Honor college with string attached

Ivy presumably offers more opportunities, so does honor college.  Most likely that he is going to the honor college tuition free, plus other scholarships.  The string is that you are going to finance his extracurricular activities if he chooses to go to honor college. Activities like spring break, winter break, study abroad, scuba diving, mountain climbing, unpaid internships etc. 

Plus he has an opportunity to write "I decided to decline your offer...."

There is no right nor wrong, only affordable or not.