The flight instructor reported that he had observed the student pilot use a dipstick to determine the fuel quantity. They then departed for a training flight with the belief that they had 10 gallons of fuel. They performed flight maneuvers for about 20 minutes then returned to the airport for pattern work. On the third takeoff, about 300 ft above ground level (agl), the engine experienced a total loss of power. The flight instructor initiated a forced landing to a road where the airplane struck a curb, which resulted in substantial damage to the right wing. After a debrief with the student, it was discovered by the flight instructor that the student may have inserted the fuel dipstick into the tank at an angle instead of vertically and got a higher level indication of fuel quantity. A postaccident examination of the wing tanks by the recovery agency, revealed less than a half-gallon of fuel remaining in the tanks. The pilot reported there were no preaccident mechanical malfunctions or failures with the airplane that would have precluded normal operation.