Students are often embarrassed to make mistakes in front of their friends. As you get older it doesn't matter as much.

People are naturally reluctant to use a language they are not comfortable in, especially in the prescence of native speakers or their peers. When a foreign learner speaks English, they are usually being judged. With the complicated grammar (and often very different from their own) that English has, it's difficult to say things without making a few mistakes. Many students don't like to make mistakes. In western philosophy we're praised for learning from mistakes but in eastern philosophy it's often the opposite. Perfection is the goal, and no one can ever perfect a language. Many students who are brilliant in subjects such as math or science which have written laws that are easily understandable can struggle with English. Likewise, sometimes the students who don't study but are very sociable during class can be quite good at English because they are willing to speak. As someone who teaches the very introductive levels of English to students who, for the most part have had no teaching of it before, the first thing I teach the students is that they can speak English - before their ever taught a single word of it, they need to know that they can do it. Once they're confident and ready, we begin.

Public speaking is one of the core course in the US colleges. The first thing we learned in this course is stage fright. Those students whom you are referring to have not took the public speaking course yet.