Your daughter’s living situation has nothing to do with your commitment to her loan. While I sympathize with your anger and disappointment over her immoral choices, she is an adult and you should not attempt to control her through the money you’ve already promised her. (And, as you note, to do so would be counterproductive if she defaulted on the loan.)
There are two things you can do in regard to the loan: One, you can let her know that you expect her to commit to doing what is necessary to pay off her loan as quickly as possible. To string it out for “many years” is unfair to you and your wife. A financial advisor should be able to help both you and she to set up a rapid-repayment schedule that is within your respective means. And, two, don’t agree to provide any future financial assistance (e.g., paying for her wedding). While you may choose to give her a gift of money for some just reason (e.g., a wedding gift), at 27 she is old enough to be expected to be financially independent and should not rely on her parents to subsidize her life.
