Report to Congressional Requesters

United States Government Accountability Office

GAO

August 2004 COMMERCIAL 

ACTIVITIES IN 

SCHOOLS 

Use of Student Data is 

Limited and 

Additional 

Dissemination of 

Guidance Could Help 

Districts Develop 

Policies 

GAO-04-810 
www.gao.gov/cgi-bin/getrpt?GAO-04-810.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Marnie Shaul at 

(202) 512-7215 or shaulm@gao.gov. 

Highlights of GAO-04-810, a report to 

congressional requesters 

August 2004

COMMERCIAL ACTIVITIES IN SCHOOLS

Use of Student Data is Limited and 

Additional Dissemination of Guidance 

Could Help Districts Develop Policies 

Congress has continuing interest in 

commercial activities in U.S. public 

schools. These include product 

sales, advertising, market research, 

and the commercial use of personal 

data about students (such as 

names, addresses, and telephone 

numbers) by schools. To update 

information about commercial 

activities in schools, Congress 

asked us to answer the following 

questions: (1) Since 2000, what 

statutes and regulations have states 

enacted and proposed to govern 

commercial activities in schools? 

(2) To what extent have districts 

developed policies implementing 

amended provisions of the 

Protection of Pupil Rights 

Amendment (PPRA) in the No 

Child Left Behind Act on the use of 

student data for commercial 

purposes? (3) What guidance has 

the Department of Education 

(Education) disseminated? 

To answer these questions, we 

researched state laws, surveyed a 

national sample of school districts, 

analyzed policies provided by 

districts, interviewed officials at 

Education, and examined its 

guidance. In addition, we updated 

findings from the districts we 

visited in 2000. 

We recommend that Education 

disseminate to state school boards 

associations its guidance on the 

use of student data for marketing 

and selling purposes. Education 

agreed with our recommendation. 

Since we reported on commercial activities in 2000, 13 states have 

established laws addressing commercial activities in public schools, and at 

least 25 states are considering such legislation. Of the states establishing 

new laws, 6 established laws affecting market research by addressing the 

use of student data for commercial activities. Almost all of the proposed bills 

target the sale of food and beverages. Prior to 2000, 28 states established 

laws addressing commercial activities, particularly product sales and 

advertising. At that time, only 1 state passed a provision affecting market 

research. 

PPRA provisions required districts to implement policies on the collection, 

disclosure, or use of student data for marketing and selling purposes, and we 

estimate that about two-thirds of the districts in the nation believe they are 

developing or have developed such policies. However, of the 61 districts 

that sent us policies, only 19 policies addressed these issues. No district 

reported having collected student data for commercial purposes. Only a few 

reported disclosing student information for these purposes, and all had done 

so for school-related purposes such as graduation pictures. 

Education has undertaken several activities, such as sending guidance to 

state education agencies and school district superintendents and posting 

information on its Web page, to inform districts about the student 

information provisions of PPRA, but many districts appear not to understand 

the new requirements. Some districts told us that they relied on their state 

school boards association to develop policies for them because state school 

boards associations address federal and state laws. School districts in one 

state sent us policies that addressed commercial activities that had been 

developed by their state school boards association. Education was not 

required to disseminate guidance to associations of local school boards in 

each state and has not done so. 

District Policies Addressing the Commercial Use of Student Data (N = 61) 

8

11

42

Districts with policies addressing only the disclosure of 

student data for commercial purposes

Districts with policies addressing the collection, use, and 

disclosure of student data for commercial purposes

Districts with policies that did not address the 

commercial use of student data

Source: GAO analysis.
Page i GAO-04-810 Commercial Use of Student Data 

Letter 1

Results in Brief 3

Background 4

Since 2000, Most States Have Enacted Laws and Proposed 

Legislation That Affect Commercial Activities in Schools 9

Districts Are Beginning to Implement Provisions on Student Data, 

and Few Use Student Data for Commercial Purposes 12

Education Developed and Disseminated Guidance, but Many 

Districts’ Policies Did Not Address Requirements 13

Conclusions 14

Recommendation for Executive Action 15

Agency Comments 15

Appendix I Scope and Methodology 17 

Review of State Legislation 17

Survey of School Districts 17

Analysis of District Policies 20

Contacts at Education 20

Follow-up Telephone Interviews with the Seven Districts We 

Visited in 2000 21

Appendix II State Statutes and Regulations Addressing 

Commercial Activities in Schools 22 

Appendix III Legislative Proposals Addressing Commercial 

Activities in Schools, February 2004 32 

Appendix IV Questionnaire GAO Study on the Marketing and 

Selling of Student Data 41 

Appendix V Comments from the Department of Education 43 

Contents 
Page ii GAO-04-810 Commercial Use of Student Data 

Appendix VI GAO Contacts and Staff Acknowledgments 45 

GAO Contacts 45

Staff Acknowledgments 45

Tables 

Table 1: Categories of Commercial Activities 5

Table 2: Comparison of Selected PPRA and FERPA Provisions 8

Table 3: Sample and Response Rates by Strata 18

Table 4: Districts Contacted from Our Site Visits in 2000 21

Abbreviations 

FERPA Family Educational Rights and Privacy Act 

NCLBA No Child Left Behind Act 

PPRA Protection of Pupil Rights Amendment 

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Page 1 GAO-04-810 Commercial Use of Student Data 

August 20, 2004 

The Honorable Christopher J. Dodd 

Ranking Minority Member 

Subcommittee on Children and Families 

Committee on Health, Education, Labor, and Pensions 

United States Senate 

The Honorable Richard C. Shelby 

United States Senate 

Over the past decade, public schools and businesses have been forging 

new types of relationships to help each other achieve their educational 

and business-related goals. In some of these relationships, business’ 

apparent focus is on improving teaching and learning, but in others, the 

apparent focus is on developing product loyalty and increasing sales. In 

recent years, Congress and the public at large have become increasingly 

interested in the mixing of school activities with commercial enterprise. 

Some parties have wanted to limit such relationships by restricting 

product sales, advertising, market research, and the commercial use of 

personal data about students (such as names, addresses, and telephone 

numbers) by schools. However, others have promoted business 

relationships with schools as a desirable and necessary way to generate 

additional funding and resources for students. 

We first reported on product sales, direct and indirect advertising, and 

market research in schools in 2000.1

 At that time, we found state laws and 

district school board policies governing commercial activities were not 

comprehensive, and in most states, local school officials were responsible 

for making decisions about commercial activities. In addition, we found 

that the visibility and profitability of commercial activities varied widely 

and the high schools we visited had more commercial activities than the 

middle or elementary schools. 

Since then, some changes related to these commercial activities have 

occurred. Schools are facing even greater needs for funds; the use of the 

 1

GAO, Public Education: Commercial Activities in Schools, GAO/HEHS-00-156

(Washington, D.C.: Sept. 8, 2000). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-04-810 Commercial Use of Student Data 

Internet as a marketing tool has expanded; and through the No Child Left 

Behind Act (NCLBA) of 2001, Congress has legislated new protections 

regarding the collection, disclosure, and use of student data for marketing 

or selling purposes. For decades, federal law has safeguarded the release 

of student education records and has allowed parents some control over 

the use of information about their children. For example, federal law has 

prohibited districts from releasing students’ Social Security numbers 

without parental approval. However, NCLBA established new safeguards 

about the use of student data for marketing or selling purposes. 

Specifically, NCLBA amended the Protection of Pupil Rights Amendment 

(PPRA) of 1994 addressing pupil privacy by requiring school districts to 

develop a policy on the collection, disclosure, and use of personal data 

about students for commercial purposes that includes requirements for 

parental notification and permission. Finally, there has been growing 

concern about childhood obesity and whether the sale of beverages and 

food outside those offered by school breakfast and lunch programs might 

contribute to this problem. 

In view of these developments, you asked us to examine efforts by states 

to regulate a broad range of commercial activities in public schools and 

determine how districts have followed through with the PPRA provisions 

about the collection, disclosure, or use of student data for marketing and 

selling purposes. We conducted research to answer the following 

questions: (1) Since 2000, what statutes and regulations have states 

enacted to govern commercial activities in schools and what proposed 

legislation are states considering? (2) To what extent have districts 

developed policies implementing the PPRA provisions in NCLBA on the 

use of student data for commercial purposes? (3) What is the Department 

of Education (Education) doing to help districts implement the new 

provisions on the use of student data for commercial purposes? 

