Hi Patches,
This sounds like a fairly tough consequence for a 5th grader who turns in their paper late. However, student should learn that although each teacher may have different rules those rules need to be taken seriously. Once your daughter hits high school/college the demands on her will increase, but the consequences may not be so obvious - until she receives a failing grade. I think that as a parent you should help your child become more organized in terms of homework assignments (does she have a planner?) and more methodical about making sure she has everything she needs in the morning (maybe institute a morning homework check to make sure she's got all her folders, etc. in her backpack?).
As for the psychological side of it, I think that you should reassure your child that she is a good student and that everyone makes mistakes. The important thing is to help her fix the homework problem in a constructive way, I think.
Hope this helps!

I'm a student so it may be difficult for me to answer this objectively but I think if anything, my answer works against the more probable bias. I think it is fair for students to be penalized for late work. Your daughter is likely a good student and it probably feels like there's a sudden discrepancy between her grades and her ability.

First, you say that 'we' are having academic problems. Do you mean your daughter is stressed or are YOU stressed about her grades? Or both? Either way, NEITHER of you should feel any anxiety about grades at this stage, if anything, I would think a 11 or 12 year old would be more worried about missing the lunch or recess. It sort of sounds like to either you or your daughter that a small grade penalty is the ultimate punishment for a child. The simple truth is, in terms of your professional future, the grades you make from kindergarten to eighth grade have no value (unless you take advanced courses that have highschool credits). No college takes them into account. What DOES matter is the habits and work ethic you learn in these years. If your daughter is academically motivated, if she sees from an early age procrastinating or a lack of organization leads to a bad grade, that will undoubtedly motivate her to change those habits.You may think that for children, they're more likely to do things if offered a reward and be hindered if penalized but for grades, penalties speak louder than rewards. Especially when the rewards are stickers or something. The 10% isn't to 'punish' the child, but to encourage her to stay on track.

I'm a senior in highschool and I really wish i learned good work habits earlier, instead of learning the hard way. It's wonderful that your daughter is involved in an environment that will adequately prepare her for her future.

also, *undue