I would recommend losing the bar and having her squat to a box. I would bet that knee pain is not the limiting factor here, but strength is. It is likely that she will have trouble standing up from a below parallel box, so find the height to which she can squat for three sets of five. Lower the box until she is below parallel. Then start adding weight. Take the box away once she can consistently go below parallel. She will want to sit down on the box instead of keeping her weight in her feet. She will need to be cued to fight this tendency. Also, ditch the belt for the time being.