We ended up using baking soda + little water, to make a paste, then scrub and scrub. We also have magic eraser. We only do this to the part with thickest crayon. If it isnt too bad, we just repainted. We may have to do another layer of paint tomorrow. We ended up repainting almost the whole house. The crayon was everywhere, bedroom, hallways, stairs, living room, carpet. The house had all kind of markings (pen, pencils, crayons, dirty hands,etc), stains, and 3 large holes.
We repainted the entire house 5 months ago before the tenant move in, new carpets, new flooring, etc, and I am surprised how nasty and dirty the house in 5 months. Its like the tenant does not have personal hygiene... yucks.... I have a 3 yr old, and he commented how dirty the walls are....
Yes, we are keeping her deposit because she broke her lease.
Really appreciate everyone's comments.