。
She had a reputation as a beauty at school.
Literal
She [topic-は] school [at-では] beautiful-person [as-で] reputation was.
学校では stacks the location-marker で with contrastive は: 'at school [in particular],' singling out the school context against other places where she might not have had this reputation. 美人で評判 uses the te-form of だ (i.e. で) to attach the descriptor 'as a beauty' to 評判 ('reputation') — 'reputed as a beauty.' This で-as-attribute pattern is one of the slightly less obvious uses of で: it marks the basis or characterization of the reputation, not a location. 美人 ('beauty, beautiful person') is gendered toward women in Japanese — the male equivalent is typically イケメン (slangy 'good-looking guy') or 美男子 (more literary).