Perhaps someone here with a deeper understanding of the FAR's would mind shedding some light.
Here's what one of the principle FARs say. In 61.195 Flight Instructor Limitations and qualifications (d) A flight instructor may not endorse a:
(1) Student Pilot's certificate or logbook for solo, unless that instructor has-
(ii) Determined that the student is prepared to
conduct the flight safely under known conditions.
And here's what the Advisory Circular, FAA-H-8083-9, the Aviation Instructor's Handbook, says.
You know, Advisory Circulars, they are the general instructions from the FAA about
how to apply the FARs.
The FARs tell us
what must be done, and the Advisory Circulars give us guidance on accetable methods of regulatory compliance.
In Chapter 2 Human Behavior, which addresses the human needs and defense mechanisms, a couple pages talk about
The flight Instructor as a practical psychologist.
Under
Flight instructor actions regarding seriously abnormal students, the instructor is first warned of this/her personal responsibility to refrain from certifying anything, and then encouraged to have another instructor make an evaluation, then if both agree, they should have private discussions with the local FSDO, and the local AME, for further evaluation and also to stop a medical and/or training with another instructor or AME.
So that's the official "requirement", and guidance.
Start with getting another
experienced instructor's evaluation on this, not the innernet.