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I don't know the trope for this, but when I saw this movie-admittedly a long time ago-my disbelief lost suspension when the teacher in an American public school rejects a paper purely on content; this is explicitly forbidden by most school district policies and/or case law as a violation of students' First Amendment rights.
As a general rule, teachers can do whatever the hell they want to do if nobody complains loud enough. The fact that the paper was glorifying hitler, and that the teacher was black, the student was a Neo-Nazi, and the only people who would complain would be his Neo-Nazi friends, means that yeah, he could get away with it.
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