E3 is the best that any branch of service will let him have for prior service time.
The good news is that he will be eligible to place his name onto a waiting list for A school in pretty quick order.
I am a prior service Marine. The whole nonrate thing kinda freaked me out too, until I figured out the reason for the whole thing. While a nonrate, I worked as a deck hand. I had an opportunity to actually see what the various rates did, day to day, and make my decision from there.
I ended up picking the medical rating, after taking two years to consider my career path. I am glad that I did, as 20 years later, I still love my job and coming to work every day. When picking ratings, please urge your husband to go with the career field that he is interested in, not the one with the shortest waiting list. While I feel that all jobs in the Coast Guard are needed an noble, one has to consider that there is a reason that some jobs have very short waiting periods(long sea tours, type of duty, and etc).
Color blindness is something that will severely limit your husband's career choices... but that is true in any branch of service.