I don't have much experience with flags (that's what they're called, I think - not "headlines"), but:

- The original really sucks. The type is lousy and indeed the key has to go, but...
- Try working with a key hole. You can do some great things with that negative shape, either as a "box" or preferably as a counter in one of the letters. Or maybe one of the letters - maybe.
- If your boss really insists on a key and not a hole, maybe you can give part of one letter some serration (you know, like a key "edge"). But remind him that the more obvious a representation the less staying power it has.
- I think the flag should indeed span the horizontal: that gives the user a strong message that it's a newspaper.
- The rounded/sharp boxes you have don't seem to say anything relevant.
- I don't like the "PPT" acronym.
- All-lc might work best.
- I think it should be "student magazine", no possessive.
- The font you're using seems to work, although it's a bit rough in spots.

hhp