It’s easy to think of regulations like the Family Educational Rights and Privacy Act (FERPA) as industry-specific, and therefore dismissible. However, FERPA applies to any business offering goods or services to an educational institution, so unless you want to cut a whole industry from your audience, it’s critical to understand.
With that in mind, business owners, leaders, and decision-makers need to understand the fundamental principles behind FERPA so that they don’t end up in a situation where they find themselves non-compliant. This is critical because of the severe penalties levied against businesses that aren’t compliant when they’re supposed to be.
On top of that, there are a variety of other business operations that FERPA and other data privacy regulations can influence, especially marketing, data collection, and analytics. Read through the following sections to learn more about the FERPA regulations and how could they affect your business.
Data security regulations are in place to help organizations defend against cybercrime. To learn more about modern day cyberattacks and how they happen, watch Impact’s webinar, Dissecting Cybersecurity Breaches: How they Happen & How to Stop Them.
The Fundamentals of FERPA
FERPA is a federal law in the United States that was enacted in 1974. The law is designed to protect the privacy of student educational records and applies to all educational institutions that receive funds under any program administered by the US Department of Education. The primary aim of FERPA is to grant parents certain rights with respect to their children's educational records.
These rights then transfer to the student, or former student, once they reach 18 years of age or attend a school beyond the high school level. At this point, the individual is referred to as an "eligible student."
FERPA gives parents and eligible students the right to access and review the student's educational records maintained by the school. They also have the right to request that a school correct records they believe to be inaccurate or misleading. If the school decides not to amend the record, the parent or eligible student then has the right to a formal hearing.
Additionally, FERPA restricts the disclosure of information from these records without the consent of the parent or eligible student, except under certain conditions such as health and safety emergencies, compliance with judicial orders, or specific exceptions that allow for the release of "directory" information (unless the parent or eligible student opts out).
One of the crucial aspects of FERPA is the protection it offers against the unauthorized sharing of student information. Educational institutions must have written permission from the parent or eligible student to release any information from a student's education record. FERPA also mandates that schools annually notify parents and eligible students of their rights under FERPA.
This act emphasizes the importance of privacy and confidentiality in the handling of educational records, setting a standard for how educational institutions manage and safeguard student information.
Why FERPA Matters for Business Operations
In business operations, FERPA particularly matters to organizations that interact with educational institutions or handle educational records, because it sets strict standards for the privacy and management of student information. Compliance with FERPA is not just a legal requirement but also a crucial aspect of maintaining trust and integrity in business practices.
For businesses that provide educational services, technology solutions, or data management services to schools, understanding and adhering to FERPA regulations is essential to avoid legal repercussions and potential financial penalties.
For businesses involved in data analytics, marketing, or research, FERPA limits the use of student information, ensuring that personal data cannot be exploited without proper consent. This necessitates robust data governance practices, where businesses must implement stringent data protection measures to prevent unauthorized access and disclosures.
Failing to comply with FERPA can result in the loss of business contracts with educational institutions, as well as damage to a company’s reputation, which can have long-term financial implications.
Moreover, FERPA compliance often requires businesses to train their employees on privacy policies and data handling procedures. This training ensures that all personnel are aware of the legal obligations and the importance of protecting student privacy.
By investing in FERPA compliance, businesses not only safeguard themselves against legal risks but also position themselves as responsible and trustworthy partners to educational institutions, which can lead to enhanced business opportunities and stronger client relationships.
FERPA and The Cloud: Security Considerations
The role of cloud technology in relation to FERPA is increasingly significant as educational institutions and businesses move towards digital solutions for managing and storing student records. Cloud technology offers scalable and flexible solutions for storing vast amounts of data, making it an attractive option for schools and businesses alike.
However, the adoption of cloud technology also brings about critical considerations regarding data security and privacy, especially when it involves sensitive student information protected under FERPA.
Ensuring FERPA compliance in the cloud involves implementing robust security measures to protect student data from unauthorized access, breaches, and other cyber threats. This includes encryption of data both in transit and at rest, strong access controls, regular security audits, and ensuring that cloud service providers adhere to stringent security standards.
Ultimately, it is essential that educational institutions and businesses enter into agreements with cloud service providers that explicitly outline the responsibilities of each party in safeguarding student information and maintaining FERPA compliance.
The importance of security in the context of FERPA cannot be overstated. A data breach involving student records can have severe consequences, including identity theft, fraud, and a loss of trust from students, parents, and educational partners. Furthermore, non-compliance with FERPA can lead to significant legal and financial penalties for both educational institutions and their business partners.
With all this in mind, it is crucial for businesses to not only implement advanced security technologies but also to stay informed about the latest security threats and regulatory changes related to data privacy.
The Role of FERPA in Marketing and Data Analytics
FERPA also plays a critical role in marketing and data analytics by imposing stringent restrictions on the use of student information, ensuring that this data is handled with the utmost care and confidentiality.
For businesses involved in these fields, FERPA mandates that personally identifiable information (PII) from student educational records cannot be used for marketing purposes without explicit consent from the student or their parents. This includes data analytics activities that might identify students or their educational records.
In marketing, FERPA compliance means that businesses must be vigilant about the source and use of the data they handle. For instance, educational institutions cannot share student information with third-party marketing firms unless they have obtained the proper consent. This ensures that students and their families are protected from unsolicited marketing practices and potential misuse of their personal information.
Businesses must therefore develop marketing strategies that either do not rely on FERPA-protected information or have clear consent mechanisms in place.
In the realm of data analytics, FERPA influences how data can be collected, analyzed, and reported. Businesses must anonymize or aggregate student data to ensure that individual students cannot be identified. This often involves sophisticated data handling techniques to strip out any PII before analysis. Additionally, businesses must be transparent about their data collection methods and provide educational institutions with assurances that FERPA regulations are being followed.
This level of compliance not only protects the students but also enhances the credibility and trustworthiness of the business.
By adhering to FERPA, businesses in marketing and data analytics can avoid legal issues and foster a reputation for ethical data practices. Ensuring that student data is used responsibly and legally not only aligns with FERPA requirements but also builds trust with educational institutions and their stakeholders, ultimately supporting long-term business success and partnerships.
Wrapping Up on FERPA Compliance
Understanding when you can and cannot use data is an extremely important as more data is available to more organizations. This is partially why data privacy and security regulations have been established across various industries, like FERPA in the educational space.
Knowing when these regulations apply is vital for decision-makers and business leaders as they work to expand their market share and win more consumers. Without this knowledge, it is significantly easier to find yourself in a non-compliant situation, facing several penalties.
To learn more about the role of data security and privacy in a cyberattack, watch Impact’s webinar, Dissecting Cybersecurity Breaches: How they Happen & How to Stop Them.
