Reasonable nylon-string classicals can be had second-hand for not very much money at all. Pay £30-50 from a private seller and take a chance, or pay £50-75 for an el-cheapo one from a music shop and know it's been set up OK (you can probably make those numbers into dollars for the US, since guitars are cheaper over there). It won't sound wonderful, but it should be good enough to start with. Double or treble the price and you can get a much nicer guitar from the music shop, but that may be too much of a risk for your friend.

Graham.