To answer these questions, we reviewed state laws and regulations in all 

50 states and Washington, D.C., as of May 2004. Also, we reviewed 

proposed legislation that had been introduced between January 1, 2003, 

and February 2004 to obtain a snapshot description of possible future state 

legislative activities. We conducted a national sample survey of school 

districts to determine if their policies were consistent with the PPRA 

provisions on the use of student data for commercial activities and asked 

them to report on any activities in which they engaged that used student 

data for commercial purposes. We obtained an 87 percent weighted 

response rate. We also asked superintendents in the districts we surveyed 

to send us copies of their policies that govern activities involving the use 

of student information for marketing and selling purposes. We evaluated 
Page 3 GAO-04-810 Commercial Use of Student Data 

the extent to which these policies implemented PPRA requirements by 

examining whether they covered the collection, disclosure, and use of 

student data for commercial purposes. To discern changes in commercial 

activities in the seven school districts we visited in 2000, we interviewed 

district and school officials in those districts by telephone. We had 

selected these seven districts, located in California, Michigan, and New 

Mexico, to illustrate a range of commercial activities in states identified as 

having legal frameworks generally supportive of such activities as well as 

a range of geographic, economic, and demographic characteristics. 

Finally, we interviewed officials at Education and examined its guidance 

and initiatives on PPRA’s commercial provisions. See appendix I for a 

detailed explanation of our scope and methodology. We conducted our 

work between November 2003 and August 2004 in accordance with 

generally accepted government auditing standards. 

Since our previous report in 2000, 13 states have enacted 15 statutory 

provisions and issued 3 regulatory provisions that pertain to commercial 

activities in public schools, and since January 1, 2003, we identified 25 

states in which legislators have proposed laws that address commercial 

activities. Of the 13 states establishing new laws, 6 established provisions 

addressing the collection, disclosure, or use of student information for 

marketing and selling purposes. For example, Colorado enacted a law 

prohibiting student participation in any survey without written parental 

consent. Other new provisions addressed product sales and advertising. 

Most of the proposed bills targeted food and beverage sales. Prior to 2000, 

28 states had passed laws or regulations pertaining to commercial 

activities. Almost all of these provisions addressed direct advertising and 

product sales. At that time, only one state had passed a provision relating 

to the use of student data for commercial purposes. The seven districts we 

visited in 2000 continue to conduct a variety of commercial activities, 

particularly product sales, and three districts told us that they have 

increased the level of activities with local businesses. However, the types 

of activities in these districts have not substantially changed. 

Based on the responses to our survey, we estimated that about two-thirds 

of the school districts in the nation had developed or were developing 

policies addressing PPRA requirements concerning the commercial use of 

student data. However, for the 61 districts that voluntarily provided us 

policies they had developed, we concluded that only 19 of these policies 

specifically addressed the commercial uses of student data. Regardless, no 

district reported having collected student data specifically for marketing 

purposes, and those we spoke to who had released student names, 

Results in Brief 
Page 4 GAO-04-810 Commercial Use of Student Data 

addresses, or telephone numbers for marketing or selling purposes said 

they did so for school-related purposes, such as graduation pictures. Three 

of the seven districts we visited in 2000 reported that they had 

subsequently adopted new policies banning or restricting the use of 

student data, although none collected student data for commercial 

purposes. One of the seven released information in order for seniors to 

obtain class pictures, class rings, and graduation announcements. 

Education has taken steps to inform districts about the added student data 

safeguards included in PPRA, but many policies that districts provided to 

us did not specifically address the collection, disclosure, or use of student 

information for commercial purposes. Education has issued guidance 

advising districts that if they do not already have such a policy, they must 

develop and adopt one and notify parents. The department also provided 

districts with model notification information that districts could use to 

inform parents, posted relevant information on its Web site, and covered 

the provision in some of its training activities. However, only 19 of the 61 

districts that responded to our request sent policies that did address 

commercial activities. District officials in several states reported that they 

relied on state school boards associations for help in developing policies. 

In addition, two districts in one state sent us policies that had been 

developed by their state school boards association. Although Education 

has disseminated its guidance to school districts and state education 

agencies, it has not disseminated this guidance directly to the school 

boards association in each state. 

We recommend that the Secretary of Education take additional action to 

assist districts in understanding that they are required to have specific 

policies in place for the collection, disclosure, and use of student 

information for marketing and selling purposes by disseminating its 

guidance to state school board associations. In commenting on a draft of 

our report, Education agreed with our recommendation. 

As we reported in 2000, commercial activities in school can generally be 

classified in four categories—product sales, direct advertising, indirect 

advertising, and market research—although each category encompasses a 

wide range of activities.2

 For example, advertising activities could range 

from selling advertisements for a high school football game to selling 

 2

GAO/HEHS-00-156. 

Background 
Page 5 GAO-04-810 Commercial Use of Student Data 

naming rights to a school. Although this report synthesizes statutes, 

regulations, and proposed legislation addressing all four categories, our 

discussions of school district policies and Education’s activities focus on 

the fourth category, market research, because of the amendments made by 

NCLBA that place requirements on districts that deal with the collection, 

disclosure, and use of student data for marketing and selling. (See table 1.) 

Table 1: Categories of Commercial Activities 

Commercial 

activities Examples 

Product sales • Product sales benefiting a school district, school, or student 

activity, such as the sale of beverages or food within schools 

• Cash or credit rebate programs 

• Fundraising activities, such as the short-term sales of gift wrap, 

cookie dough, or candy, to benefit a specific student population 

or club 

Direct advertising • Signage and billboards in schools or school facilities, and on 

school buses and shelters 

• Corporate logos or brand names on school equipment, such as 

marquees, message boards, or scoreboards 

• Ads, corporate logos, or brand names on book covers, student 

assignment books, or posters 

• Ads in school publications, such as newspapers or yearbooks 

• Media-based advertising, such as ads on Channel One or 

Internet sites 

• Free samples, such as food or personal hygiene products 

Indirect advertising • Corporate-sponsored educational materials, teacher training, 

contests, incentives, grants, or gifts 

Market research • Surveys or polls related to commercial activities 

• Internet surveys or polls asking for information related to 

commercial activities 

• Tracking students’ Internet behavior and responses to 

questions calling for personal identification at one or more Web 

sites 

Source: GAO/HEHS-00-156. 

In recent years, the growth of the Internet has had a large impact on 

commercial activities, particularly market research, by enabling marketers 

to elicit aggregated and personally identifiable information directly from 

large numbers of students. For example, some Web filtering systems used 

in schools that block student access to certain Web sites also allow the 

company that maintains that software to measure and analyze how 

children use the Internet by tracking which Web sites they visit and how 

long they stay there. Although this information is aggregated and does not 
Page 6 GAO-04-810 Commercial Use of Student Data 

identify particular children, this information, especially when used with 

demographic data, can help businesses develop advertising plans that 

target particular audiences if districts allow the installation of the 

software. Also, Web sites directly elicit the participation of students in 

market research panels by offering them cash or prizes in exchange for 

information about themselves and their preferences. This makes it 

possible for companies to engage large-scale customized panels of 

students to test out marketing strategies and provide data to develop 

product lines and product loyalty without relying on schools. 

NCLBA addresses some concerns about commercial activities and student 

data by amending and expanding certain student data safeguards that 

were established in PPRA.3

 Prior to NCLBA, PPRA generally prohibited 

requiring students to submit to a survey concerning certain personal issues 

without prior written parental consent. As amended, PPRA4

 for the first 

time requires districts to develop and adopt new policies, in consultation 

with parents, for collecting, disclosing, and using student data for 

marketing or selling purposes.5

 Districts are also required to directly notify 

parents of these policies and provide parents an opportunity to opt their 

child out of participation in such activities. Furthermore, districts are 

required to notify parents of specific activities involving the collection, 

disclosure, and use of student information for marketing or selling 

purposes and to provide parents with an opportunity to review the 

collection instruments. PPRA did not contain deadlines for districts to 

develop policies. Also, PPRA requires Education to annually inform each 

state education agency and local school districts of their new obligations 

under PPRA. Finally, PPRA continues to require Education to investigate, 

process, and adjudicate violations of the section. 

 3

See 20 U.S.C.§1232h(c)(1)(E)(Supp. 2003). 

4

In this report we are not addressing other amendments to PPRA, which established 

requirements for surveys unrelated to marketing and selling and nonemergency invasive 

physical examinations. 

