Your son (and everyone else) is entitled to a prorated refund of all money not used. Since there is no legitimate way he, or anyone else for that matter, could have burned through the entire amount by the time of the Instrument checkride, he (or his lender) is due a sizable refund.
When I left ATP, I (my lender) had already made the first installment of $12500. When I withdrew, they immediately canceled the loan (I verified this via Sallie Mae) and began processing the refund. The unused funds were returned to Sallie Mae a full week earlier than ATP promised. The only money not returned was the $995 deposit and the handful of hours in the 172, which were billed in accordance with the rate sheet provided.
If ATP truly is not returning unused money, I suggest hiring an attorney.