The school is known in wealthy circles as “Dumb White Kids Getting High Together,” but Hilton actually managed to flunk out.
“To flunk out” is a vulgar expression for to retire through fear; the most that can be tolerated is, to sneak out.
"And if you don't want to flunk out you'd better be off to bed at once," Martin told him.
1823, American English college slang, original meaning "to back out, give up, fail," traditionally said to be an alteration of British university slang funk "to be frightened, shrink from" (see funk (n.1)). Related: Flunked; flunking.
: I've got three passes and two flunks
[1823+ College; origin unknown; perhaps a blend of fail with funk, perhaps echoic of a dull collapse]