5

If a school district already had a policy in place on January 8, 2002, that addressed the 

collection, disclosure, or use of student data for commercial purposes, the amendments do 

not require the district to adopt a new policy. See U.S.C. §1232h(c)(3). 

NCLBA Amends Statutory 

Safeguards on the Use of 

Student Data for Marketing 

and Selling Purposes 
Page 7 GAO-04-810 Commercial Use of Student Data 

For the past 30 years, student and parent privacy rights related to students’ 

education records have been protected primarily under the Family 

Educational Rights and Privacy Act (FERPA), which was passed in 1974. 

FERPA protects the privacy of students’ education records by generally 

requiring written permission from parents before records are released. 

FERPA also allows districts to classify categories of information as 

publicly releasable directory information so long as the district has 

provided public notice of what will constitute directory information items 

and has allowed parents a reasonable period of time to advise the district 

that directory information pertaining to their child cannot be released 

without consent. Under FERPA, directory information may include a 

student’s name, telephone number, place and date of birth, honors and 

awards, and athletic statistics. Unlike PPRA, FERPA does not address the 

participation of students in surveys or the collection, disclosure, or use of 

student data for marketing or selling purposes. (See table 2.) As a result of 

the NCLBA amendments, Education is required to annually inform each 

state and local education agency of the educational agency’s obligations 

on PPRA and FERPA.6

 6

See 20 U.S.C. §1232h(c)(5)(c)(Supp. 2003). 

FERPA and PPRA 

Safeguards Address 

Different Student Privacy 

Issues 
Page 8 GAO-04-810 Commercial Use of Student Data 

Table 2: Comparison of Selected PPRA and FERPA Provisions 

Provisions PPRA FERPA 

Activities 

targeted 

Collection, disclosure, or use of personal student data 

for marketing or selling purposes 

Survey, analysis, or evaluation concerning political 

affiliations or beliefs; psychological problems; sexual 

behavior or attitudes; self-incriminating behavior; critical 

appraisal of individuals with whom respondents have 

close relationships; privileged relationships; religious 

beliefs; or income (other than that required by law to 

determine program eligibility) 

Nonemergency invasive physical examinations of children 

Disclosure of students’ education records 

Inspection, review, and amendment of education 

records 

Definitions of 

personal 

student data 

Individually identifiable information including: 

Name 

Address 

Telephone number 

Social Security numbera

All student information contained in education records 

Each district can define a subset of information called 

“directory information” that is generally not considered 

harmful or an invasion of privacy to release, such as 

name, address, telephone number, height and weight (if 

an athlete), and scholastic honors and awardsa

 

Notification Districts must directly notify parents of policies regarding 

the collection, release, or use of student data 

Districts must give parents an opportunity to exclude their 

child’s participation in specific activities or to prevent the 

release of information about their child except for certain 

types of educational activities and for the armed services 

Districts must notify parents of the categories of 

information it has designated as directory information 

Districts are to notify parents of students of their right to 

opt out of the disclosure of directory information 

Source: GAO analysis. 

a

There are restrictions on the use of Social Security numbers. See GAO, Social Security Numbers: 

Use Is Widespread and Protections Vary, GAO-04-768T (Washington, D.C.: June 15, 2004). 

Consequently, districts would not designate students’ Social Security numbers as part of directory 

information. 

State education laws are enacted by state legislatures and administered by 

each state’s department of education, which is led by the state’s chief state 

school officer. The Council of Chief State School Officers represents 

states’ education interests in Washington, D.C., and acts as a conduit of 

information between the federal government and the states regarding 

federal education laws. Each state department of education provides 

guidance and regulations on state education laws to each school district. 

School district policies are generally set by local school boards according 

to the authority granted to them by state legislatures. The policies are then 

administered by the school district’s superintendent and other school 

district staff. Local school boards in each state have come together to form 

a state school boards association. They provide a variety of services to 

their members including help on keeping their local school board policies 

current. For example, a partial list of services offered by one school board 

School District Policies 

Are Set at the Local Level 

under State Laws 
Page 9 GAO-04-810 Commercial Use of Student Data 

association includes policy development services, advocacy, legislative 

updates, legal services, executive search services, conferences and 

training, and business and risk management services. 

Since 2000, 13 states have established statutes, regulations, or both that 

address one or several categories of commercial activities in schools. Six 

of these states established provisions addressing market research by 

restricting the use of student data for commercial activities and for 

surveys. Other states passed statutes or issued regulations addressing 

product sales and advertising. In addition, as of February 2004, at least 25 

states are considering proposed legislation that would affect commercial 

activities. Most of these proposals would affect product sales, particularly 

the sale of food and beverages. Prior to 2000, 28 states had passed 

provisions addressing commercial activities. At that time, most provisions 

addressed direct advertising and product sales. The seven districts we 

visited in 2000 continued to conduct a variety of commercial activities, 

particularly product sales, and three districts reported that they have 

increased the level of activities with local businesses. However, the types 

of activities in these districts have not substantially changed since our 

visit. 

Since our previous report in 2000, 13 states have enacted 15 statutory 

provisions and issued 3 regulatory provisions addressing one or more 

types of commercial activities in schools. Six states passed legislation 

affecting marketing research. Three of these 6 passed laws restricting the 

disclosure or use of student data for commercial purposes, and another 3 

placed restrictions on students’ participation in surveys. For example, an 

Illinois statute prohibited the disclosure of student data to businesses 

issuing credit or debit cards, and a New Mexico regulation prohibited the 

sale of student data for commercial reasons without the consent of the 

student’s parent. Laws in Arizona, Arkansas, and Colorado prohibited 

student participation in surveys without the consent of their parents. Five 

states passed new provisions affecting product sales. In most cases, these 

Since 2000, Most 

States Have Enacted 

Laws and Proposed 

Legislation That 

Affect Commercial 

Activities in Schools 

State Statutes and 

Regulations Vary Widely in 

Purpose and Scope 
Page 10 GAO-04-810 Commercial Use of Student Data 

laws targeted the sale of soft drinks and snack food.7 Other new provisions 

addressed direct and indirect advertising.8

Prior to 2000, 28 states had established one or more statutes or regulations 

that affected commercial activities in schools. Twenty-five states 

established provisions addressing advertising—in 19 states, measures 

affected direct advertising and in 6, indirect advertising. Sixteen states 

established provisions addressing product sales. Only 1 state established a 

measure that addressed market research. See appendix II for a state-bystate listing of provisions addressing commercial activities. 

Legislatures in 25 states have recently considered one or more bills that 

affect commercial activities in schools, with most having a particular focus 

on child nutrition. These bills are intended to improve child nutrition and 

reduce obesity, and to achieve this intention, place limitations, 

restrictions, or disincentives on the sale of beverages and food of limited 

nutritional value. Legislatures in 24 of the 25 states recently considered 

bills that restrict or ban the sale of beverages and food of limited 

nutritional value in schools. For example, a bill in New York would 

prohibit vending machines from selling food and drinks of minimal 

nutritional value. Additionally, legislatures in several states have 

considered bills that restrict the hours when students can buy products of 

limited nutritional value. For example, bills in Alaska and Ohio would 

restrict the sale of soft drinks during certain hours. Finally, pending 

legislation in Maryland would require schools to sell food of limited 

nutritional value at higher prices than nutritious food. 

Legislatures in seven states have recently proposed bills that focus on 

other aspects of commercial activities in schools. In three states—

Connecticut, Minnesota, and North Carolina—bills would restrict the 

ability of schools to enter into exclusive contracts with beverage and food 

venders. In two statesNew Jersey and North Carolinabills would place 

limits on the ability of schools to release or collect personal information 

 7

For additional information on policies restricting the sale of foods that compete with 

school meal programs, see GAO, School Meal Programs: Competitive Foods Are Available 

in Many Schools; Actions Taken to Restrict Them Differ by State and Locality, 

GAO-04-673 (Washington, D.C.: Apr. 23, 2004). 

8

Some provisions addressed more than one activity. For example, a provision in Virginia 

affected direct and indirect advertising. 

Most Proposed Legislation 

Affecting Commercial 

Activities Regards Food 

and Nutrition 
Page 11 GAO-04-810 Commercial Use of Student Data 

about students, such as prohibiting the release of data from the studenttesting program to any marketing organization without the written 

permission of the parent or guardian. Other proposed bills addressed a 

variety of issues, such as allowing schools to sell advertising and accept 

supplies bearing logos or other corporate images or requiring school 

boards to disclose the portion of proceeds from fundraising activities that 

is contributed to the school activity fund. See appendix III for a state-bystate listing of legislative proposals. 

