California has enacted a law that prohibits companies from using students' personal information for profit. 

SB1177 by Senate President Pro Tem Darrell Steinberg, D-Sacramento, makes companies responsible for protecting any personal information that they gather from elementary and high school students through websites, online applications and other services.

The bill requires providers to use the data only for school purposes and bans the sale of students' personal information to advertisers and third parties.

Brown also approved a related bill, AB1584, by Assemblywoman Joan Buchanan, D-Alamo, that says student information collected by outside companies remains the property of school districts.

Steinberg, in a statement, called his measure a "first-in-the-nation law that also proves privacy and online innovation can be complementary partners."

Supporters said it fills a hole in the federal Family Educational Rights and Privacy Act. It is backed by organizations representing teachers, parents, crime victims and supporters of privacy rights.

Brown signed the bill without comment. But Richard Holober, executive director of the Consumer Federation of California, issued a statement calling it "the vanguard for consumer rights in the digital era. Until this point, protecting students' online information has been a Wild West."

Holober and other supporters said the bill protects consumers' rights to have sensitive information used in a way that is consistent with the purpose for which it was collected.

http://www.seattlepi.com/news/article/California-enacts-strict-student-privacy-law-5789411.php