Understand all that Max, but I hardly consider that a softly delivered chat including the line "below that of an average learner" or "progress much slower" is really doing anything other than putting that student in the light. If they cannot accept this news then they have a serious problem but the only 3 people who I've had the misfortune to deliver such news to have thanked me for it and accepted it with great dignity and understanding, often happy to continue, with no misapprehensions. Praise all you lilke but 99% of people know when they are underachieving and all you serve to do by continuing with the jolly instructor act is to make yourself look like a poor deluded madman... or worse - a penny pinching crook! There's daftness and stupidity and that strays the line - be honest and they'll thank you.
VFE.