If in your shoes, I would pay them to coach me on management skills specific to your state and market.

One thing I have seen over the years is the landlord or PM tells the tenant the property has to be paid for and the banks do not care about their situation.You go from a greedy landlord that is rich to being in the tenants shoes just trying to make a payment to get by and pay " the man ".Not the exact words but you are trying to portray that you have no control over the process and what happens next is automatic if they do not pay.

In your shoes, I'd probably offer to defer the rent increase for one month to offset his cost of paint and let him do it himself.

But, as far as your rights go, you step into the shoes of the owner of the contract you bought. 

College kids come in all sorts of types from the top ramen eating shoe string budget to the kids of wealthy parents who send their kids to college with a credit card that they pay.

You could have to pay her court fees to sue you if the judge rules against you.But, in your shoes, I'd do as you plan to, since you are there in WA, and it wouldn't be too burdensome to go to court if she files.

If the shoe were on the other foot and they were making the decision to terminate their lease they would not give you a second thought.

What would you do if you were in their shoes.

Sounds like you're getting things worked out.I would bet that everyone here giving you advice has been in your shoes.  

Put yourself in her shoes.