The Collaborative International Dictionary of English v.0.48:

Flunk \Flunk\ (fl[u^][ng]k), v. i. [imp. & p. p. Flunked
   (fl[u^][ng]kt); p. pr. & vb. n. Flunking.] [Cf. Funk.]
   To fail, as on a lesson; to back out, as from an undertaking,
   through fear.
   [1913 Webster]