An AI grading tool sees more about a student than almost any other app in your classroom. One uploaded essay can carry a name, a student ID, a reading level, an accommodation, and a personal story written for you alone. Multiply that by 150 students and a full school year, and a vendor holds a detailed record of who your students are.

Privacy vetting used to sit with the district IT office. AI tools changed that. Many are free, browser-based and one sign-up away, so the decision to upload student work now often happens at a teacher's desk on a Sunday night. Teachers are also the first people parents ask when something goes wrong.

You do not need a law degree to spot a risky tool. Three sets of rules do most of the work: FERPA, COPPA and your state's student-privacy law. A short list of questions will tell you whether a tool respects them. This article gives you both.

This is general information, not legal advice. Your district's privacy officer or counsel has the final word on any tool.

The three rules, in plain language

FERPA: the school stays in control of the data

FERPA protects personally identifiable information in students' education records at any school that receives federal education funding. Once a grading tool stores scores, feedback or work tied to a named student, it is very likely handling education records. The Department of Education's own guidance says whether a given online tool is covered "depends" on how it is used.

Schools can share those records with a vendor without parental consent under the "school official" exception. The vendor must meet four conditions:

It performs a service the school would otherwise do itself.
It has a legitimate educational interest in the records.
It is under the school's direct control for how the records are used and kept.
It uses the data only for authorized purposes and does not pass it on.

The third condition is where most AI tools stumble. FERPA does not strictly require a written contract, but without one a school usually cannot show direct control. A vendor that can use student data to train its own models is not under the school's direct control.

What this means for you: the exception belongs to your school, not to you. Clicking "I agree" on a free tool with your personal email is not how a district puts a vendor under its control.

COPPA: under-13s, and the rule just got stricter

COPPA covers online services that collect personal information from children under 13. The FTC published major amendments on April 22, 2025. They took effect June 23, 2025, and full compliance has been required since April 22, 2026.

The changes that matter most for grading tools:

A written retention policy. Vendors must state why they collect children's data, why they keep it, and when they delete it. That policy must sit inside the privacy notice; a link elsewhere is not enough.
No "for as long as necessary." Retention periods must be reasonable and specific. Children's data cannot be kept indefinitely.
A written security program that covers children's personal information.
Named third parties. Privacy notices must disclose who receives children's data and why.

Schools can still consent on parents' behalf, but only for tools used purely for education. That permission comes from FTC guidance, not the rule itself; the FTC dropped a proposal to write it into the 2025 amendments. Under the FTC's 2022 edtech policy statement, data collected this way may be used only to deliver the educational service.

The retention rule is not theoretical. In its case against Edmodo, the FTC alleged that keeping children's data indefinitely violated COPPA.

State law: often the strictest layer

California's SOPIPA, in force since 2016, set the template. It bars K-12 services from targeted advertising, building student profiles for non-school purposes, and selling student data. It also requires deletion when a school or district asks. Dozens of states have since passed their own versions. Connecticut, for example, requires a written contract with any vendor that touches student records or student-generated content.

Teaching outside the US? GDPR and UK GDPR play the same role, and the checklist below still applies.

The checklist: 16 questions before you upload student work

Work through these with the tool's privacy policy, terms of service and, ideally, your district's data privacy agreement (DPA) open side by side. A "no" or "can't tell" on any item is a reason to pause and ask your district's privacy contact.

Approval and control (FERPA)

Is the tool approved by my district or covered by a signed DPA? Many districts post signed agreements on the Student Data Privacy Consortium registry, which lets schools search agreements that already exist.
Am I signing in with my school account under a district licence, not a personal email and a free tier?
Do the terms say the school owns student data and directs its use and deletion? Watch for clauses letting the vendor delete or reuse data without the school's say.
Must the vendor notify or get approval from the school before changing its privacy terms? Unilateral changes undermine direct control.

