When D19 went off to school 5 weeks ago we told her straight out. No money for a 5th year. Lose your merit scholarship and you will be back at home going to one of the local schools where you can live at home. That is life in the big city kid.
Building an emergency fund is important for everyone. And it is a great lesson to pass on to your kids. I am not here to preach to everyone, but having cash on hand to pay for unexpected expenses feels good.