According to that Mandy woman, one of the girls from that bathtub night is doing quite well on Fox News, one was institutionalized, and one committed suicide. Doesn't it make sense that Grace's mom was the one who committed suicide?
Or, possibly she was killed? After Wes showed the movie to the class, he got quite passionate about how people shouldn't be judged for the mistakes they made as children. Maybe his wife was killed because of her involvement that night. Obviously the bathtub baby wouldn't be the Red Devil (she would have only been like 4 at the time).
Even crazier, what if Wes was the dad of the bathtub maybe. Maybe he had a casual relationship with the bathtub girl, but Grace's mom stole him away. He clearly has some relation to that night. I'm pretty sure he made the mix tape for the party. If he was dating Grace's mom at the time and he knew that was her jam, he would have included it. Maybe after years of feeling guilt, she told him about what happened that night. Maybe he realized that he was the father and freaked out and killed his wife. I'm going to guess that the fire was a cover up to hide the fact that either he (or someone else) killed his wife or that she committed suicide.
On a final note, Grace's mom was totally the main bitch of the sorority house. That is why Wed didn't want her to join the sorority and follow in her mom's footsteps.