Yes I think it's okay. I had a full scholarship, and a shitty relationship with my parents. I stopped putting up with their crap after freshman year, and don't talk to them for years. When we did reconcile I was a completely independent adult and they were able to respect me as one. Our relationship needed the space, and I'm not of the opinion that shared dna obligates you to have a relationship with someone.
That being said, if the parents are footing the bill, I think they have a right to expect to be treated decently and given an appropriate amount of attention/communication. But if your kid isn't grateful for the help you've given them, and for some reason doesn't want to talk to you, I think you made a wrong turn at some point in the relationship. Either you spoiled them or alienated them, or both.