I would personally pay off the student loans, and eliminate that payment instantly. I'd put the remainder towards the principal, then take the payment I'm not making towards the student loans, and put it towards the principal as well, until you can eliminate PMI.
Another consideration, no matter which way you go, is you may not be able to eliminate the PMI right now. You recently purchased the house. Many loans with PMI have a minimum duration the PMI will be on the loan (like 5 years) no matter how much principle you pay down or how much the home appreciates.