I have the free for teachers version and add students and parents as observers all the time.  

Simply go to People, in the right-hand corner is a blue button with People+.

Click on that blue button and a new screen will come up.  Put in the student's email and click add.  From there simply follow the prompts.

The student should receive an email with the enroll link.  Once they click the link and it brings them to Canvas, they will need to click the green accept button at the top of the page.

Both you and the student should be good to go then.