I am not an instructor, but I am a mom, so I kinda know about setting limits.
The first thing to do is say something positive. I get the feeling that you ARE one of those intstructors who keep to the positive, and maybe that's why you are finding it hard to be frank with them (by the way, you said "them", is it more than one person?).
So, you start out one lesson pointing out the progress that they have made and how hard they worked to get that far. And then mention how with time and work, they can look forward to even more progress, (kind of emphasizing the road ahead). Assure them that they can get there, but only by going "through", cannot go around. Can't learn riding by osmosis, only be doing over and over again, as it's a lot about body memory.
So, when they mention their intention to event soon, you can say something like, "Wow! That is a really grand idea and I know that you will one day be capable of doing that, but to be honest, if you try this now, I will be very worried about your safety. And pushing your horses into that level of competition at this point is not fair to them and might compromise their long term health or success. I think we should keep the goal of eventing but consider all that comes in between where we are now and where you'll be after some more hard training."
Sound supportive and concerned. NEVER mention that she should lose weight,. She knows that, I would bet.
I have seen how the careful use of compliments can bend a person to the direction the are being trained. Sounds cunning, but it's just the old "positive reinforcement over negative". Good luck, and I really respect your concern for the well being of your student. It demonstrates your integrity.