This is going to be really painful to watch unfold.  Skids that are not prepared for life, coddled, have a hard time adjusting.  You cannot be easy on either of them.   This is a hill to die on  IMO.  
 

Ideas ;  a signed "rental" agreement with expectations, costs and consequences for failure to uphold agreements.  
Reimburse college expenses AFTER proof of passing grades and credits earned.  I think all kids do better with skin in the game   If not college than trade school.  

Time limits for car expenses and phone bill  there must be a final date where SS takes them over.  These two expenses can last a long time in a situation like yours so be firm   
 

Don't let him hang out with any girl friends in his room   If he wants those activities then he can move out   Do not make him comfortable , moving out should be more attractive then staying there   
 

No WiFi code for slacking   Free ride is over.  
 

Getting DH to understand that all kids must grow up and move out and that HIS life with you improves when that happens is important. How long have you sacrificed? You've waited long enough to have DH to yourself.   
 

I'msure you'll get more ideas     

He does not do his daily chore list, he does not eat. Pretty simple.

We used a version of this when SS-32 had graduated HS then turned 18 three months later. He was on our dime for the summer after HS graduation. On his 18th birthday he had to be enrolled to start fall classes at a college, university, or tech/trade school or he had to be working full time to stay in our family home. He refused all of those options. We would have funded the mom and dad full meal deal scholarship and he knew it.

Instead of putting him out we made it clear that if he wanted to eat, sleep in the house, etc... he had to complete a very long chore list daily while his mom and I were at work full time M-F.  If he failed to complete that list on any given day, he was on the curb when we left for work the next AM.  He tested us twice in the first 4mos of that period. Both times he had a very long day outside of the home with no food and only the garden hose for water. His call. Do the chores, or not be in the home.  To highlight the situation we turned off the WiFi and cable when we left for work every AM.

His firsst test of the rules was in Sept when it was hot.  He was miserable and was angry as hell about having to sit on the back covered patio all day sweating.  He was pretty dehydrated by the time we got home. That was his introduction to the garden hose as a water source.

The next time was Dec and was a bit chilly. He was shivering when we got home though we had tossed his bed comforter at him as we locked the door and left for work.

A few weeks after that he enlisted in the military on the delayed entry program.  To stay in our home until he shipped out for basic he still had to compete his M-F chore list. If we went out to dinner, he came with us. If we took a weekend trip or vacation, he came with us.  But... he had to work. Since he did not want to get a job, he worked as our beck and call chore boy. Unpaid. His pay, was room and board.

This was the burning platform that motivated him to launch into adulthood.  IMHO, when a kid reaches 18 and HS graduation or drops out, it is the parent's duty to force them to launch if the kid chooses to not attend higher education or get a job.  

Some kids need to finish growing up on their own Dime and their own time after turning 18 or finishing HS. Whichever is first.  Unless they drop out before graduation and turning 18. Then, it is forced emancipation of a minor time.

IMHO of course.

My daughter is at college in another city, working towards her master's.  We pay her rent, her car insurance and she's on the family phone plan (costs next to nothing). That's it.

She works during the holidays and does the occasional event gig during the school year for anything and everything else (OK, Ioccasionallystock up her tiny fridge).

There was a time when she worked weekends during term time but her studies started to suffer and she stopped (I had the same experience many years ago). Full-time college then work all weekend just didn't work for her. She is a hardworking kid and we're proud of her achievements  ... we know she's going somewhere. 

PS - she pays our Netflix  *biggrin*

You may not like all of what I say.. and I will caution that what I am advising does hinge on your husband's financial standing... (not yours.. his).

I believe that children living at home after 18.. (after the summer they graduate high school.)  should be either working full time (or two part time jobs, or going to school full time.. or going to school part time (3 classes or less) and working part time.  (so if full time in school.. a part time job may not be 100% possible.. but should be encouraged.. if only going to school part time.. a part time job is expected).

If a child is living at home and working full time... they should pay a reasonable amount of rent.. The rent should not equal your local one bedroom apartment rent.. but should be somewhat meaningful.. maybe 500-800/month.. a bit more if you are including groceries and all utilities in that.  

I will say that lots of parents do help their kids with certain bills past 18 if they are in school full time. including things like cell phones, health insurance and car costs/insurance.  This is of course only if the parents can AFFORD to do that.. obviously not everyone can.. but if a parent is solidly able to help the kid meet costs while the kid is pursuing a full time college education (or trade school certification).. then I am absolutely fine.. in fact think it's something a parent should do if they can.

As far as the cost of tuition.. My parents paid all of my college tuition and board costs.. I did have part time jobs to spend on incidentals.. but they did cover those costs.. and were well able to financially .. they weren't eating beans and rice to make it happen. 

If your husband can afford to give his son the gift of an education with no debt.. great.. that is wonderful.

What I would suggest is going through the FASFA process and see if there is any grant/assistance he might be able to get.. and if the remaining amount is swingable by your DH.. I don't disagree with him (your DH) paying that.  

Now.. if the kid only wants to take a couple classes?  I also think your DH should try to pay those costs.. BUT.. the kid would need to get at least a hefty hour part time job that would be used to pay for his spending money.. and other costs as affordable.. like towards his car costs.. cell phone etc..  The reality of whether he could also afford to pay his way in rent on a part time job.. that may or may not be realistic.

If he chooses not to go to school.. the hammer falls harder for me.  That merits a full time job.. and it also merits him paying his way for things like his vehicle cost and insurance. even if it means that your DH just banks a portion or all of the rent paid to return to him as a savings/nest egg to go out on his own in a few years. (some idea of how long is reasonable to allow him to stay at home if he isn't in school is worth having with your DH).

