eamh,
I have been in a similar situation to your boyfriend (but now it is mostly behind me). Not necessarily in details, but in the general scope or “fundamentals” (can go on, but it's not our topic here). It is serious and this is a reason why I am writing this. I hope I can offer some useful help. Some of the tips may seem odd, but hey I do not say everything I say is correct. But I am trying to help, and at least I hope it can help you while thinking about solutions.
1- You're part of the problem? You yourself do admit it (will come back to this later – see point #5). But FOR SURE you're an important part of the solution. Just the fact that you spoke with his mother and with the school, and you wrote this long post-- despite having exams soon-- and that you were ready to pay from your own money to solve things shows that you're motivated, loyal and also caring, which definitely can sort things out. (In comparison with people we know who treat others as “one fish” in a “sea with plenty of fish” so it's okay to walk over them and move-on as easy as 1-2-3, but I digress...)
2- If I understand your boyfriend correctly, the biggest issue he is facing is pride and self respect in front of his own self and others. Ego is an important part of us, even if we are modest we naturally want self-respect. This is at the heart of the issue, and your talking with should focus on boosting his ego using facts (reminding him with facts that he was a good student, remind him how people like him, remind him of the nice person you know he is, and still is but feels down, especially when you first met him).
Try to assure him that you will stand by him no matter what. And that yes he is in a problem, but in the long run it does not matter. He already found love, and you understand his problem if his graduation is delayed. Society, in general, barely care about someone's past if his present is good, and this is especially true in case of academic success or financial issues. If you're with him, his family is with him, and his TRUE friends with him, he should be fine. (if some of his friends judge him too much, he should consider what he is going through as a filtering process to see who really cares about him and who does not).
3- You both are medical students, and you should remind him that humans are weak. He is smart, successful, but he is a human being, and life will us sooner or later how weak we are (death is the ultimate proof). He should accept what happened to him in a “scientific” way, and not in a personal way. This acceptance is the first step to face his problem.
4- I think your boyfriend have “information overload”: he has so much problems to deal with, and he do not have enough focus power to deal with them or time. I think as an option he should seriously consider taking one semester off. It can clear his mind so he can face things in an easier way and also to discuss his expectations and your expectations about how you can go through this.
5- It may sound odd, but it seems at this stressful stage of your life, may be you should control communication with him for the best of you both: not cut communication, but control it. And you both can communicate during times when you feel relaxed, and avoid stressful times or stressful topics (e.g. you can meet on Friday evenings, but Sunday evenings is a no-no. During exams phone calls should be no longer than 5min, and not necessarily daily). You can even put a role of not discussing the details of your medical school studies, or to speak very briefly about it. This is especially since it seems talking about it is more destructive than constructive in the short term.
6- Again it may sound strange, but if you and him have close friends, you can get one friend involved from each side to sort things out when a serious next fight happens. Your close friends can understand you well enough to sort things out, and they have “judge” the fight more “objectively”. The important part is to choose friends who are good and caring to do this, and who understand the seriousness of it. Trust me, it works. It can mend friendships between friends who had fights, and it can fix problems between people who love each other. (or even better, if possible, you can involve a family member like a sibling or a parent – e.g. your sibling speaking with his mother).
[in the same way that asking us here can help, so good friends and family members can help too]
7- If he does not want to see his friends as he feel bad himself, you can introduce him to your friends – especially ones he have not met before . Or to hang out with you and some of your friends whom he doesn't hang out with often (or with friends of yours that he knows). Those are between new people and friends, since they're your friends, and he can feel relaxed talking with people who don't know him much. Or you both can go together to do public activities where talking with new people is involved. (you know, a lot of people who have problems feel very comfortable talking with taxi drivers about them, or about other things. Since they don't know each other much, and they won't feel that they will be judged, plus they don't know each other and formality can bring some stability to the conversation)
I ask God to guide you to the best while going through this serious issue.
-Paladin777