I’d tamp down the transfer talk. Tell him he can target it for grad school if he has plans that go in that direction. It is a recipe for unhappy undergrad years to think that the grass is so much greener at one specific college that you didn’t get into. To be honest, you have done him a disservice to not pop that bubble sooner (like. when he put the school on a pedestal to start with). Don’t keep feeding that illusion and helping him nurse his unhappiness.