In updating the site visit information we collected in 2000, we found only 

slight changes in commercial activities in all seven school districts. All 

districts reported they continued to engage in product sales and display 

advertising. As we found earlier, most commercial activities, particularly 

product sales and advertising, occurred in high schools. All the high 

schools we visited in 2000 still sold soft drinks, and most sold snack or fast 

food. To varying degrees, all displayed corporate advertising. High schools 

continued to report the receipt of unsolicited samples, such as toiletries, 

gum, razors, and candy, that they did not distribute to students. In 

contrast, the elementary schools we contacted did not sell carbonated soft 

drinks to students or display corporate advertising. Grocery and 

department store rebate programs continued to operate in almost all 

schools, but coupon redemption programs were largely an elementary 

school enterprise. As we found before, none of the districts reported using 

corporate-sponsored educational materials or engaging in market research 

for commercial purposes. 

Officials did report some changes in commercial activities. Three of these 

districts reported stronger ties with local businesses, and three schools in 

two districts reported they now sell healthier soft drinks. One district 

reported a new relationship with a computer firm headquartered in its area 

that provided tutors as well as cash donations to schools in the district. 

Under this relationship, company employees tutored students who were at 

risk of failing, and the company donated $20 to schools for each 10 hours 

of tutoring that its employees provided. A principal in this district reported 

that many students in her school benefit substantially from this 

relationship and her school earned between $6,000 and $9,000 per year in 

donations. Another district reported it had entered into a new contract 

with a local advertising agency to raise revenue to renovate sport 

concession stands, and a third had organized a new effort to sell 

advertisements to fund construction on the district’s baseball field. Three 

principals told us that vending machines in their schools now offer a 

Commercial Activities in 

the Seven Districts We 

Visited in 2000 Have Not 

Generally Changed 
Page 12 GAO-04-810 Commercial Use of Student Data 

different mix of beverages—for example, more juice, milk, and water and 

fewer carbonated beverages—than they did when we visited in 2000. 

We estimate that about two-thirds of the districts in the nation were either 

developing or had developed policies addressing the new provisions on 

the use of student data for commercial purposes. However, only 19 of the 

61 districts that provided us copies of their policies specifically addressed 

these provisions. Very few school districts reported releasing student data 

for marketing and selling, and all these releases were for student-related 

purposes. Of the seven districts we visited in 2000, three adopted new 

policies on the use of student data since our visit, and only one released 

data and that was for graduation pictures. 

Although districts reported they had developed policies, many of the 

policies they sent us did not fully address PPRA requirements. On the 

basis of the results of our surveys, we estimate about a third of districts 

were developing policies regarding the use of student data for commercial 

purposes; another third had developed policies; and about another third 

had not yet developed policies.9

 However, when we analyzed policies that 

61 districts sent to us, we found only 19 had policies that specifically 

addressed marketing and selling of student information. Of these, 11 

policies addressed the collection, release, and use of student information 

for commercial purposes. Eight policies partially addressed the provisions 

by prohibiting the release of student data for these purposes. Policies in 

the 42 remaining districts did not address the new PPRA provisions. Many 

of these districts provided us policies concerning FERPA requirements. 

We telephoned all districts in our sample that reported they release data 

for commercial purposes and a subsample of districts that reported they 

had not. Of the 17 districts that released data for commercial purposes, all 

reported that they released data only for school-related purposes. For 

example, all 17 released students’ names to photographers for graduation 

or class pictures. Two of these districts also released student data to 

vendors who supplied graduation announcements, class rings, and other 

graduation-related products, and another two districts released student 

information to parent-teacher organization officials who produced school 

 9

Because the survey is based on a sample, all estimates in this report are subject to 

sampling error. Unless otherwise noted, the 95 percent confidence intervals for estimates 

in the report are less than plus or minus 9 percentage points. 

Districts Are 

Beginning to 

Implement Provisions 

on Student Data, and 

Few Use Student Data 

for Commercial 

Purposes 
Page 13 GAO-04-810 Commercial Use of Student Data 

directories that they sold to students’ parents. Of the 16 districts that 

reported they did not release student data, one actually did release student 

data. As in the other cases, that district released it to a school 

photographer. 

Of the seven districts we visited in 2000, three adopted new policies on the 

use of student data. One of the districts we visited adopted new policies 

that incorporated PPRA provisions on the use of student data for 

commercial purposes. Two adopted policies with blanket prohibitions 

against some uses of student data for marketing and selling. In one of 

these districts, policies prohibited the release of students’ data for any 

survey, marketing activity, or solicitation, and policies in the other banned 

the use of students to support any commercial activity. Officials in all 

seven districts reported that their district did not collect student data for 

marketing or selling purposes, and several expressed surprise or disbelief 

that this practice did in fact occur. However, a high school in one district 

reported that it disclosed information on seniors to vendors selected by 

the district to sell senior pictures, school rings, and graduation 

announcements. 

As required by NCLBA, Education has developed guidance and notified 

every school district superintendent and chief state school officer in the 

country of the new required student information protections and policies, 

and has charged the Family Policy Compliance Office to hear complaints 

on PPRA. Education issued guidance about the collection, disclosure, and 

use of student data for commercial purposes as part of its general 

guidance on FERPA and PPRA in 2003 and 2004. In addition, although not 

required by statute to do so, Education provided superintendents with 

model notification information that districts could use to inform parents of 

their rights, included information about PPRA in some of its training 

activities, and posted its guidance and other PPRA-related material 

prominently on its Web site. Education has charged its Family Policy 

Compliance Office to hear complaints and otherwise help districts 

implement the new student data requirements. Although the office has 

received some complaints about other provisions related to student 

privacy, as of June 2004, officials from that office reported they have 

received no complaints regarding the commercial uses of student data. 

Many districts did not appear to understand the new requirements, as 

shown by our analysis of the 61 policies sent to us by districts in our 

sample. Although we asked districts to send us their policies that 

addressed these new provisions, only 11 districts sent policies that 

Education Developed 

and Disseminated 

Guidance, but Many 

Districts’ Policies Did 

Not Address 

Requirements 
Page 14 GAO-04-810 Commercial Use of Student Data 

addressed these new provisions comprehensively, and 8 sent policies that 

covered these provisions partially. The 42 remaining districts sent policies 

that did not contain specific language addressing the collection, release, or 

use of student data for commercial purposes, although districts sent them 

to us as documentation that the districts had developed such policies. 

Most of these policies contained only general prohibitions about the 

release of student records and concerned FERPA. 

Although Education is not required to issue its guidance to state school 

boards associations, four districts in two states in our survey offered 

unsolicited information that they relied on state school boards 

associations to develop policies for their consideration and adoption. Two 

districts in a third state that sent us policies used policies developed by 

their state school boards association to address commercial activities in 

schools. However, Education did not distribute its guidance to these 

associations. 

Although state laws both limit and support commercial activities in 

schools, many state legislatures have chosen to pass laws addressing only 

specific activities such as permitting or restricting advertising on school 

buses. In addition, many states have not enacted legislation concerning 

commercial activities or have passed the authority to regulate these 

activities to local districts, thus allowing district school boards, 

superintendents, or principals to determine the nature and extent of 

commercial activities at the local level. Not only do commercial 

activitiesproduct sales, direct advertising, indirect advertising, and 

market researchencompass a broad spectrum of activities, but also the 

levels of these activities and the levels of controversy attached to them 

vary substantially. For example, few would equate selling advertisements 

for a high school football program with selling the naming rights to a 

school, although both are examples of direct advertising. Because of these 

differences, as well as philosophical differences among districts and 

communities, it is probably not surprising that states legislatures have 

taken various approaches toward the regulation of commercial activities. 

