I doubt her hair is really the issue. Kids are cruel. If you straightened her hair, they'd just find something else to tease her about now that they know it gets to her. If you think it's out of hand you should talk to her teacher.
Tell her it doesn't stop when you become a grownup. I've heard people criticize on of my coworker's hair for being too straight and flat. People are always going to talk. You can't control them, only how you react to it.