The flight instructor of the Schweizer 269C-1 helicopter stated that he and the student pilot were performing maneuvers. The student pilot had just completed a maximum performance departure from a confined area, with a left turnout, leveling out at 600 feet above ground level (AGL). The instructor simulated a forced landing condition. The student pilot then entered a 180-degree autorotation to the left, while maintaining good rpm control and a 60-knot airspeed attitude. Upon reaching between 150 to 200 feet AGL in the descent of the autorotation, the student pilot pulled aft cyclic and raised the collective. The main rotor rpm dropped rapidly to approximately 380 rpm and the forward airspeed decreased. With immediate response of the instructor to the problem, the lack of altitude did not allow him to recover completely, but he did reduce the force of impact. After leveling the aircraft and cushioning the touchdown, the blades came in contact with a tree, forcing the helicopter onto its right side. Once the blades hit the tree, a blade then struck the tail, and the instructor immediately cut the throttle to idle position and instructed the student pilot to pull the fuel shutoff valve, shutting down the engine. The instructor and the student pilot exited the helicopter, and the student pilot received minor injuries.