They are getting an Oyster and a 16-25 railcard anyway.

But should they go for the Student Oyster, rather than loading the
railcard onto a regular Oyster?

As far as I can see the only difference as far as fares are concerned is
that the Student Oyster discounts individual bus trips, but the combo
only discounts the daily cap.

And using the combo means you have to carry both cards when travelling,
rather than just one [inside London].

A short term problem is that the Student Oyster can't be bought in
advance, and apparently takes up to three weeks to approve and issue,
leaving freshers out on a limb at just the time they might be wanting to
explore the City.
--
Roland Perry