I'm actually a theater major (Tech & Design concentration) so I'm going to bring in my two cents.
If she's looking at a big name school, she'll need a portfolio, lots of experience, and stellar recommendations. But, a big name isn't everything. Going to a less competitive school has its advantages. Typically at college/university with large/competitive theater departments it is hard to be involved with productions (on a higher level) in your first years (especially in the tech/design aspects). At smaller universities with small but respectable theater departments it can be easier to be involved with productions your first year and work up to design credits in later years.
Also, universities in larger cities would be beneficial to your sister; being involved in production work outside the academic setting is also very important when looking for a job after graduation. Being in Cleveland around a decent theater community has really helped me see the 'real life' side of theater as a profession. The academic setting isn't always would things work in the real world. The larger a city the more theaters/companies, generally. Theater is all about who you know and who can recommend you, so working at a variety of theaters and with a variety of directors is a big advantage.
Since she's still early in her college search, she may want to try and find an intership in her concentration area/s next summer.
http://backstagejobs.com has listings for internship opportunities all over the country. You should encourage her to apply, or simply research the opportunities available to her.
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