--- title: "FERPA and AI: Seven Questions to Ask Any Vendor" description: "Half the foundations we surveyed are experimenting with AI in stewardship. Only 15% use it regularly. Seven questions to ask vendors about FERPA and AI." canonical_url: "https://www.awardspring.com/blog/ferpa-ai-scholarship" markdown_url: "https://www.awardspring.com/blog/ferpa-ai-scholarship.md" --- [Blog](https://www.awardspring.com/blog) [AI & SpringIQ](https://www.awardspring.com/category/ai-springiq) # Half of the foundations we surveyed are experimenting with AI. Only 15% use it regularly. The AwardSpring team · November 5, 2026 · 3 min read ![An aid administrator alone at a desk with a stack of student folders under a brass lamp at dusk.](https://www.awardspring.com/_astro/ferpa-ai-scholarship.BMTlbPja_ZqgUtI.webp?dpl=dpl_2JXk5Tv2Z14Nn4auZvGX8z78NaaB) The AwardSpring team Student information raises a hard question early. Here are seven questions to put to any vendor before you turn AI on. In our [2026 Donor Stewardship Benchmark](https://www.awardspring.com/stewardship-benchmark), we surveyed 125 foundations between February and April about how AI fits into stewardship work. Fifteen percent use AI regularly, 35% have tried it inconsistently, 31% are interested but have not started, and 19% have no interest. Put the first two together and half are experimenting. Respondents are AwardSpring customers, so read the numbers as a view of foundations that already use dedicated scholarship management software, not the whole field. Among that experimenting half, the most common uses are personalized donor cover letters (67%), fund impact summaries (48%), editing student thank-you letters (41%), and drafting student bio narratives (37%). Two of those four typically involve student writing or student details, and that is where questions about FERPA tend to come up. ## What FERPA covers FERPA, the Family Educational Rights and Privacy Act of 1974, protects student education records. The law does not mention artificial intelligence, so teams have to map a 1974 statute onto a 2026 tool. Scholarship files often hold student information, such as applications, essays and award details. Whether FERPA applies to your records, and which ones it reaches, depends on your organization and how it maintains them. That is a question for your general counsel. The open question for most teams is which systems now touch those records. ## Where AI touches a scholarship record The percentages above describe stewardship uses. The framework below is a general one for any AI use that touches student records. Three places, and each carries a different risk. 1. **Reading.** Anything that scores, summarizes, or flags an application is reading student application material, which your counsel may treat as an education record. 2. **Moving.** Whether that record leaves your vendor's environment, and whether it is used to train a model outside it, are two questions worth asking. 3. **Deciding.** Whether output influences an award, and whether a person reviewed it, affects whether you can explain the decision later. ## Seven questions to ask any vendor Ask for the answers in writing. They apply to any vendor. 1. Does student data leave your environment to reach the model? 2. Is our data used to train models that serve other customers? 3. What is retained after the request completes, and for how long? 4. Can we turn each AI feature off independently? 5. Who on our staff can see the output, and can students see it? 6. Is there an audit trail showing what the AI produced and who acted on it? 7. Where is the documentation we can hand our general counsel? ## Where to start Pick one workflow. Answer the seven questions in writing, bring in your general counsel, and turn the feature on at the level of oversight your team is comfortable defending. Expand from there once you can show how a decision was made. None of this is legal advice. Your general counsel can advise on what FERPA requires for your organization, and these questions give that conversation something specific to work from. The AI adoption findings are in the [2026 Donor Stewardship Benchmark](https://www.awardspring.com/stewardship-benchmark?utm_source=blog&utm_medium=organic&utm_campaign=thought-leadership&utm_content=ferpa-ai-scholarship). ## Frequently asked questions ### Does FERPA prohibit using AI to review scholarship applications? FERPA does not address AI directly. It concerns student education records, so the questions that matter are where those records go, who can see what the tool produces, and whether a person remains accountable for the decision. Whether a particular use is permitted depends on your organization's circumstances, and that is a question for your general counsel. ### What should we ask a scholarship software vendor about AI? Start with whether student data leaves their environment, whether it trains models serving other customers, what is retained, whether each feature can be disabled independently, and whether there is an audit trail you could review. Tags AI under human review ## Related posts - [AI & SpringIQ What SpringIQ Changes About Donor Stewardship](https://www.awardspring.com/blog/springiq-donor-stewardship) - [Donor Stewardship Seven findings on the state of scholarship donor stewardship](https://www.awardspring.com/blog/2026-donor-stewardship-benchmark) Author The AwardSpring team Related posts - [AI & SpringIQ What SpringIQ Changes About Donor Stewardship](https://www.awardspring.com/blog/springiq-donor-stewardship) - [Donor Stewardship Seven findings on the state of scholarship donor stewardship](https://www.awardspring.com/blog/2026-donor-stewardship-benchmark)