A college formal doesn't mean formal like black-tie, it means formal as in guys wear a tie and girls put on a party dress.
If it were a winter formal, he'd likely want to wear a darker suit, but for a spring formal a khaki suit is completely appropriate.
Some of the guys will likely show up in a blue blazer and khakis.
Either the light blue or white shirt will work. Pair it with a tie with some red in it, not a "red power tie" but something with a spring or lighter feel.
As someone stated previously, a bow tie would be an excellent look with this.
I think what you described sounds perfectly fine. While a dress shirt would be a bit more formal, its unnecessary here in California and especially in Santa Barbara which is really a resort community and a place where a polo shirt would not be out of place at all.