I agree with Muhammad Ali here. You need to trust your sister first. If her values are strong, she wouldn't indulge in anything wrong no matter what kinds of people she come acrosses in life. So her initial years of grooming are very important. Instead of being some authoritarian figure, be her guardian, supporter and a friend. Develop such a relation that she is able to share everything with you. In this way, you can always guide her along the way. Plus I think you should read a book on how to raise a child/ teenager. Also, I am sure she would have the support of some khala/ phuppo so you need not to worry.

Now having said this, your sister should definitely attend a school so that she can explore her own talents and develop her personality in a better/ healthier way. That would certainly be a wise decision.

P.s: It's good to know that you are a liberal and support women's education.
Btw, did you know Hazrat Ayesha(R.A) had more knowledge( not only in religion but also in medicine and politics) than any of the other companions of the Holy Prophet(saw)?!

Have a good day!