If he's been able to get into this habit, then perhaps you haven't emphasised lookout from as early as you should (ie the first thing you should have said on the first brief should have been - look out!).
This may make him simply unsafe to continue learning to fly - I certainly wouldn't care to be the one sending such a student solo.
BTW, does he use PC-based simulators a lot (even if he refuses to admit to it?)?