This problem involves distributing identical objects (pencils) among distinct groups (students) while ensuring that each student receives at least one pencil.
To apply the stars and bars method, we first allocate one pencil to each student. This reduces the total pencils to be distributed from 10 to 6.
Now, we must distribute these 6 remaining pencils among 4 students without any restrictions. The number of ways to do this is given by the stars and bars formula:
\[
\binom{6 + 4 - 1}{4 - 1} = \binom{9}{3} = 84
\]