I think you are being harsh, exactly how many of his graduate friends will stay in uni city?
My DS is just finishing a YII, most of his uni friends will graduate this summer and go straight home, very few will still be in uni city when he returns in Sept.
He plans to travel after graduating next year, he has saved money from YII, but he will come home next June after finishing uni and can stay here as long as he wants before and after he travels. It is still his home as far as I am concerned. He does have serious career plans, based on his YII, but we know it may take time for him to get back into that industry.
DD is similar to your DS, lacking confidence and direction, except she is not planning uni at present and has no idea what she wants to do. She just turned 19, had a year working in retail and saved to fund volunteering/travelling abroad. She heads off volunteering in Sept, back for Xmas then hopefully goes travelling. There is no way I would tell her that she couldn’t come home afterwards, whilst she decides what her next step is work/study wise. Again, this is her home.
Both kids have proved that they can save money, they help in house etc. We have not handed them money for travelling (even though we could afford to!) but I also haven’t charged DD board this year, on condition she saved (initially to replace childhood savings that she used for her car, then for travel fund).
Equally I don’t stop them chilling and lazing when not in work - I fully expect my DS to have a chilled summer in front of our TV after a very busy YII job (he’s been living in a different city to his uni) - given the opportunity he would have stayed on till Sept but wasn’t an option.
Maybe the travelling is just what your DS needs right now to broaden his horizons and work out what to do. That will likely be achieved quicker if he comes back home. Perhaps make it a condition of him returning that he starts plans to go travelling. Would he consider some volunteering abroad - if so, I can PM you some of the organisations that my DD researched.