It seems you already understand, but I just wanted to post this as well.
Median starting salary for graduate of "top tier" school : $135,000
Median starting salary for graduate of mid tier school : $70,000
Let's say your son went with option 1 and you provided zero financial support.
Student loan debt : $200,000
Now let's fast forward 10 years.
Option 1 = $135,000 x 10 years - $200,000
Option 2 = $70,000 x 10 years
At 10 years he would already be surpassing option 2. This is with baseline numbers. I googled some info and found out the median salary for someone in the midpoint of their career from a certain "top tier" school in Pennsylvania is $180,000+.
From strictly a numbers perspective, even with taking on loans, it makes absolutely zero sense to go with option 2.