Perhaps because providing student information for commercial purposes 

may have serious implications, few districts do so. In fact, some school 

officials said they were skeptical that schools would allow the use of 

student data for this purpose. In the past, marketers may have approached 

schools to survey students about commercial products or services. Today, 

however, technology, particularly the proliferation and availability of the 

Internet, provides marketers with quick and inexpensive access to very 

Conclusions 
Page 15 GAO-04-810 Commercial Use of Student Data 

large numbers of children without involving the cooperation of schools. As 

Internet users, children often submit information about themselves and 

their personal product preferences in exchange for cash or prizes. Because 

of the disinclination of school officials to sell student data and the ability 

of marketers to get data directly from students without involving schools, 

it may be understandable that relatively few districts as yet have actually 

adopted policies that specifically address the selling and marketing 

provisions of PPRA. On the other hand, few would argue against the need 

to protect students’ personal information. Many businesses, particularly 

local businesses catering to youth markets, might still profit from 

acquiring student information from schools. Although we found districts 

did not use student data for purposes generally viewed as offensive, this 

does not mean such use would not happen in the future in the absence of 

safeguards. 

It appears that some superintendents may not be aware of the new PPRA 

requirements or have not understood Education’s guidance because many 

thought their district’s policies reflected the latest federal requirements on 

use of student data when, in fact, they did not. Also, several districts told 

us that they relied on state school boards associations to develop policies. 

Unlike models or guidance that reflect only federal law, policies developed 

by these groups may be most useful to districts because they correspond 

to both federal and state requirements. These associations are not on 

Education’s guidance dissemination list. 

We recommend that the Secretary of Education take additional action to 

assist districts in understanding that they are required to have specific 

policies in place for the collection, disclosure, and use of student 

information for marketing and selling purposes by disseminating its 

guidance to state school boards associations. 

We provided a draft of this report to the Department of Education for 

review and comment. Education concurred with our recommendation. 

Education’s comments are reproduced in appendix V. Education also 

provided technical comments, which were incorporated as appropriate. 

Unless you publicly announce its contents earlier, we plan no further 

distribution until 30 days after the date of this letter. At that time, we will 

send copies of this report to the Secretary of Education, appropriate 

congressional committees, and others who are interested. We will also 

Recommendation for 

Executive Action 

Agency Comments 
Page 16 GAO-04-810 Commercial Use of Student Data 

make copies available to others upon request. In addition, the report will 

be available at no charge on GAO’s Web site at http://www.gao.gov. If you 

or your staff have any questions, or wish to discuss this material further, 

please call me on (202) 512-7215. Other contacts and staff 

acknowledgments are listed in appendix VI. 

Marnie S. Shaul, Director 

Education, Workforce, and 

 Income Security Issues 
Appendix I: Scope and Methodology 

Page 17 GAO-04-810 Commercial Use of Student Data 

To conduct our work, we reviewed state statutes, regulations, and 

proposed legislation; received mail questionnaires from 219 school 

districts selected on the basis of a national stratified probability sample 

design; conducted additional brief telephone interviews with 36 of these 

districts; analyzed policies voluntarily provided by 61 districts; interviewed 

officials at Education; and examined guidance issued by the department. 

In addition, we conducted telephone interviews with district and school 

officials in the 7 districts that we visited in 2000 for our previous study on 

commercial activities in schools to update our previous findings. 

To update our compilation of state statutes and regulation contained in 

our 2000 report, we researched legal databases, including Westlaw and 

Lexis, to identify laws passed between January 2000 and May 2004. To 

identify pending laws, we researched information available on databases 

maintained by state legislatures or followed links provided by these 

databases to identify bills introduced between January 2003 and February 

2004. However, there are inherent limitations in any global legal search, 

particularly when—as is the case here—different states use different 

terms or classifications to refer to commercial activities in schools. 

We selected a national probability sample of districts, taken from school 

districts contained in the Department of Education’s Common Core of 

Data (CCD) Local Education Agency (LEA) file for the 2000-2001 school 

year. After removing districts from this list that were administered by state 

or federal authorities, we identified a population of 14,553 school districts. 

In the course of our study, we learned that some special education and 

other units in this list do not have legal authority to establish formal 

policies. As a result, we estimate that our study population consists of 

13,866 districts in the 50 states and the District of Columbia. The sample 

design for the survey consisted of a stratified random probability sample 

design: 271 districts were drawn from the three strata shown in table 3. 

The strata were designed to draw relatively large numbers of districts from 

states likely to include districts that had engaged in or planned to engage 

in one or more specific activities involving the collection, disclosure, or 

use of student information for the purposes of marketing or selling or 

Appendix I: Scope and Methodology 

Review of State 

Legislation 

Survey of School 

Districts 

Sample 
Appendix I: Scope and Methodology 

Page 18 GAO-04-810 Commercial Use of Student Data 

providing information to others for these purposes. Because we thought 

the activities of interest were low incidence activities, we wanted to 

maximize our ability to examine situations involving the use of student 

data for commercial purposes. The expected high-activity strata were 

defined as states that we identified as having laws that permitted 

commercial activities when we performed our work in 2000. As shown in 

table 4, the response rates were 76 percent, 83 percent, and 88 percent in 

the three sampling strata. The overall estimated response rate was 87 

percent. 

Table 3: Sample and Response Rates by Strata 

Stratum 

number Stratum 

Estimated 

population 

size (number 

of districts)a

Sample size 

(unweighted)

Number of 

ineligible 

districts 

(unweighted) 

Number of returned 

surveys from eligible 

districts 

(unweighted) Weight

Weighted 

response 

rate

1 States with laws that 

permitted commercial 

activities (Maine and 

New Mexico) 312 80 0 61 3.900 76%b

2 State with laws that 

permitted some types 

of commercial 

activities (California, 

Florida, Louisiana, 

Kansas, Maryland, 

Minnesota, 

Mississippi, Nevada, 

North Carolina, and 

Texas) 3,224 95 1 78 34.294 83%

3 School districts in all 

other states 10,330 96 5 80 113.520 88%

Total estimated 13,866 271 6 219 87%c

Source: GAO analysis. 

a

Adjusted for ineligible units. 

b

The response rate for each stratum is calculated as the ratio of the weighted number of eligible 

returned surveys to the weighted number of all eligible surveys. 

c

The total response rate is calculated as the ratio of the weighted number of eligible returned surveys 

over all strata to the weighted number of all eligible surveys over all strata. 

Because we followed a probability procedure based on random selections, 

our sample is only one of a large number of samples that we might have 

drawn. Since each sample might have provided different estimates, we 

express our confidence in the precision of our particular sample’s results 

as a 95 percent confidence interval (for example, plus or minus 9 

percentage points). This is the interval that would contain the actual 
Appendix I: Scope and Methodology 

Page 19 GAO-04-810 Commercial Use of Student Data 

population value for 95 percent of the samples we could have drawn. As a 

result, we are 95 percent confident that each of the confidence intervals in 

this report will include the true values in the study population. 

The practical difficulties of conducting any survey introduce nonsampling 

errors. For example, errors could be made in keying questionnaire data, 

some people may be more likely than others to respond, or questions may 

be misinterpreted. To minimize data-handling errors, data entry and 

programs were independently verified. To reduce the possibility of 

misinterpreting questions, we pretested the questionnaire in four districts. 

The full questionnaire is reproduced in appendix IV. We took additional 

steps to check answers for a subsample of respondents because of 

concerns about misinterpretation. We were concerned about possible 

misinterpretation of a question about implementing the law (question 1) 

because we discovered during our pretest that there was confusion 

between a narrow and (probably) little used portion of a student privacy 

law (PPRA) regarding selling and marketing of student data and a more 

familiar older law (FERPA) concerning student records. We were also 

concerned that there could be an underreporting of commercial activities 

because our question did not specify the activities (“During school year 

2003-2004, did your LEA, or any school in your LEA, engage or plan to 

engage in one or more activity regarding the collection, disclosure, or use 

of student information for the purposes of marketing or selling or 

providing the information to others for these purposes?”) and because 

very few schools reported using student information for commercial 

purposes. Further, our pretesting indicated a potential problem with 

respondents suggesting they would be hesitant to report commercial 

activities. Moreover, because 86 percent of our respondents answered “no” 

to question 2, a higher rate than expected, there was some question in our 

minds whether our respondents who answered no had really considered 

all the possible ways in which student information could be used for 

commercial purposes when formulating their answers. 

