I started teaching an 8 year old student about 2 months ago. She is very smart, a very hard worker and already knew some music when we started so learning has been quick.
HOWEVER.....I think because her hands are so wide or her fingers so long, that she simply cannot follow the fingering of the pieces. When she places her hand correctly on the piano, the 5 key placement is too small for her hand; she seems to have to really place her fingers close together/not naturally comfortable. I then stop her constantly to have her move her fingers back to where they belong. She knows her notes so it's not like she's even playing the song incorrectly if she uses her own fingering.
Has anyone experienced this and how did you manage to correct it?

I'm really surprised that an 8 year old would have this problem! I had a similar issue with an adult student who was a large man (like a football player) and his fingers were like sausages. But there's really no getting around it if she wants to play piano.

Is she playing pieces that are in 5-finger patterns right now? Perhaps have her practice doing some 5-finger patterns (123454321) just to get used to the feeling of playing 2nds. The hands shifting out of place means she's not playing legato very well, so check that as well.

You mention her fingers are long, and I'm wondering if she is over curving her fingers? Maybe check to make sure she's playing on the ball of the finger (not the tip) without collapsing the first joint as many kids will often do.

Five-finger patterns sound good. Also, it might help, if she more concentrates on her fingertips than on the rest of the hand: make her fingertips try to always be in touch with the keys, so she can feel what she's doing (maybe try this with her eyes closed).