Since she does not qualify as your dependent, you can not claim her on your taxes. Period. The student however, can file their own tax return and claim that which they are entitled to claim on their own tax return, regardless of who paid the expense. That includes the medical expenses. For the medical expenses to have any impact, two criteria must be met.
1. The medical expenses must exceed 7.5% of their AGI.
2. The total of all itemized deductions which includes medical expenses, must exceed the standard deduction.
Then, and only then, will the itemized deductions that "exceed" the standard deduction have any impact on reducing the tax liability.
Note that deductions can only reduce the tax liability to zero. Once that's done, additional deductions make no difference.
