AITA for threatening to stop this kid's degree after he did a little fraud with me?

Last month, someone posted on Linkedin that there was a student from a top-tier university who desperately needed to loan some money. I reached out and turned out that the person who posted was the student who wanted the money. He said that he wanted it to pay fee and will return it in 3 months.

I took all of his details and gave him Rs. 1.2 Lac and told him to return it when he can.

But last week, another student I keep hiring on and off for small tasks casually told me that his friend used a donation drive to buy an Iphone. I probed more and found out that it was the same person I gave money to.

I confronted him about it over a phone call. He confidently accepted that he did it and defended by saying that he took a loan not a donation and will return it so it doesn't matter what he uses the money for.

I was really angry and drafted a report for his Head of Department to keep the degree on hold for fraudulent activity. I sent the draft to this student and asked him to immediately return the money or I was going to forward it. He sent me half and promised to send the other half next week.

But I feel very guilty for threatening him this way. It is ruining my sleep tonight. AITA?