Yes you can go to any London Underground office, register your Oyster, show them your 16-25 railcard, and they will put a lower cap on it. But I'm pretty sure I remember for some reason they won't let you put a lower cap on a student oyster - you'll have to get a normal one.
From the TFL website:
National Rail Railcard Peak Off-Peak
Journeys in:
Zones 1-2 £6.70 £3.35
Zones 1-3 £8.10 £3.80
Zones 1-4 £9.50 £3.80
Zones 1-5 £12.10 £4.60
Zones 1-6 £14.30 £4.60
Zones 1-9 £15.70 £5.60
Zones 1-8 + Watford Junction £17.50 £8.55
Zone 2 £6.70 £3.30
Zones 2-3 £8.10 £3.30
Zones 2-6 £8.50 £3.30
Zones 2-9 £10.10 £3.35
Zones 2-8 + Watford Junction £12.10 £4.65
So if you travel within zones 1-2 off-peak, using buses or tubes, you can't spend more than £3.35.
Though if you're doing 4 bus journeys 5 days a week, you're better off buying a weekly bus travelcard (since you have a student oyster that gets you 1/3rd off this price). Should be cheaper than the £3.20 daily cap for using only buses.