Let's run through this in a completely rational, logical, and Dr. House-like way
Option 1: You love her too. Tell her so! I would guess that this probably isn't the case or you would have said this back to her after she admitted her feelings to you, letting her guard down, instead of asking for advice from people who don't know either of you. What DID you say after she told you this? If she has already said this (and she has), and you love her back, you don't even have to worry about the awkwardness that SHE is feeling by wondering whether or not the 2nd person feels the same way. If you loved and still love her, it's a Nash Equilibrium- You're best off telling her anyway, now with the added benefit of KNOWING that she loves you too. No fear of rejection. Yes, my economics midterm is tomorrow, and that's where Nash Equilibrium comes from
Option 2: You don't love her. Tell her now, since there's little benefit in keeping that a secret unless she's hot and you're shallow like that or you have some other reason for needing to be seen with her/as a couple. If you don't tell her early, it'll be worse when she becomes worried about your answer and even worse when she learns that it's a no and that it was a no the entire time but you didn't tell her. Either way, respond early. If you don't feel comfortable loving her back or she's just moving too fast emotionally, end it. Play to win! If you don't love her, tell her and move on. It'll be worse the longer you wait. Sounds generic, but its true.
Option 3- the awkward one: You're somewhere in the middle, maybe still in the friend/good friend range. I don't know how the relationship was before the "I love you" came, as in whether this was a secret crush thing or a good-friends-becoming-a-couple-thing. If you're honestly not sure if you can make the jump, which should feel natural if you are (option 1) but you don't want to completely reject her (option 2), consider the option of asking her to take it more slowly. Again, this depends on if you were already really close or not. If you two are moving at different speeds and can't find a common ground, fall back on option 2.
Option 4: You point her out to me in school, we creep on her from afar, and I'll decide if you love her or not.