Collies and Collie mixes can have high prey or herding drive. Many do think of hyper little kids as sheep, and will nip at them, which is the reason so many end up in shelters. On the other hand, many Collie mixes can be great with kids. Have the kids meet the dog at least once before adopting any dog, if the Collie shows herding instinct, or is fearful or stressed around the kids, that might not work out.

Also, remind your sister that a small mixed breed puppy can grow to be a very big adult dog. adult/young adults are usually the best way to go because you can predict growth and temperament.

good luck