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Diane introduces Lloyd to the retirement home residents and he teaches her to drive her [[manual transmission]] [[Ford Tempo]] graduation gift. They grow closer and have sex, to her father's concern. Lloyd's musician best friend Corey, who has never gotten over her cheating ex-boyfriend, Joe, warns him to take care of Diane.
Jim urges Diane to break up with Lloyd, feeling he is not an appropriate match, and suggests she give him a pen as a parting gift. Worried about her father, Diane tells Lloyd she wants to stop seeing him and concentrate on her studies, giving him the pen. Devastated, he seeks advice from Corey, who tells him to "be a man" because it takes more to be a "man" rather than just being a "guy". Meanwhile, Jim discovers his credit cards are declined as the investigation drags on.
On a [[boombox]] at dawn, Lloyd stands under her open bedroom window and plays "[[In Your Eyes (Peter Gabriel song)|In Your Eyes]]" by [[Peter Gabriel]], which played when they had sex. The next day, Diane meets with the IRS investigator, who says they have evidence incriminating Jim with [[embezzlement|embezzling]] funds from his retirement home residents. He suggests she accept the fellowship as matters with her father will worsen.
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