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'Full House' actress Lori Loughlin's kids remain enrolled in USC amid college bribe scandal; Phil Mickelson, Joe Montana say they did nothing wrong

Key Points
  • The two daughters of "Full House" star Lori Loughlin and her fashion designer husband Mossimo Giannulli remain enrolled at the University of Southern California as their parents face criminal charges of participating in a bribery scheme to get their daughters into the school.
  • Former NFL star Joe Montana and golfer Phil Mickelson said they dealt with the admitted mastermind of the college admissions fraud scheme, William "Rick" Singer, but also said there was no fraud involved in his work for them.
  • The Hallmark Channel has fired Loughlin.
Lori Loughlin is seen on December 31, 2018 in Los Angeles, California.
SMXRF | Star Max | GC Images

The two daughters of "Full House" star Lori Loughlin and her fashion designer husband, Mossimo Giannulli, remain enrolled at the University of Southern California as their parents face criminal charges of participating in a bribery scheme to get their daughters into the school.

A USC spokesman told CNBC on Friday that "both Olivia Giannulli and Isabella Giannulli still are enrolled" there.

But the spokesman also said, "USC is conducting a case-by-case review for current students and graduates that may be connected to the scheme alleged by the government and will make informed decisions as those reviews are completed."

TMZ earlier reported that the two daughters were dropping out of USC because they fear they will be "viciously bullied" if they return to the college, which is currently on spring break.

College admissions scandal casts a spotlight on the college consultant industry

USC also on Friday provided CNBC with a letter to the college community outlining its response to the scandal. On Tuesday, the school said it fired water polo coach Jovan Vavic and senior associate athletic director Donna Heinel, who both have been criminally charged in the case.

The university, in its letter, said it has opened its own investigation into the issue while continuing to cooperate with federal prosecutors and "began the process of identifying donations that may have been received in connection with the alleged scheme."

"We will determine how best to redirect those funds for scholarships benefiting underserved student applicants," USC said. The university said it also will "deny admission to applicants in the current admissions cycle who are connected to the alleged scheme" and that it has "initiated a case-by-case review of current students and graduates who may be connected to the alleged scheme."

"We also placed on leave Dentistry faculty member Homa H. Zadeh, who was named in the federal indictment as a parent," the letter said. "This leave is a required procedural step in the process for terminating tenured faculty."

Four dozen people, including Loughlin, Giannulli and "Desperate Housewives" star Felicity Huffman, were charged in the alleged scheme, in which wealthy people worked with a crooked college admissions advisor to bribe and cheat their kids' way into top-ranked universities.

The fallout continues for those implicated in the college admissions scam

Loughlin and Giannulli, who are accused of paying $500,000 to get their daughters into USC, allegedly had the girls pose as potential members of the crew team, when neither girl rowed.

Olivia Giannulli was aboard a yacht owned by USC board of trustees member Rick Caruso in the Bahamas on Tuesday when federal prosecutors revealed the charges.

On Thursday, The Hallmark Channel fired Loughlin from its dramatic show "When Calls the Heart" because of the scandal. The beauty products companies Sephora and Tresemme likewise have severed ties with Olivia Giannulli, who is a social media celebrity known professionally as Olivia Jade.

Loughlin's lawyers did not immediately respond to a request for comment from CNBC.

Actress Lori Loughlin (C) and her daughters Isabella Rose (L) and Olivia Jade Giannulli (R) attend the Hallmark Channel And Hallmark Movies And Mysteries 2017 Summer TCA Tour at on July 27, 2017 in Beverly Hills, California.
Paul Archuleta | FilmMagic | Getty Images

On Tuesday, the scheme's mastermind, William "Rick" Singer, pleaded guilty to federal charges. Singer, founder and CEO of the Edge College & Career Network, had cooperated with investigators in the probe.

Other parents who have been charged include PIMCO CEO Douglas Hodge, now-former Hercules Capital CEO Manuel Henriquez, top lawyer Gordon Caplan and investment fund CEO Bill McGlashan.

On Thursday, former San Francisco 49ers superstar quarterback Joe Montana revealed on Twitter that his family had used Singer's company — but said no fraud was involved in their relationship.


Professional golfer Phil Mickelson issued a similar statement.


It is not clear how many families with whom Singer had worked paid him for legitimate college consulting services.

But on a phone conversation recorded by the FBI, Singer said that he helps "the wealthiest families in the U.S. get their kids into school" and that he had helped with 761 so-called "side-door" admissions for parents. In those cases, he said, parents wanted a guaranteed admission to a certain school for their progeny as opposed to hoping for the student being admitted based on their grades and legitimate test scores or by virtue of a large financial donation to the school.

The cost to parents ranged from $200,000 to more than $1 million.

The scandal has cast a spotlight on one of the fastest-growing industries in education: college consultants. There are now about 8,000 private educational consultants in the U.S., up from 2,500 five years ago, according to the Independent Educational Consultants Association.

College consultants say Singer was a bad actor in an otherwise important industry that helps guide students in their college process.

Demand is soaring, for kids of younger and younger ages.

"Every other day I have a 2nd-grader or a 3rd-grader family calling me asking what can we do as a 2nd grader to help with the college admissions process," said Christopher Rim, founder and chairman of Command Education, a college-admissions consulting firm.

"I say there's nothing we can do," Rim said. "The only thing for you to do is let your child do what he wants to do. If he's interested in arts, ceramics, painting, music, let your child explore those passions or talents and then take it from there."

Many advisors charge around $15,000 a year, with others charging by the hour — some charge more than $1,000 per hour. The most expensive programs can run to hundreds of thousands of dollars, consultants say.

Some estimates say that college consultants are used by as much as 25 percent of students enrolled at private colleges.

Advisors say their focus is helping kids figure out what they want in a school, steering them to the best fit and giving them a roadmap to get there.

The bull market for consultants is expected to continue, because college acceptance rates are continuing to shrink and because the criteria for getting into top schools remains opaque.

The acceptance rate for Stanford University, one of the schools Singer has admitted victimizing in his scam, was 20 percent in 1994. Stanford's acceptance rate is now below 5 percent.