Children under 13 (COPPA)

If any of my students are under 13, has the school formally authorized this tool? School consent covers educational use only.
Does the privacy notice name the third parties that receive student data, including the company whose AI model does the grading?
Is student data used only to deliver the grading service? No advertising, no profiling, no sale.

Data retention

Does the policy give a specific deletion timeframe, such as a set number of days after a course or contract ends? "As long as necessary" is a red flag.
Can my school delete a student's work and feedback on request, and get written confirmation?
What happens to the data when the contract ends or the company is sold? Look for return-or-destroy language.
Does the AI model provider keep copies of prompts and uploaded files? Ask whether the vendor has a zero-retention or short-retention arrangement with that provider, and for how many days.

AI training and model use

Does the vendor state in writing that student work is never used to train or improve AI models, theirs or their AI provider's?
Is that promise in the contract or DPA, not only on a marketing page or in a help-centre article?

Security and oversight

Is data encrypted in transit and at rest, and do I know which country it is stored in?
Will the vendor notify the school of a breach within a set number of days?
Do I review and approve every AI-suggested grade before a student sees it? The tool should support your judgement, not replace it.

Reading the fine print: red flags and green flags

Privacy policies rarely say "we misuse student data." The warning signs are vaguer phrases that leave room for uses you never agreed to. CDT's review of edtech policies found ambiguous wording, such as uses "compatible" with the service, to be one of the most common problems.

Red flag in the policy	What it can mean	Green flag to look for instead
"We retain data for as long as necessary"	No real deletion date; may conflict with COPPA's specific-period rule	"Student data is deleted within 30 days of contract end" or another fixed period
"We may use content to improve our services"	Student essays could train future AI models	"Customer content is never used to train or improve models"
"We may update this policy at any time"	Terms can change without the school's agreement	"We will notify the school and seek consent before material changes"
"We share data with trusted partners"	Unnamed recipients, unclear purposes	A named list of subprocessors, including the AI model provider
"For users 13 and older" on a classroom tool	Not built for younger students; no COPPA process	A clear school-authorization process for under-13 users
A consumer account with a separate "education" page	Consumer terms may still govern your upload	A district contract or DPA that overrides consumer terms
No mention of FERPA, COPPA or state law	The vendor may not see itself as serving schools	Named commitments, and a signed state or national DPA

A green flag in marketing copy is not the same as a green flag in a contract. If the commitment matters, ask for it in writing.

Six classroom habits that lower the risk

Even a well-vetted tool is only as safe as how it is used. School boards now have a name for the biggest gap: "shadow AI," meaning tools staff use without the district's knowledge or approval. The most immediate legal risk is protected student information typed or uploaded into those tools.

Start with what your district has approved. If the tool you want is not on the list, ask for a review rather than working around it. That request also tells your district what teachers actually need.
Use your school account every time. A personal login can put student work under consumer terms, outside any district agreement.
Strip identifiers before testing anything new. Remove names, student IDs, and any mention of accommodations, health or family circumstances. Remember that a personal essay can identify a student even without a name.
Keep sensitive records out entirely. IEP and 504 details, counselling notes and disciplinary records do not belong in a grading tool.
Keep a human in the loop. Review every AI-suggested score and comment before it reaches a student. You remain accountable for the grade.
Clean up at the end of each term. Delete uploads and archived classes you no longer need, and confirm the vendor has deleted them too.

Tell students and families which tools touch their work. A one-line note in your syllabus builds trust and makes questions easier to answer.

The bottom line

A safe AI grading tool can answer three questions in writing: who controls the data, how long it is kept, and whether it trains any model. If a vendor cannot answer them clearly, that silence is your answer.

AI grading can give teachers real hours back. Those hours are only worth it if students' work stays theirs. Run the checklist once per tool, keep the answers on file, and revisit them when the vendor's terms change.

Is Your AI Grading Tool Safe? A Teacher's Checklist for FERPA, COPPA, and Data Retention

Why this is now a teacher's question