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Well, if you can prove to the Bank that she was unfairly cajoled into taking out insurance that was not suitable then you may have a case.
Agreed.
Plenty of others did exactly that, I'm afraid. I'd concentrate on the student aspect in any complaint you intend to make. Do be sure your wife was working less than 16 hours a week at the time though-the Bank will obviously want proof of this.
Noted... As I said, she was working in banks at one point prior to starting University so she saw some of the sales practice going on so it's a no brainer that she was more wary than the average Joe or Janet.
... and yes will focus on the student aspect and get the tax records together as she was supported by family throughout.
Do realise that I am not the Bank and only commenting on the weaknesses in your complaint as you've described it. Banks do reject complaints based on the customer not knowing about the PPI. You need to concentrate on the student aspect (and not be distracted by irrelevancies) if you hope to have success.