<p>I had that situation with a friend back in my first year. She was diagnosed with bipolar and ended up leaving in middle of the semester to recover at home. She did end up transferring to a LAC near her so she could be close to her comforts (her family, her horse). It was a very, very complicated situation as it affected me too. I don't think she's ever, ever returned back to our first school because she encountered bad experiences with the students who hurt her emotionally (though I told her not to take the comments so personally but she was also a bit immature socially).</p>
<p>If your D faced difficult social situations at her LAC that she can't see herself making friends there again, it would be best for her to leave and start fresh at a new place. Sometimes they are a bit more scarring than you think, especially given her mental illness. </p>
<p>Since I am also a transfer student, I agree with other posters. Look at it as a positive outcome, as a chance to turn over a new leaf. Don't dwell on the negatives- even I didn't allow myself to be all negative about my first school. It makes the process easier (but also decision making harder!) and the adcoms are more likely to buy her argument of why she would be a great addition to their schools. Simply start over the process and find highlights. Also now that your D's finished her first year, she should have a clearer idea of what she wants to major in and that should also be a strong factor since departments are always looking to add new students, especially if she points out how she wants to be part of a strong department...</p>