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Following this line of thought. If you can sort out the mould so it's not life threatening, it's a student house, they'll be there a year or two at most. Make good documentation of the state of it right now and how it hasn't been cleaned or tidied in any way, then you can use that to make sure you get all your deposit back at the end of tenancy. Bleach all the surfaces for Corona, put fresh mattresses in and you'll be fine. It also means they don't have to be precious about it, have parties or whatever and if something breaks it doesn't matter.
Sumo
You are going to hate this but unless the place is completely fucked you are just going to have to suck it up and make the best of it. Slap some paint on, fix the worst of it, trash the place before they leave - that way it will be the same condition as it was when they moved in.
If it's completely fucked then move out.