First you need to check that the application has not been approved by clicking on the student's name in the Applications section. If it has been approved, select 'unapprove application' from the drop-down list and click 'go'. The option to return the application will then be displayed in the list.
You have the option to add a note to their application to explain why you're returning the application. This note will be displayed on their welcome screen when they next log in to Apply.
Once they have corrected the mistake(s), they must then send the application back to you.