Felt is the easiest way to do pennants because the edges don't fray. You can just cut out letter shapes and either glue or sew them to the background colour. You can also do the same with the fabric that they use for flags but it is expensive. I think the name of it is Run Stop Nylon?
If she wants to do a banner than I would hem a long piece of cotton/poly broadcloth and do raw edge applique(just cut letters out of contrasting fabric and sew them on along the edge or use fabric glue) Since it would not get a lot of use it should hold well.