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Hello and thank you for your question.
It does seem harsh but almost certainly they do have that power, assuming the college has rules that you and your son agreed to prior to his placement at the college.
Also be aware that supplying alcohol to a minor, even your own child, is an offence in most states (I am not sure where you are located), so technically, you could be referred to the police if you admit your role in his possession and consumption of alcohol and could potentially face charges.
I appreciate this is not the answer you may have been hoping for but it does reflect the law as it applies to your situation, and I trust it at least assists your understanding.
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