I note that you say "his" budget. Sounds like he'll have a financial investment in the deal. If he's only interested in a street bike, I'd look for a Honda 250 Rebel. Reliable and he can resell it in a year for exactly what he's got into it when/if he's ready to move up. That's assuming that he'll fit on it. They're making kids a lot bigger now than in my day. If he's tall, then you may have to go bigger just so he'll fit.
A shame that Honda doesn't still make the CB350.