We attempted to verify the answers to our question about commercial 

practices by telephoning 36 districts, the 20 districts that reported using 

student data for commercial purposes, and the 16 randomly selected 

districts from among the districts that reported not using student data for 

commercial purposes. Three of the 20 districts originally reporting the use 

of student data were found not to be using the data for commercial 

purposes because they were supplying the data to military organizations 

or for scholarships, allowed uses. For the 16 sampled districts reporting 

not using students’ data for commercial purposes, we asked the 

Survey Errors Procedures 
Appendix I: Scope and Methodology 

Page 20 GAO-04-810 Commercial Use of Student Data 

superintendent or other knowledgeable person in the district detailed 

questions about 20 possible commercial activities. We asked whether the 

school provides student addresses or phone numbers for specific activities 

(student pictures, letter jackets, any types of school uniforms, yearbooks, 

class rings, tuxedo rentals for prom, corsages for prom, musical 

instrument rentals, caps and gowns for commencement, preparation for 

Scholastic Aptitude Test or other tests, any other type of tutoring, 

transportation for school field trips, or travel for other trips such as spring 

break or ski trips), or to outside organizations for students to serve on an 

Internet or study panel, answer questionnaires, test or try out a product, or 

receive mailings from or talk with representatives of outside organizations 

who are selling services or products. One of these 16 districts was found to 

be using the data for commercial purposes in connection with 

photographers for school pictures. As a result of these telephone calls, we 

corrected the three incorrect records but did not make further 

adjustments for districts that were not contacted. 

We attempted to verify the answers about the development of policies by 

examining policies that were voluntarily submitted by districts in our 

sample. Sixty-one districts complied with our request to submit a copy of 

their policy. We analyzed these policies to determine if they specifically 

referred to marketing or commercial activities.1

 We found 11 districts 

submitted policies that addressed these provisions and an additional 8 

submitted policies that partially addressed the provisions in that they 

prohibited the release of student data for commercial purposes but did not 

address the collection or use of such data. Therefore, our questionnaire 

gathered relevant data about districts’ perceptions of the extent to which 

they thought they were implementing the provision, rather than the extent 

to which these policies actually did so. This probably reflects confusion in 

interpreting the provision or lack of awareness of its existence. 

We interviewed officials at Education’s Family Policy Compliance Office 

and the Office of the General Counsel. We examined in detail the guidance 

 1

Because of the self-selected nature of these 61 districts, we do not consider them a 

probability sample and therefore results from this analysis should not be generalized to the 

study population. 

Analysis of District 

Policies 

Contacts at Education 
Appendix I: Scope and Methodology 

Page 21 GAO-04-810 Commercial Use of Student Data 

issued by the department to assist schools in implementing PPRA 

provisions on use of student data for marketing and selling purposes. 

We conducted telephone interviews with district and school officials in the 

seven districts we visited to collect information for Public Education: 

Commercial Activities in Schools (GAO-00-156), a report we issued in 

2000, to discern changes in commercial activities in these districts. (See 

table 5.) We selected these districts because they engaged in a variety of 

commercial activities, served diverse populations—ranging from large 

numbers of poor students to children from affluent families—and varied in 

terms of geography and urbanicity. In updating that information for this 

report, we interviewed district-level officials, including superintendents 

and business managers, and elementary, middle school, and high school 

principals. 

Table 4: Districts Contacted from Our Site Visits in 2000 

State District 

California Long Beach Unified School District 

 Oxnard School District (elementary and middle school) 

 Oxnard Union High School District 

Michigan Grand Rapids Public Schools 

 Ludington Area Schools 

New Mexico Albuquerque Public Schools 

 Los Alamos Public Schools 

Source: GAO-00-156. 

Follow-up Telephone 

Interviews with the 

Seven Districts We 

Visited in 2000 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 22 GAO-04-810 Commercial Use of Student Data 

This appendix lists state statutory and regulatory provisions relating to 

commercial activities as of May 2004. Shaded entries were enacted 

since 2000. This updated table identifies 15 new statutes and 3 new 

regulations and also includes state laws pertaining to the sale of 

competitive food in schools. In addition, the table includes several laws 

that were not identified in our previous report. 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Alabama Statute Prohibits requiring 

students to participate 

in school fundraising 

 

Alaska Statute Prohibits students from 

participating in survey or 

questionnaire without 

parental consent 

Arizona Statute Permits advertising 

on school buses 

under certain 

restrictions 

 

Arkansas Statute Prohibits vending 

machines in 

elementary schools 

 Prohibits students from 

participating in survey or 

questionnaire without 

parental consent 

Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 23 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

California Statute Restricts the type of 

individual food items 

sold at elementary 

schools to those that 

comply with certain 

fat and sugar content 

restrictions 

Restricts the type of 

beverages sold at 

middle and junior 

high schools during 

the school day to 

water, milk, fruitbased drinks, and 

electrolyte 

replacement 

beverages meeting 

certain restrictions 

Restricts the type of 

beverages sold at 

elementary schools 

during the school 

day to water, milk, 

100 percent fruit 

juice, and 

unsweetened fruitbased drinks 

containing at least 50 

percent fruit juice 

Restricts school 

boards and schools 

from contracting for 

carbonated 

beverages and nonnutritious foods 

Prohibits teachers, 

dentists, or 

optometrists from 

soliciting students on 

school grounds 

 Prohibits schools 

from contracting for 

electronic products 

or services that 

disseminate 

advertising to 

students unless 

certain notice 

requirements are 

followed 

Prohibits advertising 

of tobacco products 

on any outdoor 

billboard within 

1,000 feet of any 

public (or private) 

school 

Prohibits states and 

local boards from 

adopting basic 

instructional 

materials that 

provide 

unnecessary 

exposure to brand 

names, products, or 

company logos 

 

Colorado Regulation Prohibits the operation 

of competitive food 

service beginning onehalf hour before and 

ending one-half hour 

after the school’s 

breakfast and lunch 

period 

 Student editors 

determine 

advertising content 

of school-sponsored 

publications 

 Prohibits student 

participation in any survey 

without written parental 

consent 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 24 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Connecticut Regulation Prohibits sale of 

coffee, soft drinks, tea, 

and candy one-half 

hour before, during, or 

after lunch or breakfast

 

Florida Regulation Foods of minimal 

nutritional value can 

only be sold in 

secondary schools for 

1 hour after lunch 

 

 Statute Permits school boards 

to establish fundraising 

policies 

 Permits school 

boards to establish 

policies regarding 

advertising 

 

Georgia Regulation Prohibits sale of foods 

of minimal nutritional 

value in elementary 

schools until after 

lunch and in other 

schools during 

mealtime in the dining, 

serving, and kitchen 

areas 

 

Hawaii Statute Permits schools to 

have vending 

machines and 

concessions if 

operated by the blind 

or individuals with 

visual handicaps 

Prohibits the sale of 

cigarettes from a lunch 

wagon engaging in any 

sales activity within 

1,000 feet of any 

elementary or 

secondary school 

grounds 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 25 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Illinois Statute Prohibits the disclosure of 

a student’s name, address, 

telephone number, Social 

Security number, email 

address, or other personal 

identifying information to a 

business organization or 

financial institution that 

issues credit or debit 

cards 

 Regulation Elementary schools 

participating in the 

National School Lunch 

Program are prohibited 

from selling 

competitive food during 

breakfast and lunch 

periods 

 

 Statute Prohibits solicitation of 

students by certain 

private businesses or 

vocational schools 

unless approved by the 

superintendent 

 Prohibits certain 

private businesses 

or vocational 

schools from 

advertising for 

student enrollees 

unless approved by 

the superintendent 

 

Indiana Statute Prohibits the disclosure of 

a list of students enrolled 

in public school to a 

commercial entity where 

the governing body has 

adopted a policy that 

prohibits disclosure for 

commercial purposes or 

identifies categories or 

classes of commercial 

entities to which the list 

may not be disclosed 

Kansas Statute Permits student 

editors to determine 

advertising content 

in student 

publications 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 26 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Kentucky Regulation Prohibits selling any 

food outside the 

National School 

Breakfast or Lunch 

program until one-half 

hour after lunch period 

 

Louisiana Regulation Prohibits sale of 

competitive foods 

until the last 10 

minutes of each 

lunch and in food 

service areas 

Permits donor 

decals on school 

buses to 

acknowledge 

donations of cellular 

telephone service 

 

Maine Statute Permits school districts 

to fundraise for their 

benefit 

 

Maryland Statute Permits advertising 

on school bus 

shelters under 

certain restrictions 

 

Statute Requires school 

committee to 

establish a travel 

policy that addresses 

expectations for 

fundraising by 

students 

Massachusetts . 

