Read it again.
"Using a foreign passport in order to obtain status as a foreign student is precisely that, proof of naturalization in a foreign state."
He voluntarily relinquished his US citizenship to get a scholarship as a foreign student.
You can't have it both ways here. If he accepted the scholarship, he relinquished his citizenship.
End of story.
“by voluntarily performing any of the following acts with the intention of relinquishing United States nationality
Read it again.”