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That sucks donkey balls. You and your close ones will get through it, but its the time in between. Man. As for your man's situation - that's tough. Best of wishes - even if someone's lifestyle choices are awful, its never easy when it hits the fan.
For the school - isn't there any sort of appeal you can make? Is there any contract involved? It seems like you could apply to pressure to whomever is truly responsible (job or school) for screwing you over. Don't take it lying down. This sounds like a government sponsored internship. You signed on under a previous set of rules; they change the rules in midstream, you get screwed. Usually these things have a "grandfather" clause where it only affects people that are new to the program. That just sounds really really shitty. They might "know they screwed you over," but if you don't bust their balls on it, they can just ignore it. Don't let them. That's my advice.
Best of luck - tec already said the rest.
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