Regulation Prohibits outdoor 

advertising of 

cigarettes within 

1,000-foot radius of 

any school 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 27 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Minnesota Statute Prohibits school 

boards from 

contracting for 

computer or 

related equipment 

that requires 

advertising to be 

disseminated to 

students unless 

parents are given 

the opportunity to 

opt their child out 

of exposure to the 

advertising 

A school board 

may contract with 

advertisers or 

others to sell 

naming rights and 

advertising rights 

to its school 

facilities 

Permits advertising 

on school buses 

under certain 

restrictions 

 

Regulation Prohibits selling any 

food item for 1 hour 

before a school meal 

Mississippi 

Statute Permits commercial 

advertising on 

protective textbook 

covers 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 28 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

 Statute Requires school 

boards to include a 

disclosure statement 

advising that a 

portion of the 

proceeds of 

fundraising activities, 

such as school 

pictures, cap and 

gown rentals, etc., 

authorized by a 

school board for 

which the board 

receives a 

commission, rebate, 

or fee shall be 

contributed to the 

school activity fund 

 

Nevada Statute Permits advertising 

on and in school 

buses 

 

Statute Permits advertising 

on school bus 

shelters 

New Hampshire 

Regulation Prohibits advertising 

on school bus 

exterior except for 

manufacturer’s logo 

 

New Jersey Regulation Prohibits selling food 

items of minimal 

nutritional value before 

the end of the last 

school lunch period 

 Prohibits advertising 

on the interior or 

exterior of buses 

except for 

manufacturer’s or 

vendor’s trade name

Permits advertising 

on school bus stop 

shelters subject to 

governmental 

approval 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 29 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Statute/ 

regulation 

 Commercial 

advertising 

permitted inside and 

on sides of school 

buses 

New Mexico 

Regulation Prohibits sale or use of 

personally identifiable 

information for marketing 

purposes unless parent 

consents in writing for 

legitimate educational 

purposes 

Statute Generally prohibits 

selling soft drinks and 

candy during school 

day until the last 

scheduled meal period 

New York 

Regulation Generally prohibits 

commercial 

promotional 

activities on school 

premises except 

where commercial 

entity sponsors a 

school activity which 

does not involve 

promoting the 

sponsor’s product or 

service 

 

 Statute Permits school 

boards to adopt 

instructional 

materials containing 

commercial 

advertising so long 

as the materials 

relate to the 

academic curricula 

North Carolina 

Regulation Prohibits the individual, 

or “a la carte,” sale of 

foods of minimum 

nutritional value and 

limits the sale of 

individual food items 

until after the 

established lunch hour 

has ended 

 Requires local 

school boards to 

assure that students 

are not regularly 

required to observe, 

listen to, or read 

commercial 

advertising 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 30 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

North Dakota Statute Requires school 

boards to approve 

fundraising involving 

students 

 

Rhode Island Statute Prohibits school 

officials from soliciting 

any pupil in any public 

school, generally 

prohibits the sale of 

commercial goods or 

services in schools, 

and requires school 

committee to issue 

rules related to 

fundraising activities 

 Prohibits the 

distribution to 

students of 

commercial 

materials unless 

approved by the 

local school 

committee 

 

Regulation Permits commercial 

advertising on 

school buses, in 

accordance with 

policy established 

by local school 

board 

Tennessee 

Statute Requires districts to develop 

a policy setting forth the 

rights of parents and 

students and guidelines for 

teachers and principals with 

respect to the administration 

of surveys, analyses, or 

evaluations of students 

Regulation Permits 

commercially 

sponsored high 

school athletic 

programs 

Texas 

Statute/ 

regulation 

 Permits advertising 

on the exterior of a 

school bus, provided 

that it does not 

distract from the 

effectiveness of 

required safety 

warning equipment 

 
Appendix II: State Statutes and Regulations 

Addressing Commercial Activities in Schools 

Page 31 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State 

Statutory/ 

regulatory 

provision 

Product 

sales Direct Indirect 

Marketing or 

market research 

Statute Requires each 

school board to 

develop a policy 

on commercial, 

promotional, and 

corporate 

partnerships and 

sponsorships 

involving public 

schools 

Requires each 

school board to 

develop a policy 

on commercial, 

promotional, and 

corporate 

partnerships and 

sponsorships 

involving public 

schools 

 

Statute Permits school 

boards to contract 

with commercial 

institutions for a 

telephone service or 

credit card that, 

without endorsing 

the product, bears 

the name of the 

school board, and 

provides a portion or 

percentage of the 

revenues to a fund 

established for a 

public school 

purpose 

 

Virginia 

Regulation All foods sold in school 

from 6:00 a.m. until 

after the breakfast 

period must be of 

sound nutritional value 

 

West Virginia Regulation Prohibits the sale of 

candy, soft drinks, 

chewing gum, or 

flavored ice bars 

during the school 

day, except that 

county boards may 

permit the sale of 

soft drinks in high 

schools except 

during the breakfast 

and lunch periods 

 

Source: GAO analysis. 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 32 GAO-04-810 Commercial Use of Student Data 

This appendix lists proposals addressing commercial activities in schools 

that have been introduced by some state legislatures between January 

2003 and February 2004. The data are taken from the Web sites maintained 

by state legislatures. Many of these sites are revised only periodically, and 

information on some is limited to the current legislative session. Therefore 

this information should be viewed as a rough snapshot, rather than a 

comprehensive analysis. 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Alabama • Would allow students to 

choose any photographer for 

yearbook pictures 

• Would prohibit schools from 

preventing a picture taken by 

that photographer from 

appearing in a yearbook if 

the picture meets the 

specifications of the 

yearbook staff 

 

Alaska • Would prohibit the sale of 

soft drinks from 8 a.m. 

through 5 p.m. in public 

schools 

 

Connecticut • Would set up a pilot program 

in which participating 

schools would be barred 

from allowing the sale of 

chewing gum and other 

specified foods and 

beverages 

 

• Would require public 

hearings prior to the 

completion of contracts 

between food vendors and 

public schools 

 

• Would call for a pilot school 

food nutrition program to test 

restricting beverages sold to 

schoolchildren to fruit juices, 

water, or milk and offer fruits 

and nonfried vegetables for 

sale at lower prices than 

other fooda

 

Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 33 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Georgia • Would prohibit the sale of 

soft drinks to students and 

consumption of soft drinks 

by students in school 

buildings and on school 

grounds, except in the 

school cafeteria, before and 

during school hours 

 

Hawaii • Would require vending 

machines in public schools 

to dispense only water, milk, 

and 100 percent fruit juice 

• Would allow schools 

to sell advertising to 

companies and other 

organizations, 

including selling 

advertising space at 

sports competitions 

and other space on 

school campuses 

• Would allow 

schools to accept 

donated supplies 

and equipment 

bearing logos, 

trademarks, 

labels, or any 

other image or 

mark representing 

a commercial or 

noncommercial 

organization 

 

• Would establish nutrition 

standards for beverages 

sold to students in public 

schools 

 

• Would require food and drink 

items in public school 

vending machines to comply 

with board of education 

standards 

 

• Would provide minimum 

standards for vending 

machine food and drink 

items 

 

Illinois • Would require revenue from 

vending machines that are 

not within the cafeteria to be 

used exclusively for physical 

education and nutrition 

education 

 

• Would prohibit soft drinks 

and candy from being 

dispensed to students by 

school vending machines. 

