College officials always expect a certain amount of “summer melt." That's the term they use for students who submit their intention to enroll but then change their minds in June, July, or August. Your daughter should notify her university promptly if she is definitely not attending, but she should to get the commitment from the second school in writing before proceeding with the withdrawal. If you are expecting financial aid and/or housing from the second school, you need to get those commitments in writing, too (email is fine), before she cuts her ties with the first college.
When your daughter notifies this first college that she won't be enrolling, she should be careful not to burn bridges, just in case she changes her mind yet again in a year or more. She should apologize for her 11th-hour decision and explain that her experience at the orientation made her feel like she'd made the wrong choice. If she can provide more specific information (e.g., the college felt too large or not diverse enough), it would be helpful to admission officials to know why she's bowing out.
Don't expect to get back any deposits you've paid although it can't hurt to ask. Some schools will allow returns on housing deposits before a certain date, so you might get lucky if you've paid for housing but the bail-out deadline hasn't passed yet.
And your daughter—or you—shouldn't feel guilty about the change of heart. She needs to do what seems right for her, and now some other student, who would love to grab your daughter's spot at the college's she's abandoning, may soon receive good news. :-)
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