Sorry to hear this. Capt MJ, as usual, has great advice.
I just wanted to point out the NROTC sideload process for your edification. It's a national competition that is not handled by the unit, so the advisor would have no real insight into how competitive he was, since he didn't know the competition. DS only received a sideload after first semester of his 3C year. Also not everyone who commissions via NROTC receives a scholarship.
No doubt your son's determination will help him work through this particular set back. Did he get any info on his ability to commission through another program?