Thanks all, I thought that if it's hair, it should grow back. Funny thing, today I asked my trainer about it (she hadn't seen it yet) and she said, "It's hair, hair grows." Gee, where did I read that?
Anyway, I ended up trimming it, well my trainer did, to about 3 inches. We'll let it grow back.
So here's the great news: My horse is broke! My trainer cantered on her today and she did fine. She'd had three months of training with another trainer and the previous owner was told the horse wasn't learning. So the lady returned her to the breeder. I was told she would need to be started and broke. After two weeks of training, it's clear she's broke. I've been walking and trotting on her. Yay!