"She is breaking down," the source tells ET. "She truly feels at her very worst. People are coming out in support of her lately but she is afraid to open up. She's concerned if she talks to the wrong people that her opinions will get out and somehow affect the case."
According to the source, her daughters -- 20-year-old Olivia Jade and 21-year-old Isabella Rose -- are also getting increasingly worried about her. Loughlin and Giannulli are accused of paying $500,000 in bribes to get their daughters admitted to USC as recruits for the crew team, even though neither had ever participated in the sport. In April, the couple submitted not guilty pleas, and Olivia and Bella are now no longer enrolled at USC.
"They are trying to help her process but it’s been really hard," the source says of Loughlin's daughters. "The girls feel guilty because they realize she was only trying to help their future. They know their mother is a good person, and don't want her to suffer in any way."
"Lori has always been an upstanding citizen, a loving mother and a gracious, wonderful friend," the source continues. "Those closest to her are devastated because she has been a good person to them and know she could be facing jail time because of very poor judgement. Her friends are supporting her and keep reminding her if she does time behind bars she will get through this."