After creating the user, create the subdomain and place it in the user directory. If the subdomain already exists, just goto Domains > Web and "Edit" the subdomain:
For the domain web service, you want the "Web Directory" to be a directory in the users space, so make sure to select the user in the drop-down selection boxes. This will make it so the subdomain is being served from that particular directory in that users designated disk space, away from any other domains.
Its called retrieving the users password and logging into FTP as the user in question. Really. There is not a simple way to do what you want without having to share login details.
This issue has been discussed before, such as Managing multiple domains and user access
Perl / MySQL / HTML+CSS