });
    
    return of(students);
  }

Then, subscribe your function in the ngOnInit (or where ever you need it), and set the component variable (this.students) with the value emitted by your observable function:

ngOnInit()
{
	this.GetActiveStudents().subscribe(res => {
		this.students = res;
	});
}

First of all Subscribe work as asynchronous. The console.log "Log-1" you are getting the desired output because this is written inside subscribe and the function must return value from subscribe so Log-1 contains desired output but console.log "Log-2" is written outside of subscribe, this code does not wait to complete subscribe method and execute suddenly just after subscribe so value of Log-2 is undefined.