My girlfriend bullies this other girl in school what do I do?

[Snax]

I'm 16 and my girlfriend is 15 and she's a cute punk rock girl. We met each other in school and we've been dating for about 6 months. We've had sex more than once but with protection. Since I've known her she's been picking on this one other girl in school who I used to know. She's extremely mean to her for some reason, she spread a rumor about her that she was a lesbian to the entire school. And also constantly insults her online and in real life. She also occasionally physically pushes her around if her friends are there. I really hate that stuff, but I didn't really know what to do about it. About a week ago though, my girlfriend and some guy took her iPod touch out of her hand and won't give it back. I tried to talk to her about it. I asked her where it was and if she gave it back, and told her that I thought she should because that's really mean. She said she was gonna give it back when she felt like it which was soon, but her and her friends just keep mocking this poor girl about it every day. Adding to this, I'm also noticing her flirting with other guys. She even does it right in front of me. I'm really starting to hate her. I can't even kiss her anymore because I can't stand the thought of her getting any pleasure. I want to break up with her but I lent her some money earlier in the year that she hasn't paid back to me yet. She said she almost has it all and I really need to get it back. What do I do? I think I can pretend to love her for a little while but eventually I'm gonna get really mad at her and then I don't think she'll pay me back. Thanks.