Perhaps the question should not be "what would you do?" rather "what should you be teaching your student to do?", as this seems to be a training environment we're discussing here.
As posted before - 10 feet of water will still drown you and wreck the aircraft. How many low time students can be relied upon to succesfuly identify an engine failure then enter autorotation, initiate a 180 deg turn, maintain airspeed whilst turning downwind then flare and cushion with a ten kt tailwind?
If it's an over water circuit then they should be wearing Life-jackets and the student should be briefed thoroughly on water escape, door jettison etc. That done i would have thought that yelling for help (use the radio if it helps!), holding your course into wind and carrying out a normal into wind flare is going to be the most survivable thing to teach a low time student.
If it's a licenced airfield that close to water then chances are it has a rescue boat. If you get out ok (more likley after an into wind ditching i think) and if you are still floating (Lifejackets!!!) then you should be picked up pretty promptly whether you are ten yards off the beach or half a mile out.
If there is no rescue facility then you have to be asking should i be training students here?
Safe flying (and dry landings!)