Agian, lots of good posts and good information. I never finished my instructor rating (got married). However, during my training I taught alot of supervised classes and did alot of helping in the pool for other instructors. In fact, i'm helping out right now for my wife's and daughter's class.
Of all the students I've worked with during those years, there was only one that dropped out (we didn't flunk her and notice I didn't separate kids and adults, yet). She found that she was severely closterfobic and couldn't handle the confined feeling. Otherwise, we had several students (adults and teenagers) that didn't finish with their class. We never let anyone out to OW without passing their confined water skills for their own safety. Most were able to relax enough without the stress of "finishing on time" to get things squared away within two to three more pool sessions with the next class.
I learned that patience and observation is most of what it took to get students past their problems. Some take to SCUBA like fish to water (pardon the pun) and others like a cat being thrown in the pool. If they really wanted to do it, we took the extra time to help them overcome their fears and insure they were safe to themselves and their future buddies.
As for teens. We also spoke with parents and informed them of the expectations. This was a paid class. They would have to conduct themselves accordingly and would be held to the same standards as everyone else. We didn't treat them any different, however, we did expect a level of maturity that would make them safe divers. As was mentioned in other posts, we've had adults that were less mature than younger teens. Anyway, we always preferred older teens, and my own daughter didn't start her cert until she was nearly 16.
Flunk them? No, those are usually the people that really want the cert and just need the extra help and attention. Kids? We're all kids at heart, its just a question of whether or not they are mature enough to be safe divers for their own safety.