You are insightful, concerned, and kind, these are great qualities for someone who wants to work in the helping field.
She certainly does crave attention doesn't she.
As to possible diagnoses.Histrionic Personality Disorder
Narcissistic Personality Disorder.
Here is a link to some good information on the topic.
If you confront her about her lying she will likely lie some more. You will have a very small chance of getting her to admit her behavior because she relies on it very heavily to get through her world socially. When you get the to the point that you feel you have a good relationship with her you can ask her very indirectly to be more straight with you. You can say something like, "I won't tell the others but I want you to try to tell me the truth so we can have a more honest relationship, I like you just the way you are." Don't' force her to admit her lies but don't pretend like you believe them either.
This kind of behavior is very, very difficult to change it is very addictive, don't be naive and think she is going to tell you the truth, but do expect it of her, as this is a service to her.
This is such a sad thing to see. Isn't it.