What a natural thing it is to worry about the daughter you love. It certainly isn't uncommon for a kid to struggle during their first attempt at college, especially if they tend to be sensitive as you describe your daughter. I dropped out of college after my second semester for various reasons - the school wasn't a good fit for me, I needed to mature some, etc. I ended going back to different (smaller) school, flourished, and graduated with honors. I've had a long, successful career in health care. Your daughter's initial negative experiences with this school may be such that she might never feel comfortable there.

I don't have advice on what is best or whether your daughter can appeal the failed classes, just empathy for you and your daughter and the knowledge that the way to adulthood is frequently bumpy and unclear. Hugs to you both.