Hello,
We hired a student(phd) from India for the summer. He came to the US in 2000-2002 on F1 visa. Opt from 2002-2003,H1b from 2003-2009, F1 from 2009-present. Does he quality for an F1 exemption for 5 years from 2009 for FICA/Med, as he went back to India and came back as a F1 again in Jan 2012. He told me he files taxes as a resident though.

If he filed as a resident (which WAS the correct way to file based on the information you provided), then he IS liable for FICA (Social Security and Medicare) taxes.