Lori Loughlin and Husband's Friends 'Shocked' at College Cheating Allegations, Distancing Themselves From Couple

Actress Lori Loughlin and her husband, Mossimo Giannulli, were indicted this week as part of a nationwide college entrance scam, with authorities alleging that the pair paid $500,000 to have their two daughters designated as athletic recruits to the University of Southern California's crew team despite the fact that neither of them participated in the sport.

Both Loughlin and Giannulli were arrested and later released on bond, and the indictment alleges that the pair "agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC crew team — despite the fact that they did not participate in crew — thereby facilitating their admission to USC."

In the wake of the scandal, a source told PEOPLE that many of the couple's friends have been distancing themselves.

"Lori and Mossimo are finding out quickly who their real friends are," the source said. "It's not like they are the victims of a crime. They are the crime."

"Many of their friends don't want to be associated with them right now," insider added. "Their friends are shocked at the allegations."

A second source added that many people who know the couple were surprised to learn of the allegations.

"This issue is shocking and greatly saddens many people," the insider said. "I've heard she is devastated, and the whole family wants to hide from the world."

"When you talked about Lori, it was like 'Wow, the amazing Lori,'" they added. " It is hard to get a grasp on what has happened."

Along with personal consequences, Loughlin has suffered a number of professional repercussions as she was dropped by the Hallmark Channel and reportedly from Netflix on Wednesday.

Loughlin and Giannulli share two daughters, Isabella and Olivia, and PEOPLE's first source said that the couple has always pushed their children to do well in school, despite the girls' indifference.

"Olivia and Isabella's personalities were always very different from their parents. They are average students. They have never been obsessed with school and didn't seem to care that much," the source said. "They attended school because their parents made them. Their focus was never about getting straight As. It was always clear that it was the parents that pushed them to go to school. Olivia always talks about her vlog. This is her passion. She never really understood why she needs to go to school."

Olivia is an influencer with 1.9 million subscribers on YouTube and 1.4 million followers on Instagram, though she has also lost multiple sponsorship deals in the wake of the scandal, including partnerships with Sephora and TRESemmé.

"They love to talk about how amazing their daughters are," the source added of Loughlin and Giannulli. "They are very competitive parents and they like to show off."

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TMZ reports that Olivia and Isabella are planning to drop out of USC following the scandal, with a source saying the family is worried that should they return, the two would be "viciously bullied."

Photo Credit: Getty / Donato Sardella