You should really go with a minimum of 8GB. 4GB will make the system feel slow even when you have only one thing open. I know because I had to make do with 4GB for a few weeks last year and it was awful.
Also, I would consider getting an SSD, even though you might have to settle for 256GB or, if you bump up your budget $15, 512GB. I bought the Silicon Power 512GB that currently sells for $58 on Amazon and am very happy with it. If it's for school, he probably doesn't need 1TB, anyways. Most of that space will go wasted. An SSD, on the other hand, would do wonders for making the system feel very snappy, even if you totally cheap out on the CPU. I can speak from experience because my CPU (an FX 6300) is over 6 years old and Windows runs great. Also, I've found that Photoshop launches much faster from SSD (<5s) than HDD (~20s).
BTW, when I need something cheap, I usually look on eBay. You can find lots of people selling used motherboard+CPU+RAM combos for $100, give or take. For that price, they'll be 3-5 years old, but still plenty fast enough for your friend's light use. If you can, follow SniperHF's advice, but, if you can't and have to go used and as cheap as possible, that's an option.