Thursday, May 29, 2014

20 million student records put at risk by ConnectEDU's bankruptcy -- & what lessons if any have tech enthusiasts learned from the inBloom debacle?

CORRECTION:  I have just been informed that Mitchell did not sit on ConnectEDU's board, but a company called ConnectED.

ConnectEDU was one of the three data dashboard companies chosen by the NY State Education Department to receive a statewide set of personal student data through the inBloom data cloud, as part of their "EngageNY Portal."  Now ConnectEDU has announced it has gone bankrupt, despite receiving a $500,000 grant from the Gates Foundation less than a year ago.  Until recently, Ted Mitchell sat on its Board of Directors.  Mitchell is the former head of the New School Ventures Fund, and was just confirmed Under Secretary to Arne Duncan at the US Department of Education

The assets of ConnectEDU, including 20 million personal student records, are being bought by a venture capital company called North Atlantic Capital.  Now the FTC is stepping in, to try to block the handing over of all these personal records.  According to Education Week:

The potential sale of 20 million student records by ConnectEDU, an ed-tech company that filed for bankruptcy in April, has prompted the Federal Trade Commission to step in to protect the student data, the agency announced Friday.

ConnectEDU, a 12-year-old Boston-based company, provides interactive tools to help K-12 and post-secondary learners make academic and career decisions. In its privacy policy, ConnectEDU promised that—prior to any sale of the company—registered users would be notified and have the ability to delete their personally identifiable data.

Now, the FTC said that promise appears to be compromised by the potential sale of the company's assets, including the student data, to North Atlantic Capital, a Portland, Me.-based venture capital fund. As a result, the commission—by a vote of 5-0—authorized its consumer protection bureau to write a letter to the bankruptcy court that will rule on the asset sale.

The letter indicates that the terms of the sale of the company and its subsidiary Academic Management Systems Inc. in bankruptcy do not provide consumers the notice and choice set forth in the privacy policy and could potentially run afoul of both the FTC Act and the U.S. Bankruptcy Code.

Thankfully, New York State passed a law against the state providing personal student data to inBloom for the purpose of populating data dashboards as part of the state budget on March 31, and inBloom went out of business in April.  If not, ConnectEdu was in line to receive the personal data of the entire state’s public school student population – and this was originally due to occur last fall. This latest development shows how utterly reckless the state’s plans were.   As the FTC letter states,

Information about teens is particularly sensitive and may warrant even greater privacy protections than those accorded to adults. These users, as well as their parents, would likely be concerned if their information transferred without restriction to a purchaser for unknown uses.

More on this issue from THE Journal:

The company claims information about 20 million registered learners, 5,000 educational institutions and 130,000 employers across 40 countries. As the FTC letter explains, students have provided the company with information about name, date of birth, address, email address, phone number, grade level, and details about their "academic and personal interests, honors and awards and work experience." ConnectEDU has also collected personal information in the form of student records made available in its contracts with high schools and community colleges.

ConnectEDU's privacy policy  promises to obtain consent from its customers before it makes "personally identifiable data" available to third parties  The FTC is urging the company to notify users, so they can ask to have their data deleted before it is sold.

Yet the lessons of inBloom and the overriding need to protect student privacy have still not been properly absorbed by tech enthusiasts in the private and public sectors.  Stacey Childress, who managed the inBloom project for the Gates Foundation and spent $100 million on it, is now stepping in to replace Ted Mitchell as the CEO of the New Schools Venture Fund. 

“Stacey brings to NewSchools a deep understanding of education entrepreneurship and innovation,” said Dave Goldberg, NewSchools board member and CEO of SurveyMonkey.  “But it is Stacey’s track record as a bold investor in people and ideas .. that has us most excited about NewSchools’ next chapter.”

I guess a "bold investor" is one way to describe how Childress threw away $100 million on inBloom, not to mention $500,000 on ConnectEdu just a few months before it went bankrupt. 

Steven Hodas is another guy who has apparently learned little from the inBloom debacle.  Hodas is head of the NYC Department of Education’s Innovation Zone and comes from the world of private industry, as Ed Week describes him,  most recently as an entrepreneur and an adviser to startups.” 

He apparently sees his role, like the NSVF and the Gates Foundation, to 
facilitate the access of data-mining vendors into our public schools:

 “Now, he's bringing his entrepreneurial spirit and energy "inside" the nation's largest school system as the executive director of Innovate NYC Schools, a district initiative to discover and expand educational technologies with high potential for transforming classrooms toward more personalized, student-centered models… By initiating an open call to developers to bring their ideas to schools, New York City has been able to identify technology solutions that would not have been discovered through a traditional request-for-proposal process…”

Check out the photo and caption from the April 2014 Innovation Zone newsletter to the right.  

Then watch what Hodas said at an NYU panel on the "Social and Ethical Dimensions of Big Data" about inBloom below, in which he propounds the myths of tremendous educator support and the benefits that the company could have provided if only inBloom had learned the basic principles of marketing through a "weekend seminar on user-friendly design." 


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