Unfortunately, this is usually what happens when you fail a resit. The resit is the last chance to accrue enough credits to proceed to the next level in the next academic year. When a resit is failed (and there are no extentuating circumstances to mitigate against this), universities have a limited number of things they can do and it depends on the academic regulations of this particular uni what the options are. This is because "concurrent study", i.e. taking modules from different levels at the same time, is rarely if ever permitted. In this instance, it sounds like they are offering a repeat year with attendance (which means tuition fees will be charged) with the exception of module already passed (one thing to check is that she won't be required to pay for the module completed and passed).