Karyn
Moshkiae
Hi,
Show her the posts on this thread first!
I want to encourage her, not put her off playing for life!!! 
I don't think there is anything in here that is offensive. Specially for a youngster, who might ask ... what's that?
There is such a thing, as we all know very much and then some, that sometimes a better instrument, or at least better built instrument, is likely to provide more of a chance to stay with it, than otherwise.
As a psychic friend, used to say, that the more you pay the more you respect it!
I'm thinking in my head that she's not happy with the sound coming out of the instruments she has, and that could be a playing issue, or simply bad stuff. I, however, do not think that a Squire, or another inexpensive piece is a good answer, but that is the way I think.
Maybe graduating to a REAL, and PROFESSIONAL instrument is not in her capacity as yet. Hopefully she can get past the marks well enough, so her ability merits a very good instrument, not just an excuse for an instrument. I seriously regret having swapped the original EB-0 Bass I had (Cherry Red too!) for a Fender Jazz, and 20 years later, getting rid of the Fender Jazz. And me kinda trying to find the feel and sound of that Gibby with the EB-3 Epiphone is not even close and even more frustrating. That's what happens when you don't know, the difference between a good instrument and a crappy one, and like a kid, think that any instrument can make you a good player, and that's simply not true, and in fact, rare.
I would have a good, detailed talk with her, and find out the issues. Maybe a little more homework is needed before you can make your call.
Sorry, I'm not helping.