From the student side of things, I got into my dream private university for a super-hard major ($60,000 per year, I wanted to apply ED, but that would give me a lower amount of aid leverage than if I applied RD), aaaand my parents said they could pay, but not without taking money out of their savings. At first, I was ecstatic that we could pay, but as I started talking to alumni from my high-school and from other sources, I realized that undergrad. means something, but not everything - grad. school / internships / experience mean much much much more.
When my parents told me that it would be pretty impossible to handle their current financial responsibilities after paying for my dream university, I was devastated at first. I simply did not want to believe that they had “led me on” to thinking that they would support my education to my dream school if I got in, all to let me down in the end. It was only after a LOT of introspection that I realized that going to a dream university and paying full-sticker price did not outweigh my other options (full-ride @ USC / merit @ Duke), especially because my worth would be more determined by what I did with the opportunities I was given rather than the name behind my degree (it also helped that I needed to save money for medical school, and a full-ride helped me do that @ USC rather than being broke and needing to take on loans after undergrad @ my dream school).
I guess what I’m trying to say is that it won’t be pretty at first - there will definitely be fighting, yelling, and all other sorts of dilemmas to be faced because your kid is feeling HURT and “betrayed” to an extent. But slowly, as time moves along, your kid will realize that undergrad. matters less than grad. and his / her experience and internship / fellowship / shadowing opportunities that he / she should take the utmost advantage of.
And at that point, he / she will realize that its fine if he doesn’t go to his dream university - his life will not be DRAMATICALLY altered by his undergrad. school, but more so by his actions, words, experience, and graduate studies.
Hope this helps!