Seems like you have answered your own question.......

You are entitled to a refund, but nothing more.

While these letters are perfectly legal, most lawyers advise to simply ignore them.

A very obvious scam..................................................

Ask your parents. Their rules are the ones you need to follow.

Obviously none of us knows the facts of your son's case, so none of us can opine whether his PD is simply being candid. As noted, your alternative...

Obviously this is all new territory and it will eventually be up to a judge to decide.

Check the Terms of Agreement for using the cite. That will tell you whether and where you can sue.

Go to base legal and the IG. There really is no cause of action for breach of contract in the military so you need to work it out internally.

These are questions you need to ask your attorney. This is not a DIY project.