Honestly, I would suggest spending some time researching either Scott's (ADK) or Jim Roseberry's (Studiocat) websites. Also perhaps check out Sweetwater to get an idea of what sort of gear is out there and how much it costs.
What she probably is asking for is to have a computer that will smoothly record several instrumental/vocal/drum parts at once without issue - how many exactly she did not make clear. That means she wants more than a two channel interface. I am guessing - and it is a guess - that by "VST plugin" she means things like software reverbs, limiters, and other sound sculpting tools. As for mentioning dropouts, most likely that means wanting to be able to smoothly play back all the recorded tracks at once without glitches, and without having to freeze any of the tracks. Less common, the term also can refer to problems with needing to stream more sound samples at once than the computer can handle.
Another key question, what equipment does she already have? If she wants to have both a good computer and a solid audio interface that can handle multiple tracks well for $500 total, that will be very tough, if not impossible. Buying an older used interface might then be the best option.
Seriously, I would suggest both of you spend time figuring out what it is she actually needs, and what things actually cost. It is very easy to spend lots of money - and I mean way, way more than $500 and end up with something other than what is needed, and in essence wasting lots of money. It is a very good idea to figure out as best as possible what the specific goals are before spending any money at all.
If she has absolutely nothing, no recording equipment, I mean literally nothing, she is going to have to start far more modestly than she may wish, especially if $500 is for everything.
Again, if you are going to accept the project, I would strongly urge you to do some serious research. Both Jim and Scott earn their livings building computers for music content creation. Their budget systems start slightly north of $1,000, and that does NOT include an audio interface. Admittedly, one does pay a premium for their expertise (for me that premium has been well worth it). One can build your own computer for less. As for audio interfaces, a cheap two track USB interface can be had for $100 +/-, but a good interface for tracking multiple parts, with better converters quickly gets in the $500 and up range (MOTU, among others), and high end interfaces from RME can easily get into the +$1,500 range (along with some MOTU and others). Even a "cheap" two track would still be better than the onboard sound chip.
Side point: a couple things about audio interfaces, USB (except for RME) generally has higher latency than either Firewire or dedicated PCI/PCIe cards. Firewire is common among interfaces, but no longer common on computers. Those that have it now use cheap Firewire chips, and those often don't work well - a Texas Instrument Firewire chip is/was the known good thing. Also, the older PCI sound cards do not always perform well under PCIe emulation, as required on the newer MOBO's.
Note that for lower end use - the level she is certainly financially looking at, it is reported that MOBO's for AMD chips still have real PCI slots, and not just emulation (I have no direct experience). An AMD chip may be well worth considering, given budget limits.
That you are not familiar with what she means by recording multiple tracks, dropouts, and the like will make it very difficult to provide her what she needs, and what she wants and what she can afford may well not be the same thing.
Positively, you are at a place where everyone starts, and you are not facing anything that any person on the forum hasn't faced - there is a lot to learn.