All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
There is no doubt that the religion of Islam and its legislations, principles and branches are correct and upright. Saying that insulting is the greeting of Islam is disbelief because the person who said so attributed to Islam that which is not part of it, and this is defaming the religion; and defaming the religion of Islam is disbelief. Ibn Al-'Arabi, may Allaah have mercy on him, commented on the Saying of Allaah (which means): {… and defame your religion}[Quran 9:12], saying that this is evidence that whoever defames the religion is a non-Muslim, as he is attributing to the religion that which is not part of it, or objects to what is confirmed in religion; as it is confirmed with absolute evidence that its principles are correct and its branches are correct and upright.' Even if the one who said that statement was joking, he still becomes a non-Muslim by saying it, as he is mocking the legislation of Islam and making fun of it, and it is mocking about the acts and statements and not consider them as serious issues.
Therefore, your classmate is obliged to repent, regret what he did and seek forgiveness from Allaah. If he sincerely does so, he [still] is a Muslim.
Allaah Knows best.