The ForEach scope in Mule allows iterating over collections of elements like lists, maps, and message properties to split and process each element individually. It is similar to the for-each loop in Java and handles "java-in, java-out" processing without needing to reaggregate messages like the scatter-gather approach. In the example, a JSON array of student data is converted to a Java object collection using a transformer before being passed to the ForEach scope to process each student separately.