I have been teaching classes in our dojo for a little 5 years now the age is from 9 - 16 yrs .Half of this kids have leaning disabilities. I have another class is for adult. Yes working with kids is a challenge but I enjoy it . But my answer to the question Could a child fail a grading for me is yes.
I used color belt for grading. In order for kid to pass they have to know and understand the technique. Bullies is the problem in where I am at, and to overcome the fear in school practice what they learn in the dojo by apply it on me then from that confidence building up they can use it to help themselves outside. the older kids excuses is a big problem but my younger student enthusiasm, commitment, confidence moved the older kids to participate.
I think Belt is a decoration but the skills that each kids learn is more important . One of my student he is 10 yrs . Been training with me for over two years .I took what he learn from the dojo home and practice . In school too. He used to be bullied a lot ["most of the time physical"] .He used what he learn in the dojo and apply in school .The pushing and punching are no more .It seem they move to verbal. But this kids still hold on.
One of the things that I learn when kids trust you as the teacher they will share their problem with you . We sit in a group and discuss it.