The text overlays make no sense and are distracting - unless they're maybe supposed to serve some higher artistic purpose? Like, I dunno...maybe the protagonist got sucked into an old-timey silent horror movie?
That would actually be kinda cool...
As for the graphics, some of the textures look pretty good, others are atrocious. I kinda like the overall style - simplistic black and white, not much detail but a lot of contrast... could work I guess. Like the whole "noir" idea.
Overall idea doesn't seem very original yet. Asylums are scary but also a bit overdone. Will have to see what the actual story is going to be.
All in all, for a student project it's okay. Their facebook site tells me that they've only been working on it since January 21, so cut 'em some slack, folks.... UDK is a quite complicated tool to get into and you can't expect miracles in only three weeks.
My advice would be to not try and make fancy trailers until later in development, however.