Lori Loughlin 'remorseful' over college admissions scandal but doesn't think she broke the law: report

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College admissions scandal: Lawyers for Lori Loughlin and others due in court

Prosecutors say actress Lori Loughlin and her fashion designer husband paid half a million dollars to fake their two daughters way into USC, but the celebrity couple is fighting back; Rick Leventhal reports.

Lori Loughlin regrets her alleged participation in the college admissions scandal, but that doesn't mean she thinks she actually did anything wrong.

A source told People in an article released Wednesday, “Lori is remorseful, and she has definite regrets. She’s embarrassed and hurt, and she knows that her reputation has been ruined for life. But she also believes the allegations against her aren’t true.”

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Loughlin, 55, and husband  Mossimo Giannulli were accused of paying $500,000 to admissions scam mastermind William "Rick" Singer to get daughters Olivia Jade and Isabella recruited onto the USC crew team despite neither girl being a coxswain. The girls' statuses at the college were put on hold amid an internal investigation into the admissions scam.

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The pair rejected the plea deal that other parents allegedly involved in the case — including Felicity Huffman — accepted, reportedly because it included jail time. “They weren’t ready to accept that,” a source told People.

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Giannulli, 56, and Loughlin were slapped with additional charges of money laundering and conspiracy. They each face up to 40 years behind bars if convicted of all counts.

A source added of the fired Hallmark star, “She honestly didn’t think what she was doing was any different than donating money for a library or athletic field. That’s the crux of why she pleaded not guilty.”

While the troubled couple rejected a possibility of prison time, the insider claims that they may be reconsidering now that their trial looms.

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“Lori is ready for this to be over. They all are," the source said. "At this point, it would be better to spend a few months in jail — because she’s been spending the last several months in her own prison.”