• Would require school boards 

to prohibit the sale of candy, 

soda pop, and chips at 

school or on school grounds 

• Would set requirements for 

beverages and foods sold in 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 34 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

school vending machines 

and requires the State Board 

of Education to prepare and 

distribute a list of products 

that meet the standards 

Kentucky • Would prohibit sales during 

the day through vending 

machines, school stores, 

canteens, or fundraisers of 

chewing gum, water ices, 

foods that contain more than 

40 percent added sugar by 

weight, and foods that 

contain more than 6 grams 

of fat per serving (except 

seeds and nuts) 

• Would prohibit an 

elementary school from 

selling soda waters during a 

school day; would require 

that at least 75 percent of 

the beverages sold in middle 

and high schools be healthy 

beverages, and would 

prohibit the sale of any 

beverage to students in 

competition with the School 

Breakfast Program and the 

National School Lunch 

Program 

 

Maine • Would ban chewing gum, 

candy bars, food, or drinks 

that contain 35 percent or 

more sugar or other 

sweeteners; juices that are 

less than 100 percent real 

fruit juice; and foods with 

greater than 8 grams of fat 

per serving. Would ban soft 

drinks from elementary and 

middle schools and soft 

drinks containing caffeine 

from high schools 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 35 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Maryland • Would require county boards 

of education to develop and 

adopt specific policies 

relating to vending machines 

in public schools and 

requiring each school to 

install and use timing 

devices on every vending 

machine 

• Would require that 50 

percent of all food and drink 

options available in vending 

machines be nutritious food 

and the price of foods of 

minimal nutritional value sold 

in vending machines to be at 

least 25 percent higher than 

the price of nutritious food 

 

• Would prohibit the sale of 

any beverages between the 

hours of 12:01 a.m. and the 

end of the last lunch period 

in public schools except 

water, fruit juices with at 

least 50 percent fruit juice, 

isotonic beverages that 

replenish electrolytes and do 

not contain more than 42 

grams of added sweetener 

per 20 ounce serving, or milk 

• Would prohibit the sale of 

food (except for school 

lunches) between the same 

hours if more than 35 

percent of the total calories 

per package are from fat, 

more than 10 percent of the 

total calories per package 

are from saturated fat, or 

more than 35 percent of the 

total calories per package 

are from sugar (except for 

fruits and vegetables) 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 36 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Massachusetts • Would prohibit vending 

machines containing soda or 

soft drinks in pubic school 

buildings or charter schools 

 

Michigan • Would require the number of 

milk vending machines to be 

at least equal to the number 

of soda vending machines in 

school buildings 

 

• Would require the 

department of education to 

promulgate rules providing 

healthy eating in schools 

that will apply to school 

meals, vending machines, 

and other food sales and 

ban the sale of chewing 

gum, candy bars, foods and 

drink containing more than 

35 percent sugar, food or 

drink containing more than 8 

grams of fat per serving, 

juice that is less than 100 

percent real juice, and soft 

drinks in elementary and 

middle schools 

 

Minnesota • Would ban contracts that 

allow the exclusive sale of a 

particular beverage brand, 

that prohibit the sale of a 

competing brand, include 

sales incentives, or limit the 

ability of schools to control 

the number and location of 

vending machines 

• Would prohibit the sale of 

nutritious beverages at a 

price per unit volume higher 

than the price per unit 

volume of non-nutritional 

beverages 

• Would require schools that 

sell packaged beverages to 

encourage students to drink 

milk and other nutritional 

beverages 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 37 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

New Jersey • Would prohibit the sale at 

public elementary or middle 

schools during the school 

breakfast or lunch period 

any soft drink or juice 

product that is less than 100 

percent fruit or vegetable 

juice, candy bars, hard 

candy or chewing gum, or 

any other food or drink that 

has more than 35 percent 

sugar or other sweeteners, 

or has more than 8 grams of 

fat 

 • Would require schools to 

receive written informed 

consent from parents or 

guardians and provide a 

document for reviewing 

before permitting students to 

participate in surveys, 

assessments, or evaluations 

that reveal certain types of 

personal information 

• Would permit students to 

participate in a voluntary 

survey if the district sends 

prior written notification to 

student’s parents 

New Mexico • Would prohibit the sale of 

foods of minimal nutritional 

value in the food service 

areas during school lunch 

periods 

• Would prohibit beverages 

other than water and 100 

percent fruit or vegetable 

juices from being accessible 

to elementary school 

students during the school 

day 

• Would require all vending 

machines located on school 

grounds to feature graphics 

of only 100 percent fruit or 

vegetable juices, water or 

educational programs 

 

New York • Would prohibit vending 

machines from selling 

certain foods and drinks, 

such as foods of minimal 

nutritional value on public 

school grounds or public 

school property 

 

North Carolina • Would call for a moratorium 

on soft drink contracts in 

schools 

 • Would prohibit the release of 

data from the student-testing 

program to any marketing 

organization without the 

express written permission 

of the parent or guardian 

• Would require schools to 

obtain written consent of the 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 38 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

student’s parent or the adult 

student before administering 

surveys or evaluations that 

collect certain personal 

information, and would 

require local school boards 

and their employees to the 

anonymity and 

confidentiality of students’ 

responses to such 

instruments 

Ohio • Would restrict beverages 

sold to students in grades 

kindergarten through 4 to 

milk and other specified 

beverages 

• Would restrict beverages 

sold to students in grade 5 to 

12 from one-half hour before 

school to one-half hour after 

the end of the school day 

• Would permit the sale of 

other beverages that do not 

meet nutritional standards if 

students are selling them as 

a fundraiser 

• Would restrict food sold to 

students in grades 

kindergarten to 4 to food 

meeting certain minimal 

nutritional standards 

 

Oklahoma • Would require the board of 

education to bar access to 

vending machines that 

contain food or soft drinks of 

low nutritional value by 

students in grades K-5 and 

limits access by students in 

grades 6-12 

 

South Carolina • Would ban the sale of foods 

and drinks that do not 

comply with federal 

standards 

• Would restrict the sale of 

foods to students outside of 

school meals to whole grain 

products and other specified 

foods and beverages 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 39 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Tennessee • Would restrict the sale of 

food items from sources 

other than the school 

cafeteria 

• Would require that drinks 

sold in elementary and 

secondary schools be limited 

to water, milk, 100 percent 

fruit juice, or a minimum of 

10 percent fruit-based 

drinks, and electrolyte 

replacement beverages 

• Would prohibit the sale of 

soft drinks in middle and 

high schools until 1 hour 

after the last lunch period 

 

Texas • Would ban the sale of 

competitive foods and 

beverages in elementary 

schools 

• Would restrict the sale of 

competitive foods at middle 

schools, junior high schools, 

and high schools to certain 

times of day, and would 

require food items to meet 

certain nutritional standards 

 

• Would ban the sale at 

elementary schools of any 

food or beverage not offered 

for sale as part of the regular 

school meal program 

• Would impose nutritional 

requirements on food offered 

for sale in secondary 

schools 

 

Utah • Would restrict products sold 

in vending machines in 

elementary schools to only 

those meeting federal 

nutritional standards 

 
Appendix III: Legislative Proposals 

Addressing Commercial Activities in Schools, 

February 2004 

Page 40 GAO-04-810 Commercial Use of Student Data 

 Advertising 

State Product sales Direct Indirect 

 Marketing and market 

research 

Vermont • Would prohibit the sale on 

school grounds from the 

time schools open until the 

end of the last school lunch 

period of any beverage for 

which any of the first two 

ingredients listed on the 

label are water and any type 

of sweetener 

 

Virginia • Would require the board of 

education to establish rules 

regarding vending machines 

in middle and high schools 

• Would ban schools from 

contracting for allowing or 

continuing to use vending 

machines selling soft drinks 

or solid foods having empty 

calories, high fat, high 

sodium, or high caffeine 

 

Washington • Would establish minimum 

nutritional standards for 

competitive foods sold in 

schools 

• Would limit the types of 

beverages that may be sold 

to pupils 

• Would ban the sale of foods 

with minimal nutrition value 

on school campuses during 

regular schools hours 

 

Source: GAO analysis of state legislature Web sites, February 2004. 

a

This provision was approved June 8, 2004, and became effective July 1, 2004. 
Appendix IV: Questionnaire: GAO Study on 

the Marketing and Selling of Student Data 

Page 41 GAO-04-810 Commercial Use of Student Data 

Appendix IV: Questionnaire: GAO Study on 

the Marketing and Selling of Student Data 
Appendix IV: Questionnaire: GAO Study on 

the Marketing and Selling of Student Data 

Page 42 GAO-04-810 Commercial Use of Student Data 
Appendix V: Comments from the Department 

of Education 

Page 43 GAO-04-810 Commercial Use of Student Data 

Appendix V: Comments from the Department 

of Education 
Appendix V: Comments from the Department 

of Education 

Page 44 GAO-04-810 Commercial Use of Student Data 
Appendix VI: GAO Contacts and Staff 

Acknowledgments 

Page 45 GAO-04-810 Commercial Use of Student Data 

Eleanor L. Johnson, Assistant Director (202) 512-7902 or 

johnsone@gao.gov 

Kathleen D. White, Analyst-in-Charge (202) 512-8512 or whitek@gao.gov 

In addition to those names above, the following people made significant 

contributions to this report: Susan Bernstein, Carolyn Blocker, Richard 

Burkard, Jim Fields, Behn Kelly, James Rebbe, and Jay Smale. 

Appendix VI: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(130337) 
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