The 19-year-old YouTube star has “no plans to return to USC” when classes resume on Monday, following her mom’s indictment and arrest for her alleged involvement with the college fraud scandal.
“She can’t handle anything right now. She seems more and more upset every day. She just wants to stay home,” says the source.
Although it is unclear whether or not Olivia Jade was aware of her parents’ involvement in the scandal, her booming Instagram and YouTube blogging business has taken a hit since the news broke. On Thursday, Sephora severed ties with the teen.
“She feels she has worked very hard to get different work deals and everything is just gone. She thought she knew what the future had in store for her, and it all just crumbled,” says the source. “It’s a never-ending nightmare for her. She understands the serious consequences her parents are facing and she is very scared.”
Olivia Jade’s older sister, Isabella Rose, 20, is also enrolled at USC, though her future with the school remains unclear. Neither of them was charged in the indictments.
Loughlin, 54, is among dozens charged in an alleged college admissions scam involving elite colleges and universities including Yale, Georgetown, the University of Southern California and Stanford.
Loughlin and her husband, fashion designer Mossimo Giannulli, allegedly paid $500,000 to make it appear that their daughter had been a rower, the indictment states. (Olivia Jade is not currently listed on the USC women’s rowing roster.)
Both Loughlin and Giannulli were both arrested this week on a felony charge of conspiracy to commit mail fraud and honest services mail fraud.
Giannulli appeared in federal court on Tuesday and was released after posting a $1 million bond. Loughlin made her first appearance in federal court on Wednesday in Los Angeles where a judge set her bond at $1 million, according to the Associated Press.
A source told PEOPLE that some of the pair’s friends have been distancing themselves from the couple in light of the news.
“Lori and Mossimo are finding out quickly who their real friends are,” the insider said. “It’s not like they are the victims of a crime. They are the crime.”
“Many of their friends don’t want to be associated with them right now,” the source added. “Their friends are shocked at the allegations.”
The pair accounts for two of 50 people indicted as part of the alleged nationwide scheme, which broke on Tuesday when federal court records were unsealed in Boston. Other notable names include Desperate Housewives star Felicity Huffman and author Jane Buckingham.
According to a release from the U.S. Attorney’s Office in Massachusetts, the widespread effort was made by wealthy families to get their children into top colleges by falsifying SAT scores, lying about their athletic skills, and more. It’s unclear if the children were aware of any of these alleged crimes.
Some named in the court documents allegedly paid bribes of up to $6 million to get their children into elite colleges, including Yale, Stanford, Georgetown, the University of Southern California, UCLA, the University of San Diego, University of Texas and Wake Forest, according to federal prosecutors.