PA44 STUDENT PLT CLBED THROUGH CLRED ALT AND HAD AN NMAC WITH ANOTHER ACFT. A STUCK MIKE CAUSED A COM FAILURE.

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THE ABOVE DESCRIBED INCIDENT TOOK PLACE ON A STAGE CHK TO DETERMINE THE STUDENT'S ABILITY TO HOLD COMMERCIAL STANDARDS IN THE IFR ENVIRONMENT PRIOR TO TAKING AN FAA CHK RIDE. AT THIS TIME; STUDENT HOLDS BOTH AN INST AND MULTI-ENG RATING. DEPARTING SANFORD ENRTE TO ORLANDO EXECUTIVE; ORLANDO APCH GAVE US A TURN TO 180 DEGS AND MAINTAIN 2000 FT. VISIBILITY WAS POOR DUE TO THICK SMOKE; STUDENT WAS UNDER THE HOOD AND I WAS SCANNING OUTSIDE FOR TFC. THE COOLER TEMP AND A VISUAL CHK OF THE GND CAUSED ME TO CHK ALT. THE ALTIMETER WAS SHOWING A CLB THROUGH APPROX 2500 FT. I QUERIED THE STUDENT AS TO WHAT ALT WE WERE CLRED TO. STUDENT REFERRED BACK TO CLRNC ISSUED ON THE GND; 'CLRED TO SFB ARPT 2000 FT; 3000 FT IN 10 MINS.' IT WAS APPARENT THAT THE STUDENT WAS UNABLE TO CORRECTLY UNDERSTAND/INTERP AN IFR CLRNC. I INSTRUCTED THE STUDENT TO VERIFY ASSIGNED ALT WITH APCH CTL. AFTER FIRST ATTEMPT AND NO ANSWER FROM APCH; I SWITCHED TO THE #2 RADIO AND MADE ANOTHER CALL. IN THE MEANTIME A C172 CAME INTO SIGHT AT OUR 11 O'CLOCK POS. I INSTRUCTED STUDENT TO BEGIN DSCNT TO 2000 FT. I BEGAN TO TROUBLESHOOT THE RADIO PROB AND DISCOVERED A STUCK MIKE. C172 PASSED IN FRONT AND 300 FT ABOVE US. STUDENT CONTINUED DSCNT AND COMS WITH APCH WERE RE-ESTABLISHED. MY DECISION TO ALLOW APCH CTL TO CORRECT/REPRIMAND STUDENT FOR ALTDEV WAS INEFFECTIVE DUE TO THE STUCK MIKE. ALSO; DUE TO MY ASSUMPTION THAT THE STUDENT WAS CAPABLE OF FOLLOWING A CLRNC FROM APCH CTL CAUSED ME TO BE FOCUSED OUTSIDE THE ACFT RATHER THAN DIVIDING MY ATTN BTWN COLLISION AVOIDANCE AND INSTS. ANOTHER FACTOR THAT CAUSED MY ATTN TO BE FOCUSED OUTSIDE WAS DUE TO THE VOLUME OF IFR/VFR ACFT IN THE VICINITY AND THE POOR VISIBILITY. AS AN INSTRUCTOR IT IS SOMETIMES DIFFICULT TO KNOW 'HOW FAR' TO LET THE STUDENT GO BEFORE INTERVENING. MY DECISION WAS BASED ON THE BELIEF IT WOULD BE MORE MEMORABLE FOR THE STUDENT TO BE CORRECTED BY THE CTLR. I FELT I HAD THE SIT UNDER CTL AS IT WAS VFR CONDITIONS AND (AS FAR AS I KNEW) IN CONTACT WITH APCH CTL. HOWEVER; SAFETY SHOULD ALWAYS BE THE #1 CONCERN -- WITH LEARNING TO FOLLOW!