Pianist Lady, I would start with looking at the shoulders. Often there is tension there that trickles down to the arms and hands.
Lightly resting your hands on a student's shoulders and telling the student to relax (drop) the shoulders can help. Eventually, wordlessly touching their shoulders when they are tense will be enough of a reminder.
I also demonstrate tense versus relaxed shoulders by having the student look at the distance from my ears to my shoulders. I really exaggerate the raised shoulders (so that they touch my ears), then lower them, like an elevator that is going down to the lowest floor.
Another thing I've done with kids who play forcefully with distorted hand positions is to get them to stand up and have them hang their arms loosely at their sides. (Relaxed shoulders coming into play again.) We then look at the natural slight curve of the hand when arms are dangling relaxed at their sides. I try to get the student to replicate that hand shape and level of relaxation when they sit back down and place their hands on the keys. You might have to do the stand/sit, rinse/repeat sequence a few times in succession.
Play around with bench height, too, and talk about what will help them sit at a good height at home.