OP, now is a chance for you to model fiscal responsibility to your children. While it would be wonderful for your daughter to be able to attend a school like Duke, if she is competitive for Duke there are a number of schools that, while not of the same caliber, will offer a great education and tremendous opportunities and be much more affordable. If she’s serious about engineering, your starting point should be the list of ABET-accredited schools. Then, start to talk about what she really wants in a school - what does she love about Duke? What are some of those factors that she might be able to find in a more affordable school? Is it geography, school size, high-profile sports, academic rigor, beautiful campus - if you can identify tangible criteria, you can look for other schools that meet many of those criteria.
I’m sure you’ve had to make many other difficult financial decisions. Did you buy your dream house, or the best house you could afford that would allow you to get your kids a good education? Did you buy sports cars, or practical cars that met the needs of your family? Did you take exotic family vacations, or more affordable family experiences?
If you break your retirement for kid #1, what message does that send to the younger ones if you can’t afford the same for them? (H’s family did that, and it’s still a sore point 30 years later). What if you can’t afford all 4 years at Duke and she’s forced to transfer before completion? My D wanted to go to Duke - we did not discourage her from applying, but did let her know there was a ceiling on the budget that we would not - could not - go above regardless of the school. S internalized our messaging and had no interest in applying to schools that didn’t offer merit aid - he was very focused on zero debt for both him and for us. He even decided on his own to look at schools in the Midwest as they are often far less expensive than those on the coasts.
Both my kids now are in schools that others think are “beneath” them - but they are having amazing experiences. They’ve got opportunities to make connections in their field, do research, and work internships, and they won’t graduate with a pile of debt or by having drained our retirement. We can afford for them to study abroad and take trips that wouldn’t be possible if we were paying $60K/year for school.
If you do break the bank to send her to Duke or another huge financial reach, you’re setting a precedent of financial management for your kids that may not be what you want for them to take with them as they move out on their own.