Moral vs ethical

One of my low level students only works when he has to. He is charismatic, so when he doesn't work, he brings 4 or 5 down with him.

He earned a 25 on my exam. They were allowed to work together, but he hadn't done the review (he had an A in the course, no worry). Obviously, the ones who chose to work with him fared badly as well.

If I lower one of his test grades, he'd have a B in the course and be motivated in the second semester (maybe) to work harder and pass, since the state test is in the 2nd semester. If not, he still has a barely A.

I cannot bring myself to do what is best for the student - lowering his grade. I hope I am not dooming him next semester.