Our daughter was 18 and flunking out of college, and she doing things we didn't approve of. She was given the choice to stay at home and get her act together, or she could move out so she could do whatever she wanted. She moved out. Not living with us then, she had the freedom she wanted, and I had the freedom of not witnessing her shenanigans. She threw away her scholarship when she left college, which she now regrets.
We signed for a car loan and told her at the time “this is your responsibility, if you don't keep it up, it will go back, we will not pay for it.” So she tested us. She lost the car, we did not save her. She thought that we owed her the education, the car, and paying for her activities but we didn't have any say on her activities, she didn't have to listen to us. We took a step back, the ball was in her court. It was a very hard thing to do but necessary. It took 3 years and it was very hard on us, but we had no contact with her during that time.
Then, she did make the choice to contact us and we had a long talk. It came down to the fact that no matter whatever else we did, we didn't tell her we loved her enough. So, because of what she said, we made changes, and we now have a loving normal relationship with her. Because we all decided to talk and hear each other out, we were able to reconcile.