I had a couple of guys that we actually had to tell them "you need to bath regularly" if you want to fly here and its the custom while in the US. It took us a few days to figure out how to handle the situation. Be direct but nice about it.
Being direct but polite is the best way to deal with this problem in any situation. You might want to practice what you're going to say so you don't sound embarrassed about saying it, and it sounds more matter of fact. That way it comes across as less of a personal 'I think you stink' issue.
Explain as part of your debrief that it is customary to do the following while in the USA:
1) Bathe daily
2) Use deodorant
3) Avoid excessive use of cologne
4) Brush teeth after meals and use mouthwash
I always explained that these habits were hallmarks of the professional pilot that they were striving to be. Also, that the girls in the USA really liked these attributes! Usually they would just shrug and say okay.
You could take your student home and shower with him. (JK)
I asked this very question when I gave CFI checkrides.
Your student may not be aware that they smell like Aunt Edna's cat boxes so you do not want to come right out and say "You Stink" (unless it's not your student and you don't care).
Ask what they do to before they arrive at the airport. Suggest that they wake up 30 minutes earlier, shower, get a good breakfast and brush their teeth before coming to fly.
Say that if they show up for a flight and thier body is not ready to fly, they may be wasting their time and money.
Open all air vents.
Maybe try flying later in the day.
You could also try gum or hang one of those car freshener things from the students ear.
I also like the idea of getting very stinky yourself so that your that your natural perfume drowns out the students! This may have a bad effect on your social life. Wait, do instructors have good social lifes???
If they don't take the subtle hints, then maybe sit down with them and address the problem in a more imformative way rather than saying, go home stinky!
In a bigger plane, don your O2 Mask and establish crew communication!