We could tell you what we would do until we're blue in the face (and trust me, some will try

)...but the people that know your team best, and the best way to approach them, are the people on it.
This is a perfect example of how every team does things differently: though the points raised above can be grouped into a couple of major thoughts, I am sure that the end result will be a blend of thoughts that your adults feel comfortable with and you all feel is the best way to break the news to them in a way that won't kill their drive.
Remember, the resilience of a team is not measured in the greatness of their successes, but in how they react when pitfalls arise.
Good luck!
Man, I'm sounding preachy...writing final papers needs to end now! 
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jessicaboucher.com
FRC Alum, Mentor, Volunteer, lots of things.
Championship Volunteer of the Year, 2016
Advisor,
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