Have your classmate go to the website minidisco.com. Everything he will ever need to this end can be found there.
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I have found musiciansfriend.com to have a fairly good selection of home recording gear, from ADAT to minidisc, from studio mics to cheap mics.
Minidisc, or analogue tape (compact cassette) sounds like the only availability at that price point. I'd apportion at least $75 for the mic, and the rest on the recorder. Marantz makes some nice portable CD recorders, but they're $600+.
I bought a set of Core Sound's Low Cost Binaural Mics for $75. These mics are tiny cylinders--about 1/4" in diameter by about 3/4" long. They can clip to the recording device or to your shirt collar. A set costs $75 plus shipping and are great for someone who wants small and compact.
I get good results with a professional Sony Walkman since I still love analog. But the folks at Core Sound are helpful and can recommend various mini disc recorders.
There are many testimonials at the Core Sound website. The website may be useful to your friend. The Core Sound mics come with a thirty day money back guarantee. Good luck to your friend.