People magazine is reporting this story. Readers can choose to decide whether or not they're reputable enough to be believed. However, I'd point out that People has been a consistent Kate fan, she's been on the cover several times with stories sympathetic to her on a number of subjects, and they've reported this story in a similar way.
Two of Kate and Jon Gosselin's Eight Children Expelled from School : People.com
If this story were not true, I can't believe the parents would not have put an end to the speculation as soon as the story appeared. I don't respect their parental choices, but I do believe they wouldn't allow this story to circulate if it weren't true.
As for whether or not this story belongs in this thread, the children's behavior has been part of the show as well as their being shown departing and arriving from school. I think this story does relate to the show.