Encourage student actors to practice a lot before a performance. Heavily preparing significantly reduces the fear they'll forget a line or get totally lost during a performance.
Urge them to focus on their performance instead of their nerves. Anxiety is natural, but it's more valuable for the actor to focus her energy on memorizing her lines and understanding her role in the production.
Remind student actors that the audience is there to support them. Rarely does someone attend a performance hoping it'll fail. Audience members invest time and money in the show and want to see a quality performance, so they are, in a sense, rooting for the actors.
Encourage the student actors to just keep going if they make a mistake. An actor might fumble a line or miss a cue, but instead of worrying about it, she should just carry on and get back on track. Either the audience won't know she made a mistake or they'll soon forget.
Tell the students to tune out the audience. If an actor is constantly waiting for cheers, gasps, applause and other cues from the audience, his performance suffers and his anxiety grows. Stage fright occurs when someone worries about what others think of him when he's onstage.
Urge the student actors to keep performing despite stage fright. The more stage time the actors get, the more they'll loosen up and feel comfortable under the stage lights. It might take years, but the joy of performing will eventually overtake the fear.