milena,
these types of rumors go on everywhere (at least, everywhere i have ever been). there is either truth to what they say or, it can even originate from other teachers who do not like the victim of the rumors (or, anything in between).
whether it is a rumor or not, you have to decide for yourself whether or not the teacher is doing you any good. if she is, then stay with her until you find something better.
if, by chance, the observations by your housemates are in earnest, you have to consider what they say. look at whether or not these students have improved in ways that you have not. if they have, ask them what was the difference they made to make the improvements (if they don't know, it probably just came from practicing more rather than anything earth shattering their teacher told them).
you are in the world of people training to be professionals where there are not enough jobs available for those who want them so, it is bound to be a little 'cutthroat'.
mike
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