United States: California Breaks New Ground In Education Privacy Law With K-12 Student Data Privacy Bill

A substantial rise in schools' use of online educational technology products has caused educators to become increasingly reliant on these products to develop their curricula, deliver materials to students in real time, and monitor students' progress and learning habits through the collection of data by third-party cloud computing service providers. Unfortunately, with these advances come the data security concerns that go hand-in-hand with cloud computing—such as data breaches, hacking, spyware, and the potential misappropriation or misuse of sensitive personal information. With the Family Educational Rights and Privacy Act (FERPA)—federal legislation enacted to safeguard the privacy of student data—in place for four decades, the education sector is ripe for new standards and guidance on how to protect students' personal information in the era of cloud computing. California has tackled this issue head on, with the passage of two education data privacy bills by its legislature on August 30, 2014. Senate Bill 1177 and Assembly Bill 1442 (together, the Student Online Personal Information Protection Act (SOPIPA)) create privacy standards for K-12 school districts that rely on third-parties to collect and analyze students' data, and require that student data managed by outside companies remain the property of those school districts and remain within school district control.California has long been an innovator in the realm of privacy law, having enacted the nation's first data breach notification law in 2003, and more recently, a 2013 law granting children and young adults the right to delete posted content from online services, mobile apps or other digital services for which they are registered users. The passage of SOPIPA is a significant milestone in education data privacy law reform. Acting as a measure to fill in FERPA's gaps, the bills place restrictions on companies that operate online sites, online applications, or provide web-based services to K-12 students.

Schools have always kept records of students to track their individual progress, as well as to create databases aggregating information such as test scores, attendance records and demographic data in order to meet benchmarks and develop curricula. Whereas teachers and school administrators previously aggregated student records themselves, it is now the norm for educators to outsource this task, as management of such databases can be more efficiently and systematically performed by privately-owned and operated education service providers, websites, and app makers. According to estimates provided by the Software and Information Industry Association, a U.S.-based software and information trade association, the market for education software for pre-K through 12th grade students was approximately $8 billion in the 2011-12 school year, up $500 million from only two years prior. One of the reasons for this increase is the fact that school districts often lack the technical expertise to create and manage these databases. The development of cloud-based computing and technology products that operate online has resulted in an increased number of third-party operators that collect and possess sensitive student data, including grades, disciplinary history, grades and demographic information.

The challenge with this practice is that third-party operators are not subject to the provisions of FERPA. Included among FERPA's requirements is a mandate for schools that receive federal funding to: (i) allow parents access to their children's files in order to request corrections; and (ii) obtain parents' consent before sharing such information. Enacted in 1974, FERPA is ill-equipped to adequately safeguard against 21st century education data security concerns. Under the law, "an educational agency or institution may disclose personally identifiable information from an education record only on the condition that the party to whom the information is disclosed will not disclose the information to any other party without the prior consent of the parent or eligible student." 34 CFR § 99.33(a)(1). Plainly stated, FERPA applies only to the schools themselves, not to third-party cloud computing or online service providers. If a school provides student data to such a service provider, the regulation allows the school to disclose that data to the provider without parental or student consent because a "contractor, consultant, volunteer or other party" to whom a school or school district has outsourced institutional functions "may be considered a school official" and thus, is shielded from liability, even if the Department of Education (DOE) alleges a FERPA violation against the school or school district. 34 CFR 99.31 § 99.31(a)(1)(i)(B)(1)-(3). Even more troubling is that only the DOE can sue a school for FERPA violations; parents and students have no cause of action under the law.

Why is this an issue? Currently, information provided to a school about a child's medical history, behavioral issues or academic performance—potentially damaging information—could be leaked, exposed by hackers, or more likely, sold to advertisers by the private companies hired by the schools themselves. In a December 2013 report entitled Privacy and Cloud Computing in Public Schools, Fordham Law School's Center on Law and Information Privacy surveyed twenty school districts across the country and uncovered the following:

  • 95% of the school districts surveyed rely on cloud computing for multiple functions, including monitoring student performance, providing support for classroom activities, data hosting and student guidance.
  • Only 25% of the school districts inform parents of their use of cloud services.
  • 20% of school districts do not have policies governing the use of their online services.
  • Only 25% of the contracts between the school districts and cloud service providers give schools the right to audit and inspect the service provider's practices with respect to the student data collected.
  • Fewer than 7% of the contracts between the school districts and cloud service providers restrict the sale or marketing of student information by vendors.
  • Only one contract required the cloud service provider to notify the school district in the event of a data security breach.

California's law, if signed by Governor Jerry Brown, would step in. Under SOPIPA, any operator of a company to whom student data is provided will be prohibited from using, sharing, disclosing, or compiling personal information about a K-12 student for any purpose other than the K-12 school purpose. When an operator is no longer using the information for a legitimate educational purpose, the student requests deletion, or the student ceases to be a student at the school or school district using the operator's services, the student's personal information must be deleted. Finally, SOPIPA creates a private right of action for parents or students alleging that an online service provider has violated the statute. Under the law, a SOPIPA violation would be an unlawful business practice, allowing individuals as well as government entities to seek judicial remedies.

While it is expected that Governor Brown will sign SOPIPA into law soon, the fate of education data privacy across the rest of the U.S. remains to be determined. Although data privacy is a perennial hot-button issue, the dialogue surrounding protection of personal data against its appropriation or misuse tends to focus not on education data privacy, but on the interactions between businesses and consumers, and the ways in which technological advances have made both groups vulnerable to data breaches, hackers, malware and the like. The tide may be turning, however. In February 2014, the DOE released guidance on FERPA compliance aimed at providing educators and parents alike with information on how to protect student privacy while using online educational services. While well intentioned, the DOE's guidance only went so far as to acknowledge that advances in technology have changed the way student data is used and "raises new questions" about privacy protection. In addition, as of April 2014, 83 bills concerning education data security were being considered in 32 states, according to the Data Quality Campaign, a nonpartisan educational advocacy organization. Perhaps most promising is the Protecting Student Privacy Act (PSPA), bipartisan legislation introduced in late July by Senators Edward J. Markey (D-MA) and Orrin Hatch (R-UT). The PSPA would amend FERPA to mandate the requisition of federal funding if a school district fails to put in place data security safeguards to protect and provide parents with greater access to sensitive student data held by third parties to whom educational functions are outsourced. In short, PSPA would apply rules to the data that schools share with outside parties similar to the constraints imposed by FERPA on schools themselves, echoing the California legislation. More than anything, these developments signal that educators and legislators must work together to strike a balance among student privacy, technological innovation and student data needs.

California Breaks New Ground In Education Privacy Law With K-12 Student Data Privacy Bill

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