I think your advice was fine.
However, he IS more likely to get the $$$ from his parents telling them he is going to school.
Saying "I need 10K$ ++++ for school." will go down well.
Stating "Gimme 10K$ +++ for a new computer, triple monitors and a few books so I can teach myself" doesn't work a lot of the time (I know it is stupid)
Best thing to do would be to not drop him, but to get him on the sites AGAIN when he is in school. Also show him some ways to make money doing design.
That way he will get experience dealing with clients and building a portfolio.
::emp::