I will say that I did come from a family where financially my parents could afford to do what they did for myself and my brother.  I understand that not all families can.. and in fact, we did not pay for my SD's college costs.. but my younger SD works full time at a company that does all her class reimbursement.. and she is almost done with her associates and has started her 4 year classes too.  

I do feel that it's probably unrealistic to think a teen/entry level kind of job is going to bring in enough money for the kid/young adult to pay a chunk of rent plus transportation.. and then be able to afford college classes and supplies on top of that.. Pushing him to get loans is a handicap he will carry for a long time.. so if his dad can afford to do more without going in debt to do it.. I would hope that a parent could/would help their kid get a higher education or trade skill that will provide them long term ability to get employed well.

I will caveat this also by saying that I am advocating basic kind of support.. not luxury private schooling.. not expensive fraternal order memberships.. not boutique schooling (my YSD wanted to go to some fancy yacht designing school.. uh.. no honey.. ) and.. it has to be reasonably affordable by the parent (s).. but I am someone that had parents who did it for me.. and I don't think a parent's responsibility to help and be parents necessarily ends at the stroke of the clock at 18... but I also don't support letting the kid just sit around all day playing nintendo.. that would not be acceptable...  even if he was paying rent.. it would irk me.

As a BM, both my bios are in college full time. They have also both held various jobs. However - any job you can get with only a high school diploma pays nowhere near what it would cost for housing, food, car, car insurance, phone, healthcare, and (the big one) college tuition/books/fees. Have you priced car insurance for a teen? I know it's state-dependent, but car insurance for me and my 2 kids is more than my mortgage. School expenses are insane. I help with what i can and so does my dad.

I consider this an investment. My SO's oldest 2 are late 20s, and neither got a higher education. They regularly text him asking for money for food, gas, and rent. One of them has been homeless and the other has tens of thousands in student loan debt (possibly over $75k) for a degree she didn't finish. This will probably go on the rest of their lives.

With the help my kids get, they are expected to treat school as their main job and progress with their degrees according to the plan. The degrees were selected to lead to actual jobs. They go to state schools, and not the "flagship" one. Both have conditions which disqualify them from the military so this is the best route for my family IMO. Maybe one day they will be able to help me out. 

My daughter and I toured many colleges.  I was prepared to pay living costs and tuition at a state school.  She chose a private school out of state in a large city.  So, I paid tuition but she got a loan to cover living expenses.  I figured tuition was a fixed amount but living cost was variable and that would teach her to economize.  She didn't need a car there, public transportation was available 

I didn't ask questions about her finances, she needed to experience it all herself.  She ended up working part time and stayed there during summers.

I was lucky, didn't have trouble getting any of our 5 to leave.  Sometimes, I wanted to leave, too.  Lol.

...is a tough one, as there are so many variables.

I did not receive one penny, from my parents, for my education. (Good or bad, I am sure this has colored my viewpoint.) So, I know it can be done because I did it. Yes, it was tough. My daughter graduated at age 17; 1 year later she graduated with an AA and AS; 2 years later she graduated with 2 BS degrees. I did help by paying some tuition and all types of insurance, but she did it mostly on her own. She worked 3 jobs and incurred a small amount of debt which she is free and clear of. By age 21, she was seeing the fruits of her efforts; at her second post graduate job she was working for a very successful firm with her own assistant. She left after a year for a more lucrative position and has been rewarded well financially and promoted. She is 26. She has written her own ticket with brains, determination, and social skills. My son graduated with an AS and zero debt. I helped him in the same way, by paying some tuition and all types of insurances. Although he has brains and social skills, he has a different level of determination and has opted out of more schooling at this time. He has a good job, recently bought a house, and is content. He is 25. My daughter and son are polar opposites. I love them both equally; yes, I am proud of their achievements but that love is not based on their achievements. I am more proud that they are kind and functional adults. So, yes, I did help them but their achievments were their own.

Conversely, my huband's children were taken care of fincancially and he was not fully in a position to do that. That still affects him to this day. He is fine, but has not been able to build his own wealth to the degree he could have.

What works for one family may not work for another. Steplife has got to put a whole different spin on things. I am so fortunate we did not go through the college days together; our differences in child rearing would have been really challenging.

Today,  this is the first step. A new 40 hour job.  Then could look into college. It's late to apply for college in September,   DH will pay as long as he passes his classes. Not sleep through them 

There's never been a plan or expectations about what an adult child is expected to do? That's almost abusive, imho.

If that's the case, you have to start small. What skills does SS need to live on his own? Can he handle a bank account? Pay bills? Make a budget? Buy groceries? Make medical appointments for himself? Clean a kitchen?

Does he want to go to college? Trades? He has to do something productive. It's not realistic to expect him to pay for college or training if he doesn't have any income. So you need a long-term plan to wean him off of dad's wallet. Exactly what that looks like depends on DH's financial ability (that doesn't bankrupt the rest of the household).

Why has DH postponed this for so long? Does he think that SS will just magically become a responsible adult?

You also need consequences if SS won't do these things and expects to sit on the couch while everyone serves him. If DH isn't willing to provide those consequences (shut off WiFi, no car, no spending money, no travel, etc.) then you're fighting a losing battle. 

We always told all the kids (bio and step) that once they graduated high school it was their choice if they:

Wanted to work full time, no college and save up to move out.

Go to college part time and work part time.

Go to college full time and work a part time job if possible.

Join the military and GTFO lol.

We agreed to pay part tuition and part books the other half would be on them.