Divide your efforts.
There's really two problems to solve here. The first is that there's a first-year that you have to gently teach how to develop aircraft. The second is a safety critical concern.
These are almost independent concerns because the risks are so excruciatingly different. I don't know your university, but I expect that there is someone in faculty who is responsible for the safety of this effort. Universities tend to frown on accidentally killing students in airplane accidents, so there's typically someone in charge who has more experience than a first-year student. Find them, and talk with them. Explain that you have some concerns about the safety of the aircraft, and find out what procedures that have in place to ensure the aircraft is safe. There may be a particular point in the process where the aircraft is reviewed and your safety concerns can be addressed.
This responsible faculty member may ask more about your analysis right then and there, or they may want you to hold off until later. Remember that university is about the learning experience. There may be testing phases built into the overarching approach which will catch this error and give them a chance to learn from it. We learn far better from making mistakes than from someone telling us about them.
Once you are confident that there is a process in place to address your safety concerns, the stakes are much lower. Now you can address the first-year designer without having to address the responsibility of a human life. Why do they feel "well, at least we built something" is a valid defense? Find out. It might actually be a very valid defense. There may be schedule pressures which encourage the development of something to validate the effort, even if it fails to fly. Or maybe this designer really was stretched to their limit doing the re-design, and succeeding at flying was indeed their goal. Maybe they can be stretched more.
It's also worth interacting with the upper-classmen. Your wording suggests you feel they should have caught these issues. They didn't. Why? Its worth understanding why they didn't feel the analysis was important enough to double check.
On a related note, ask yourself why you care. Once the safety issues are out of the way, why does it matter to you that the aircraft is unstable. Is it because your name was on the design? Is it professional pride in making working aircraft? Is it empathy for a first-year student who is trying their hardest? Ask yourself why. Barring the safety issues, you may have to consider that you can't make the changes. You left. He/she finished the design work. You may have to wash your hands of it. Understanding why you care will help you decide whether you should wash your hands of it, smoothly and gently try to shape things better, or stand up and fight.
And again, I divide out the safety critical part, because that is absolutely a stand up and fight issue. But its a discussion with a different person with a different role. Look at the situation once you've taken the safety critical part out, and you may find that you can be more gentle.
And, as someone who got to work in industry during my schooling, remember that working in industry changes you. You become aware of many things that one is oblivious to after mere academic teachings. When discussing issues with others, be aware that they may simply not see an issue where you do.
