I know you came here looking for an answer, and in my professional opinion, you are correct. The problem, it seems, is that you're really stuck, because doing the right thing is not easily available.
I can only tell you, and stand behind you to stick behind your instincts. Feel free to copy and paste this if you need to - an answer from someone with ten years, not only educating, but also researching education.
Sending your son to University now is an absolutelty BAD idea. Saddling him with a student loan to reinforce that bad idea is bordering on lunacy, sheer lunacy with a side order of Dad's ego.
The idea of setting your son up to fail, with the inevitable burden of debt to follow is completely insane. Why? It seems to be, with all due respect, to be forethought with some kind of bootcamp (I may be wrong) notion of, "Well, you're going to do this, and you're going to succeed and that's absolutely the end of it."
Wow. So, who wins? Well, when your son fails, whose fault is it? Oh, it's his, right? Nope. The way I see, from the viewpoint of the mediator that you're looking for, is if your son fails at something everybody (but Dad) knows he is simply not ready for and/or just doesn't want to do, then it sounds like Dad failed. Dad failed to listen. Dad was so stuck in his preconceived notion that he enabled his son to fail.
Dad should take his pride out of the conversation and join it. And that conversation should be..."OK...you're not ready for University, and we're not going to force you into further failure. BUT that doesn't mean you're going down a path of productivity. Who do we see next? Is it a career counsellor? Is it a counsellor? If this is the wrong path for you, because we WANT YOU TO SUCCEED, then we'll help you find a path. You're not ready for this one...but that doesn't mean, there is none..."
The course your son should be taking towards Uni is not yet on the horizon., Pushing him down a blind path he doesn't yet want to follow does no one any favours.
Do all you can to follow your instincts and have that discussion your son deserves to have.
Let me know how it pans out.