When I went to school i understood up front that while putting some money down and making payments would let me attend the school I would not be allowed to use the school's equipment to take the CDL test until it was paid in full. If the loan company backed out why do you expect the school to let him get his CDL without any guarantee of payment?

I guess the real question here is how much money did you put down, or in other words how much are you out? Is it worth arguing over or should you find a different school and start over?