Translation:Her older sister is a high school student.
Japanese has a word for big brother/sister and a word for little brother/sister. But it does not have a word that just means "brother" or "sister". When you talk about a sibling, you must specify if they are older or younger than you, because seniority is very important from a cultural perspective. It has a big significant when determining social status and expectations. Interestingly, this even applies to twin siblings, since one of the twins is usually born before the other one.
When translating into or from English, this can create problems because we do not usually specify age of the sibling in English and it tends to sound a little odd when you say "older brother" or "younger sibling" without a good reason.
Fun Fact - The Japanese word for "sibling" 兄弟 (kyōdai) can mean "brothers" or "brothers and sisters" and it is written using the kanji for older brother and younger brother. The word for "sisters" is 姉妹 (shimai) and it is made using the kanji for older and younger sister.
Another fun fact - how you refer to your family members and other people's family members can be pretty complex in Japanese due to honorific and humble language. If you are talking about someone else's family, you would use honorific language お兄さん (onīsan) "(your) older brother". But if you are talking to someone else about your own brother, you would use humble language 兄 (ani) "(my) older brother". But if you are talking directly to your older brother, and you want to be polite, you could use honorific language to show respect ... or NOT use honorific language to show familiarity and closeness. Just depends on the kind of relationship you have with your sibling (and how far apart you are in age).
Various ways to say older brother depending on how formal/polite you want to be ... Ani, Oniisan, Oniisama, Oniichan, Niisan, Niichan, Aniki. O- is an honorific prefix and -san, -chan, -sama, and -ki are various honorific suffixes with slightly different levels of familiarity or respect. You will see this suffixes used frequently with people's names or titles.
Yes, it is not right. It does not follow the Japanese grammar.
高校生 means high school student and it is followed by the copula, です. So this sentence is literally saying that her sister IS a student, not that she is IN the school.
You could loosely translate the original sentence as "Her sister is in high school", meaning that she attends high school or is a student at a high school. But if you mean that she is physically located at the high school, it would be a different sentence entirely.
If you want to state the girl's location you would say this instead:
"Her sister is in the high school."