One thing to try might be to absolutely make sure that the student is not scared of some PART of the recovery.
What about keeping the ball straight ?
Is the student really scared/uncertain of using the rudder to pick the wing up ?
Is the student uncertain of exactly what to do in the recovery ?
What about stall recovery speed ?
What about how far to drop the nose on recovery ?
What about cleaning up after a stall ?
It sounds a little like the student is anticipating being scared, which probably makes it hard for you to put your finger on what the problem is.
As far as power on stalls go, you could maybe try using lower power settings to provoke the stall, this might help to ease the student into it a bit.