I would terminate. I have been in the same position when I serviced out of school clients which I don't do anymore. I have also had a client who left my daycare whose sister-in-law continued to come to my daycare after her sister-in-law left. I think people understand that circumstances change and these parents at the school have no idea, for the most part, what the situation was that led to the child not being at my daycare any longer. But the most important thing is your sanity so I wouldn't hesitate terminating if it is disrupting your life.