Proposed legislation in California preventing student data collected through education technology software from being sold for profit could be a big blow to the $8 billion EdTech industry.

California state senator Darrell Steinberg will introduce legislation Thursday that would create privacy and security protections for the personal data of students in elementary through high school, The New York Times reports

The bill would prohibit education software, websites, services, and mobile apps and games from sharing, storing, or using the personal data of California students for commercial purposes. Collected student data--including names, ages, addresses, family financial details, medical background, and even lunch preferences, academic progress, and disciplinary records--could be used only for what the schools intend or for product maintenance, the Times reports.

EdTech companies also would be required to encrypt the student information they collect and delete records after a student graduates or leaves the school.

Steinberg, a Democrat, says he isn't trying to hurt the companies' business, but rather to protect students' data from being exploited.

"We don't want to limit the legitimate use of students' data by schools or teachers," Steinberg tells the Times. "We just think the public policy of California should be that the information you gather from students should be used for their educational benefit and for nothing else."

There are many startups that don't sell student information, but some entrepreneurs say they don't see how the bill and the EdTech industry's business model can have a symbiotic relationship.

Shashi Mudunuri, the CEO of Research Square, an Inc. 5000 company that develops research software and services for PhDs, tells Inc. that he doesn't know how EdTech companies can continue working with young students if the bill passes.

"I like the idea of protecting our children's information, especially since they are at a young enough age where they don't even know the kind of information they are giving out," Mudunuri says. "I am not sure if there is a way to have a responsible business model while gathering information from children."

Let us know what you think in the comments below. Is legislation necessary to protect children's academic information?