OK so he upped his demand. If you want to sign him, meet it, and he will sign. I've never yet seen a player screw with you if you meet his second demand.
The point of the Inbox message is that if he outright REJECTS ("I'm going to finish school"), you will get the X next to his name in the draft screen, and you will not be able to negotiate with him from there anymore. When that happens you have to keep the Inbox message because the link in it will be the only way to get back to negotiations.