Toss the KRK 5" for some real monitors! The 5" are especially bad. 6" and 8" are much better, but still very hi fi. The 5" suffers from one note bass syndrome. Very distinct hump sound at 80Hz ish in an attempt to extend the perception of bass response.
But seriously, if he's getting started, I'd tell him to expect to want to save some money for a monitor upgrade in the future, but the KRK 5" would be fine to start out on for now.
Most important thing though is to get him and his Dad to head down town, get some 503 and build a vocal booth/guitar cabinet! This is what's going to take things the farthest.
Then of course the student version of SONAR (same thing but cheaper - just not licensed for professional $$ making use).
I'd probably almost suggest getting just a cheap mic for now. Just like an AT2020 or something. That way he can learn the limitations of it and learn to make the most of what he has. Then is he breaks it it doesn't matter. It's good to have a cheap condensor your don't care about for just recording demo parts. That way you can just leave it lying around wherever for quick idea recordings. Of course a 57 as well. Some mic stands. Pop filter. Don't need too much. Maybe a Korg NanoKontrol and NanoKey interface for some MIDI. Those things are like $60 each. Great prices!