Fair Use of other peoples work is a concept I have been thinking about and discussing with my students. Dianne McKenzie from OZTLNET has sourced a number of resources / videos on the topic. (They are American, however Fair Use is an international understanding)
http://www.utsystem.edu/ogc/intellectualproperty/copypol2.htm
http://www.centerforsocialmedia.org/resources/publications/fair_use_in_online_video
http://mediaeducationlab.com/intro-video-code-best-practices-fair-use-media-literacy-education
The big issue is if the student is transforming the music into a new meaning, or is it just background music to set a mood? If it is background
music to set the mood, then it is not adding any more value to the music, as it was intended to set a mood. But, if it is used in a way which is
different from the intended purpose,(such as parody) then it is Fair Use. If it just to set a mood there are a number of places where you can get free ‘mood’ creative commons music.
See here for a list of sites that host Creative commons music
http://creativecommons.org/legalmusicforvideos
Usually all they ask is for attribution.