This is the most important thing you can do, or I guess not do.

On with what's actually wrong with your student. How many hours/week are you flying? Could it just be a general over-load of information on top of daily life issues? You're idea of another instructor flying with them is great!!! I recommend it to all CFI's to split time with anothers' students, especially when some kind of problem occurs, or it's coming up on check-ride time. Everyone learns differently and it's just about finding that certain way to bring it across to them.

You are doing a great thing, and as a fellow CFI-I I'm glad you brought up questions about a problem student. I had the same problem, except my guy was an older, recreational pilot. I doubt he'll ever be 100% proficient. Been there, done that, unfortunately I never saw the end of his training(not sure if he did finish or not even) since I moved on in the career.

Good Luck!!!!