All of my kids have had it. My 3 year old still gets it occasionally. We used to do the baby oil thing, but baby oil is mineral oil, which is actually not very good for the skin. It does not absorb and cannot moisturize. A natural grapeseed oil, olive oil, apricot kernel oil, something like that would be much better. Every so often, get a good amount of the oil on her scalp (I know, doesn't look pretty) and let it soak for about 20 minutes, then massage her scalp with a soft bristle brush or better yet, a toothbrush! Then wash it out with a gentle shampoo.
Her own sebum (natural scalp oil) is the best thing for this, so don't wash her hair too often. Brushing her hair with a soft bristle brush will also help.