Lack of challenge is probably a part of why she's disinterested in schoolwork and prone to laziness, because she isn't regularly being confronted with situations where she actually has to stop and think. I also suspect that part of the problem is she's 7, and in 3rd grade, because early education doesn't involve much thinking at all... it's mostly memorizing facts, and spitting them out later.
Another possible factor is something we discovered in our DD8, who we started homeschooling this year. In confronting our own DD's tendency to skip test questions, to guess wrongly when she knew the right answers, or when the answer was right in front of her, we found out that her public school teachers were basically incentivizing laziness by bribing the kids with extra recess if they finished tests early. Quality quickly took a back seat to speed.
