I feel like i've failed her ?

Don't feel like you have failed as a caregiver. My cousin has Augsburg's syndrome (i know that this can not compare to epilepsy) and she had to repeat the fourth grade this year. It was because she would not do her work and acted out in school. Now she tries hard and is working towards not acting out as much. There will always be those mean kids out there that are going to call people names and hurt there feelings. But maybe your niece would try harder if you made her repeat the fifth grade. Also ask the teacher what you can do to help the child in school and with her work. Just hang in there and don't blame yourself.