I am struggling with an issue...

Background: SS16 has now lived with us for almost 2 years, since he got out of a treatment center. His mother has no contact with him and I think it's because she felt that she 'lost' control when DH got custody and she doesn't want to have to answer to DH. SS16 is having abandonment issues and is really screwed up from all her PAS attempts over the years. We are thanking the treatment center every day for being the ones to open SS's eyes about the way BM1 was PASing him against DH.
I KNOW DH feels nervous to set stict rules and boundaries with SS16 and I know it's because of the way that both BM's left and took his children away.(BM1 with SS16 & a few years later, BM2 with SD13) DH has been working very hard to set down rules and follow through with them to teach SS to trust us more, but I also see how he is easier on SS16 than he is on our BS8.

We have never seen this child on the phone to friends, hang out with friends, want to go anywhere with friends, anything... Child turns 16 and is now allowed to group date.
One week after his birthday, he goes out on a date with another couple for the day. That evening, I say they can all four come over for dinner... When I pick them up, there is only SS16 & N (that girl), cuz the other 2 'couldn't stay out any longer'... RED FLAG!! As the evening progresses, she (N) is calling him her boyfriend and they can't keep their hands to themselves, and when I take him to drop her off, he says "love you" to her... Needless to say, we had to tell him that acting the way he was IS a 'relationship', not casual dating.
I also had to tell SS16 that I did not know this girl, but the way he has changed and is acting (disrespectful, entitled, full of himself) is affecting how I feel about her... I don't need to know her, to see how she treats him and in turn, how he treats us. His attitude is what is making things harder for him... I'm so glad they go to different schools!!

Fast Forward to main issue:
N invited SS to the Sweetheart Dance at her school. He wants to go. We told him that he had 2 weeks to retake and pass 2 tests in his Biology Class. (He is allowed to retake tests until he gets a 70% or better) The dance is now this upcoming Saturday & he still hasn't passed either test. His friend (D) has already paid for the tickets into the dance and for the pictures at the dance. SS thinks that we should let him go to the dance because it's not his fault that the teachers are unavailable when SS deems it time to go try to take the tests. Plus, SS is desperately worried about letting his friends down. He would rather us 'forget' that we set boundaries so he doesn't 'loose face' with his friends.

We sat down with SS16 last night and he cried at us that we were trying to stop him from going out and seeing his friends. We told him that any friends worth having would be pushing him and helping him to pass these tests. We also pointed out that WE were not stopping him from anything since he has seen her 3 times in 3 weeks AND has talked to her on the phone EVERY night. He missed hanging out with his friends one Sat because we said he had to turn in a missing assignment by Fri and by accident, he left it at home. I saw the completed homework on Thursday evening... HE was responsible for turning it in.

I guess I'm just looking for validation that we are doing the right thing by holding him responsible for these tests and that we are not the most horrible, awful people in the world if he can't go because of HIS actions, or lack of actions.
I know that he can't and won't use the "I'm moving back to BM's house if you don't let me go", but I know that sometimes, DH worries about this and that's why DH is nervous to push.

We have considered that IF he shows us that he was working hard by passing at least one test and getting a better score on the other, then we could let him go, but I don't think he'll get either passed at this point. SS is giving up on SS. His BM never taught him how to problem solve and she always made sure that he was given lots of disappointments and blamed DH for them so SS is now very unable to figure out what he needs to do to get these tests done.

I HATE BEING THE BAD GUY!!!! I worry that DH will cave & I will be the evil B!tch!!!