We did not tell our daughter that she could not go away to college. Our oldest daughter is away at college right now for her freshman year. She could have gone to a 4 year state university an hour from our home and commuted. That university, however, does not have the major she is interested in, plus my husband and I both went "away" to college and we feel strongly that, if you can afford it without going into debt, living away from home as a college student is beneficial.
What we did was tell our daughter, long before her senior year, that we could afford for her to attend the four year in-state university of her choice and she would be able to graduate from such a school debt-free. She received some scholarships from private universities in our state that would have enabled her to attend those for about the same price as the public state universities but they didn't offer the major she is interested in and she wanted to cheer for a Division 1 school. Had she wanted to go out of state, she would have had to borrow and, luckily, she is very level-headed and did not want to graduate in debt. She is happily living in a tiny dorm room two and a half hours from home, having a ball cheerleading and is, thus far, doing very well in her classes. She doesn't get to come home very often because she often travels for away games but we go to the home football games and take her out to dinner afterwards.
I will point out, once again as I have many times on discussion threads like this, that student aid and student loans are very different these days from what they were when my husband and I were in college in the 1980's. A student can only borrow $5500 as a freshman in subsidized Stafford loans which do not require a co-signature. Any other loans will almost certainly require a parent's co-signature. Therefore, because a parent will ultimately be on the hook to repay student loans, I feel it is completely reasonable for a parent to have substantial input as to how much will be borrowed and for what purpose. If a student can put themselves through college without loans requiring co-signatures, then I believe the parent's input should be much less. The fact is, however, that the days of a student being able to earn or borrow enough money in their own name to pay for a four year university education are over for most students. Obviously, students who receive substantial merit aid and need-based aid are different. I am talking about the majority of students who will not qualify for significant merit aid or need-based aid. Those kids will be stuck with only $5500 in subsidized Stafford loans and Parent Plus loans or private educationl loans which require co-signatures for the rest, unless the parents and student have saved and are able to pay.