good grief, he's a STUDENT! You can't blame a student for bumming things up, he's there to learn how to do it right and maybe just wasn't really ready. As mentioned above, if he was released by an instructor, then that instructor felt he was competent, thus the instructor must take part of the blame, or the school if there was a previous undetected damage.
In my world, schools must have special "training risk" insurance, not just simple rental insurance. In one club they have a special account that builds up cash to help cover such cases. Flying is expensive enough and I'm sure handling a student's accident the way it was in this case would truely de-motivate any beginner.
Yes, I know, I don't know all the details, but still.....