Tower Local Controller reported a C172 lined up on the runway without a clearance with a C750 on short final. The C750 was issued go around instructions.

Narrative

Aircraft X; a student solo; called ready for departure and was instructed to hold short of runway XX. Aircraft X read back the hold short instruction. When Aircraft X had called ready there was a K35R on final; followed by a C750. After Aircraft X read back her hold short instruction the K35R landed on runway XX and was instructed to exit at the end of the runway and contact ground control. No other transmissions were made to any aircraft or the tower; and with Aircraft Y on a mile final I did a runway scan to confirm the runway was clear. I observed what I thought was Aircraft X in a line up and wait position on runway XX. I keyed up and asked Aircraft X if they were on the runway as I picked up the binoculars to confirm my suspicion. Before Aircraft X could answer; I had confirmed they were on the runway and immediately sent Aircraft Y around. Aircraft Y advised they were going around and overflew the Cessna on the runway by approximately 200 feet. Aircraft X was then told to taxi down the runway and exit at [Taxiway] 1 where ground control issued the brasher warning; and Aircraft Y stayed in the pattern and returned to land without further incident. Closest proximity was approximately 200 feet vertical and 0 horizontal.The flight schools seem to be rushing students through training programs on a national level and it seems that we are having issues with solo students more frequently; so there should be an emphasis by the FAA nationally to reexamine what is needed to qualify for a solo flight.Locally we should be meeting with our flight schools in person at least every quarter to discuss with current and new instructors the issues we are seeing; and to discuss with new instructors our expectations seeing as how we are getting new instructors all the time.