Companies will hire depending on who they are looking for. There is some stigma about the trade schools sometimes, and a CS degree will get you to other jobs aswell. While it is a flame-war-able debate, I'd argue on the side of a CS degree over the tradeschools. Trade schools are good, as I work with several people who came from those degrees. But there is a divide on knowelege. Trade school degrees like FullSail give a good overview of the game aspects of programming and design, but they lack some of the more fundemental courses of Computer Science and Mathmatics (like compilers, languages and automata, operating systems, parallel programming, etc.) The CS degrees on the other hand lack a lot of the hands on programming courses focused on game specific technology like Graphics, AI, and Design. Really, the best bet would be trying to get the best of both worlds.
Also, let them know that the pay is lower for the hours worked when compared to other computer programming positions out there in the world. They have to be motivated to make games or they are going to burn out fast. And, yes, the ones who actually want to make games should already be making them. If you start making games/programming when you get into the industry you are 10-15 years behind the people of the same age who were actually motivated to work in their free time.
Point them at good side resources. What are they interested in? Send them to Wii/PSP/PS2/PS3 homebrew sites to learn to hack away on real hardware. Send them to modding communities to make HalfLife 2 mods, or Quake maps, or Starcraft 2 maps. Send them to places like http://www.gamedev.net/ http://aigamedev.com/ http://www.gamasutra.com/ or other high profile programming forums.
Encourage them to do ACM programming contests or topcoder.com programming contests. Get them to learn to solve problems, debug programs, and use source control. Get them to explore stuff other than programming; having a good understanding of art, music, or some other set of game related tallents helps out the team flow.
Even after doing a tonne of programming on the side since forever ago, I still don't feel like I learned enough before becoming a dev. And after two shipped titles, I can say you still have to learn on the way. Technology changes too quickly to ever stop learning. Getting to the goal of being a game developer isn't the end of the road.