I'd do two things. One, suggest he defers, and talk him through the process. Get him to do this if even remotely possible.
Secondly, paint a picture of the future they could have together if he goes to Cambridge and gets this degree from there - the career opportunities that may well open to him, the life they could build for their children if they have that sort of income (and yes, I know there are no guarantees, but as an alumnus myself I am unusually poor by the standards of my peers - most have extremely comfortable lifestyles now, despite my college being one that attracted more state school pupils than most), the potential to actually decide if they want her to be a stay at home mother or a WOTH one (which let's face it, few genuinely do have these days). Their chances of buying a really nice house, with a decent garden and lots of space for a family, as well as having nice cars and nice holidays. Be materialistic about it, while also taking their relationship absolutely at face value as one of permanence. If they are seeing Cambridge as a threat to their relationship, try painting a picture of how it is in fact an investment in their joint future.
After all, if they stay together then that is absolutely accurate - no need to mention the other reality that the chances of their not remaining together are high, where ever he chooses to go, because he's going to be exposed to a completely different life and group of people. Offer a year in which they can work out what they want to do, and as has been mentioned, offer to facilitate coming home every other weekend over the 8 week terms, and point out that this will only mean 24 weeks away out of 52 in a year - he'll be home for 28, and she can visit him as well as he her. Would his father be willing to fund a car if he does go to Cambridge? Sure it's a bribe, but it's one that means contact between them will be indisputably easier.
I do actually see his father's point on the finances. University costs to parents are extremely high now, because support is so limited and stingy. If he's treating university as an afterthought, why should his father pour money into it? The not speaking to him part is awful, though, and smacks of his father's own ego being a tad too heavily invested in having his son at Oxbridge than in having his son fulfil his potential. And he's also going to push your son into making a stupid decision because his back is against the wall, and who of us would allow someone to dictate to us via emotional blackmail if we had a choice?