Thanks to a loss of wifi signal, my original message was lost, but I completely agree with Denise's original post.
He can't have his complete freedom if he still expects you to finance it. So, if he were my child, I'd give him 2 options.
1. It's our house and our rules
2. Congratulations - see how you do on your own
My sophomore year of college was spent out of school for no other reason than financial. I worked 3 jobs to get back to school. I'd been a Dean's List student the semester I learned I'd not be able to return. Making $7/hour teaches you a lot about how much you want to work towards something, and spending those 15 months working like a dog taught me a lot about myself vs. most other 19 year-olds.
As hard as it may be for you and his father to let him fail, if he refuses to be completely responsible at this age, one of the best things you can do for him is to cut financial ties and let him try to make it through life on his own without a degree.
When I was 14, my sister got engaged. She was 19, her fiance was 26 with a Master's Degree in Aeronautical Engineering. I couldn't understand how my parents could "let her do that" - they said they'd rather keep a daughter and let her make mistakes than to lost a daughter. Education is very important to my parents - my dad has a PhD and was a tenured professor when we were born, but they recognized she was an adult.
If he were my child, I'd make it very clear. If you want college paid for, you play by our rules. If you're not willing to, good luck paying for it on your own.
I have a 40-something year-old second cousin who is brilliant but a complete loser. His parents always bailed him out and let him do things knowing there was always going to be a financial safety net. In his 40's he now works as a diesel mechanic, a masseur, and a carpenter when he can find work. The rest of the time, he lives off of his dead father's inheritance.
Some of the best lessons in life are taught by the hardest of circumstances.
He's not doing anything that differently from most kids his age, and thank Goodness, he's being honest. But, you're enabling him as his parents and may be legally liable if something happens.
Good luck. I hope he outgrows this stage quickly.