Paint starting to peel above tile wall in shower

depends if the tile is over the sheetrock or it it has a backing board behind it.

if it has a backing board then its just a matter of removing and replacing the sheetrock and repainting.

if the tiles are stuck directly to the sheetrock then it is involving full blown removal and retiling the whole thing

If the barrier around your shower goes all the way up like it's supposed to it should't be a big deal to fix, but the problem you're having means water gets above where its tiled to, so you'll have to replace it again anyway.

While you're at it you might as well just tile it up to the ceiling.