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Embattled education technology vendor Illuminate Education has become the first-ever company to get booted from the Student Privacy Pledge, an unprecedented move that follows a massive data breach affecting millions of students and allegations the company misrepresented its security safeguards.

The Future of Privacy Forum, which created the self-regulatory effort nearly a decade ago to promote ethical student data practices by education technology companies, announced on Monday it had stripped Illuminate of its pledge signatory designation and referred the company to the Federal Trade Commission and state attorneys general in New York and California, where the biggest breaches occurred, to “consider further appropriate action,” including sanctions.

“Publicly available information appears to confirm that Illuminate Education did not encrypt all student information while” it was being stored or transferred from one system to another, forum CEO Jules Polonetsky said in a statement. He said the decision to de-list Illuminate came after a review including “direct outreach” to the company, which “would not state” that such privacy practices had been in place.

“Such a failure to encrypt would violate several pledge provisions,” Polonetsky said, including a commitment to “maintain a comprehensive security program” to protect students’ sensitive information and to “comply with applicable laws,” including an “explicit data encryption requirement” in New York.

Encryption is the cybersecurity practice of scrambling readable data into an unusable format to prevent bad actors from understanding it without a key. Illuminate reportedly used Amazon Web Services to store student data on accounts that were easy to identify.

Through the voluntary pledge, hundreds of education technology companies have agreed to a slate of safety measures to protect students’ online privacy. Though the privacy forum maintains that the pledge is legally binding and can be enforced by federal and state regulators, the move against Illuminate marks a dramatic shift in enforcement. The extent of the Illuminate breach remains unclear, but a tally by education news outlet THE Journal encompasses districts in six states affecting an estimated 3 million students.

Illuminate Education spokesperson Jane Snyder said the company is disappointed in the privacy forum’s decision, but it “will not detract from our commitment to safeguard the privacy of all student data in our care.” The privately held company founded in 2009 claims some 5,000 schools serving 17 million students use its tools.

“We will continue to monitor and enhance the security of our systems, and we will continue to work with students and school districts to resolve any concerns related to this matter while prioritizing the privacy and protection of the data we maintain,” Snyder said in a statement.

In a recent article in The 74, student privacy experts criticized the Big Tech-funded privacy forum for failing to sanction companies that break the agreement terms.

The action taken against Illuminate comes just three months after the Federal Trade Commission announced efforts to ramp up enforcement of federal student privacy protections, including against companies that sell student data for targeted advertising and that lack reasonable systems “to maintain the confidentiality, security and integrity of children’s personal information.”

The privacy forum maintains that the Federal Trade Commission and state attorneys general can hold companies accountable to their pledge commitments via consumer protection rules that prohibit unfair and deceptive business practices, but such action has never been taken. Education companies have long used the pledge as a marketing tool and the privacy forum has touted it as an assurance to schools as they shop for new technology.

Signs of a data breach at California-based Illuminate first emerged in January when several of its popular digital tools, including programs used in New York City to track students’ grades and attendance, went dark. City officials announced in March that the personal data of some 820,000 current and former students had been compromised. Outside New York City, home to America’s largest school district, state officials said the breach affected an additional 174,000 students across the state. Student information in Los Angeles, the country’s second-largest school district, was also breached.

Compromised data includes information about students’ eligibility for special education services and free or reduced-price lunch, their names, demographic information, immigration status and disciplinary records.

New York City officials have accused Illuminate of misrepresenting its security safeguards and instructed educators to stop using its tools. New York State Education Department officials are investigating whether the company’s security practices run afoul of state law, which requires education vendors to maintain “reasonable” data security safeguards and to notify schools about data breaches “in the most expedient way possible and without unreasonable delay.”

School districts in California, Colorado, Connecticut, Oklahoma and Washington have since disclosed to some 3 million current and former students that their personal information was compromised in the breach. Illuminate Education has never said how many people were affected by the lapse while at the same time maintaining that it has “no evidence that any information was subject to actual or attempted misuse.”

“FPF believes that the privacy and security of students’ information is essential,” Polonetsky said in the statement, declining to comment further. “To help ed tech companies better protect student data, we will be providing training for Pledge signatories, with a specific focus on data governance and security.”

For years, critics have accused the pledge of providing educators and parents with a false affirmation about the safety of education technology while being a tech-funded effort to thwart meaningful government regulation.

The privacy forum’s decision to yank Illuminate doesn’t suggest stronger pledge enforcement going forward, said Doug Levin, the national director of The K12 Security Information eXchange. Rather, he accused the privacy forum of acting more in response to media coverage than a desire to hold companies to their promises.

“The only time that the Future of Privacy Forum has considered de-listing an organization is when the practices of a company have come under the attention of national media,” he said, adding that the press is an insufficient tool to hold tech companies accountable. “I think this is a case where [the privacy forum] was looking at collateral reputational damage and damage to the pledge and they had to act to protect their own self-interests and the interests of other pledge members. I do not read it as a signal that enforcement of the pledge will be enhanced going forward.”

Meanwhile, Levin sees Illuminate’s unwillingness to discuss its security practices with the privacy forum as another reason to believe the company acted negligently.

Illuminate is “clearly in legal jeopardy and I think they are concerned about making statements that could be used in a legal context to hold them accountable,” Levin said.

Still, the privacy forum’s decision to remove Illuminate raises the stakes from its previous enforcement efforts, most notably against the College Board, a nonprofit that administers the widely used SAT college admissions exam. In 2018, the privacy forum placed the nonprofit’s status as a pledge signatory “under review” after an investigation found it was selling student data to third parties. The College Board was reinstated as an active pledge signatory a year later. It remains in good standing, despite a 2020 investigation by Consumer Reports that uncovered it was sending student data to major digital advertising platforms.

While some have argued that the College Board should have been removed from the pledge, the privacy forum has previously resisted efforts to de-list signatories. When the group learns about complaints against pledge signatories, it typically works with companies to resolve issues and ensure compliance, according to a recent blog post.

Removing companies from the pledge, the post argued “could result in fewer privacy protections for users, as a former signatory would not be bound by the Pledge’s promises for future activities.”

Disclosure: The Bill & Melinda Gates Foundation and the Chan Zuckerberg Initiative provide financial support to the Future of Privacy Forum and LA School Report’s parent company The 74.