Good for you for being willing to help your friend develop her talents. My mother also had no idea what colors looked well together. She made many, many quilts over the years that were absolutely awful to look at. Her quilting skills were sometimes overlooked just because her choice of fabrics was so terrible.
One good thing is that your friend realizes that she needs a little help in this area. My mom never thought there was anything wrong with any of her quilts and she could not understand why people did not display them prominently in their homes.
Is your friend able to afford new fabric? If so, is she willing to purchase fabric and not just use what she has on hand? My mom was raised during the depression and thought it was wasteful to spend money on new fabric when she had "perfectly good" fabric at home--even though her fabric was woefully dated or just plain ugly.
You've gotten lots of great ideas from other posters, and I hope you're able to help your friend.