The appropriate response to score the student's work would be: "The student is correct because as water molecules in steam slow down to form water droplets, they release energy to the surroundings as heat, so it is exothermic."
This correctly describes the process of condensation, where steam (gas) turns into liquid water. During this phase change, the molecules lose kinetic energy and release energy to the surroundings, making the process exothermic. The other responses incorrectly explain the process or describe it as endothermic, which is not accurate. Therefore, the student should receive full credit for their correct understanding of the energy changes involved in condensation.