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I am sorry to hear about this unfortunate situation.
Did this student signed the form and checked off that he was a US citizen and then submitted it?
Thank you for your follow up.
Unfortunately, not only it is a federal crime to falsely claim US citizenship, but it is also one of the several instances when someone who falsely claims US citizenship, is automatically becomes banned from ever obtaining US citizenship, so this is an issue that would need to be addressed by this student with an experienced local immigration attorney who will need to address the issue with the authorities where application was submitted and hopefully resolve it.
I wish you the best of luck!