I hear you with the kid showing a program love and them not showing it back, there is a lot of that in music, there were a lot of times when we were angry for our son, wondering what was going on (and obviously, as parents, we are biased. But in many cases others commented on it who would know, who were high level people on his instrument and were like “WTH”. ). The reality is that it is hard. Kid auditions for something, thought they did great, didn’t get in. Program accepts him but screws up the process of getting a teacher (raising hand for my son). Group goes into a competition having won some big ones already, and doesn’t get out of the first round (competitions for the record are some of the most unfair things out there, despite what they claim. Politics, crazy rules, who is on the jury all can trip you up.).
The import thing here is if number 1 is not affordable, it isn’t the end of the world (and take it from me, I know as a music parent how much it hurts to have to say no). It doesn’t mean your son doesn’t have value, lot of music schools have the attitude that yes, you got in, be grateful, and if our aid is not great, well, we are a great school (they remind me of orchestras that when you go to a concert, act like they are delivering pearls before swine, same kind of attitude).
And if he felt school 2 was neck and neck, it means he felt like he could go there and be happy. Maybe school 1 had better facilties or was in a place he would rather be, but think about it (this is what I would tell my son), you got into a program that is really, really good and they came through for you, the teacher may have gone out of his way to help, and that means something, it may mean he isn’t a small fish in the sea in a school that sees everyone as a small fish.
I can tell you with a long term view, that he will be fine. If his desire is there, if he is willing to dedicate himself, he will do fine at the second choice as it seems otherwise to be a good program in his view. It also is a life lesson about music, that when navigating it you are always going to be making choices and sometimes you will end up with door number 2 instead of door number 1. Put it this way, my son went to his number 2 school UG because Number 1 screwed up, showed the same kind of indifference, and he ended up getting something special from number 2 that still has value in his life so many years after graduating.
I wish your soon smooth sailing and good fortune on the SS Music Student Cruise:)