I agree that there are two sides to be heard from to be fair, but a few transient thoughts enter my mind...
As a fixed wing student, I slightly damaged a 172RG. I honoured up, and paid half the cost to restore it (which equated to about 7 hours of rental time on it at the time). No hard feelings, just some ribbing form the club members for a while - I deserved it. Several lessons learned, "don't do that again (in that plane anyway), and promptly admitting you did the wrong thing, and grounding the plane is always better than pretending it was not you!
As a rotorwing student I did a poor engine start, and although I did not damage anything, I caused the need for a costly inspection. I spent the rest of the day assisiting with disassembly of the helicopter, and took the subject part for the required MPI inspection.
An instructor I know undershot a C-150 on a night landing, and took off the nose gear. She was handed tools, and spent the next three weeks of her time helping to repair the plane. She restored her honour, and the plane (and knows a lot about the front end of a 150 now!)
I of course cannot speak to the circumstances of the damage the OP mentioned, or the insurance or loss of use issues, however, perhaps the aircraft owner and student had a greater opportunity to come to an arrangement where the student helped with the repairs, and in doing so defrayed some cost. I accept that there's probably and engine rebuild and new prop in the repair, but I have to expect that the owner has planned for such a financial event with insurance. The learning opportunity for the student in that situation is surprisingly valuable, both from the "don't do that again" perspective, and just to get to know the workings of the plane better.
That having been said, a solo student is never solely responsible for an accident. A student could be solely responsible for deliberate action or carelessness (not an accident), but if the student was applying themselves as best trained, and and a nosewheel collapsed, the instructor bears some responsibility.
That student has learned a lesson. It could be wise for the school to offer to continue the training, and tidy up the loose ends of that lesson, for that student, and the others in the group too. Generally, circulating the wisdom gained form a bad experience will make all involved better pilots. Sending a person away in shame does not have the same positive affect...