I love this kid!  She sounds very creative.  I also loved the 80's punk -- maybe she should review some old Go-Gos video's because they were really the top of the look, along with early "Borderline" Madonna.  But remind her that a lot of people took the preppy look to the extremes, too, and even mixed it with punk!  The top color combinations of '86 were pink and green, pink and tourquoise, pink and purple!  Tons of people wore polo shirts with collars turned up, docksiders, and sweaters wrapped round their shoulders, but put them with several of those those thin rubber vacuum-cleaner rings worn as bracelets and short pleated school-girl skirts or super-skinny jeans that their moms took in on the sewing machine.  Oh, yeah, and let's not forget Pat Benatar -- she wore ripped up hose with short skirts, anything vintage (especially hats and glasses), and anything military salvage.  She could still get all that stuff today cheap in vintage stores. 

Before doing any cutting, here's three older movies I suggest you borrow from your library to watch together with your daughter for ideas:

1.  Desperately Seeking Susan

2.  Pretty in Pink

3.  Some Kind of Wonderful

I was mega into punk (complete with bustier-over-clothing and pink spiked hair) and, though I cringe at the photos now, also remember how much fun it was to make my own clothing (yes, I was a recycler even in high school).  Here are some fun ideas:

1.  Find a lacy puffy skirt, cut it so it sits around 3-4" above the knee, and layer it under a denim skirt (those multi-layered "western" style skirts work well, but a very-short mini will work as well).  A middle-east-dance type waist gypsy-sash will do in place of (or in addition to) the skirt.

2.  You probably don't want your daughter to wear fishnet stockings, but thick cotton tights and/or leggings in a variety of colors (preferably to match another item in the outfit) -underneath- the fishnets is period-appropriate.  If you can't find colorful "slouch" socks, hunt the thriftstore for thick mens hiking or "ragg" socks (and let them soak in vinegar overnight before washing :-) 

3.  Hunt thrift stores for a wide belt, preferably 3" or wider, in a variety of colors and a loose-fitting white cotton blouse (or man's white shirt).  The collar must be starched and worn so it "stands up."  Also a loose-fitting mans plaid wool suit blazer in a funky color with the sleeves rolled up to just below the elbows (a.k.a. "the boyfriend jacket").  A narrow mans tie is an appropriate fun accessory for certain outfits, or you can wear the tie as a headband (with frizzy hair) with the ends trailing from behind one ear.

4.  Don't just rip the jeans ... to be period authentic you have to sew little lace or colorful patches underneath the holes.  No bootcut jeans ... run the inseam of an existing pair that has as close to a "natural" waistline as you can find so that they fit so slim, you almost have to wiggle you foot through the pants leg.

5.  Recycle an old sweater into appropriate legwarmers ... just cut to fit around her leg and run along your overlock serger so it doesn't ravel.

6.  We always wore either pump-style heels, or above-the-ankle womens work boots (the narrower kind like female soldiers wear with their dress uniforms, not the huge clunky kind construction workers wear). 

7.  Find an old bustier (lacy, leather, or plain) and layer it over a flouncy "pirate" shirt.  For dressier outfits (i.e., a dance) look for outfits reminescent of Spanish flamenco dancers with narrow princess-seamed drop waists leading to flouncy, feminine skirts (preferably with lacy under-skirts).

8.  Perms, frizzed hair, and lots of hair spray!  Have fun with the look ... I certainly did the first time around!!!