'RHOBH' Star Kyle Richards Reacts to Friend Lori Loughlin's College Admissions Scandal Arrest

Kyle Richards did not see Lori Loughlin's involvement in the college admissions cheating scandal coming.

The Real Housewives of Beverly Hills star, whose daughter Sophia recently started college at George Washington University, spoke out about the news during an appearance on Tuesday's episode of Watch What Happens Live with Andy Cohen After Show.

After a caller asked the reality TV personality about her thoughts on the controversy, she admitted to knowing many of the families involved but still found the whole situation shocking, as first reported by Entertainment Tonight.

"We know a lot of people in that circle, and it was really shocking," Richards said. "Sophia knows all of those girls."

Richards also talked about her friendship with the Fuller House star, who was arrested Wednesday and later released on a $1 million bond for her involvement in the scandal.

"They're really great people, and you kind of just go, 'I'm really so confused by all of this,'" Richards confessed. "Everyone's talking about it, but until today, we had never heard this ever existed. Maybe I'm naïve, I didn't even know that existed."

News first broke of the scandal when court records revealed Loughlin, and Desperate Housewives star Felicity Huffman, were two of about 50 parents who allegedly paid large bribes to get their children into top universities across the country, including the University of Southern California, Georgetown, Yale and Stanford.

Loughlin and her husband, fashion designer Mossimo Giannulli, allegedly paid $500,000 to have their two daughters — Isabella and Olivia Jade — named recruits for the USC rowing team, despite them never actually participating in the show.

Since then, reports surfaced that Loughlin's daughters have dropped out of USC, as the college had announced it would be looking into the students involved in the scandal to determine whether they would stay enrolled.

Hallmark Channel also announced Thursday they were cutting ties with Loughlin, and putting all of her current projects with the network on hold following the scandal.

"We are saddened by the recent news surrounding the college admissions allegations," the Hallmark parent company said in a statement Thursday. "We are no longer working with Lori Loughlin and have stopped development of all productions that air on the Crown Media Family Network channels involving Lori Loughlin including Garage Sale Mysteries, an independent third party production."

Loughlin is set to face other charges in a Boston court in late March. Should they be found guilty of the charges, Loughlin, Giannulli and Huffman could face time behind bars.