A face-off in New York State about the uploading of private student data to the cloud via education nonprofit inBloom Inc. will get its day in court soon.

On Jan. 10, a lawsuit filed by 12 parents seeking a restraining order will be heard in state Superior Court. The parents want to prohibit the state from moving data about individual student performance, attendance, suspensions, and eligibility for special education to the cloud.

New York state’s education department is still pursuing plans to proceed with inBloom, which at one time said it had formed partnerships with nine states, although officials in Delaware, Georgia, and Kentucky told Reuters in May that they had never forged an official alliance with the organization. All the other states except New York have since withdrawn, placed plans on hold, or, as in the case with Illinois, made participation optional—most due to concerns raised by various constituencies about the security of the data once it is housed in the cloud. (Chicago Public Schools recently decided to handle its student data on its own.)

Funded with $100 million from the Bill & Melinda Gates Foundation and the Carnegie Corporation of New York, inBloom formed a cloud-based database to help districts and teachers integrate and manage data across various educational applications, with the goal of using that data to power more personalized instruction for students. (Education Week receives financial support from the Carnegie Corporation of New York and the Gates Foundation for its coverage of the education marketplace and innovation in education.)

At one point, the organization indicated to the Atlanta Business Chronicle that it had 21 ed-tech companies ready to develop applications that would work with its technology. Startups have seen it as an appealing partner.

While the New York conflict continues, the most recent development came from Democrats in the New York Assembly. Assembly Speaker Sheldon Silver and Catherine Nolan, who chairs the state’s education committee, released a statement about a letter they sent to John King, state education commissioner, “expressing serious concerns about a plan to share sensitive student data with an outside vendor.” The letter was signed by nearly 50 of their colleagues in the Assembly.

“It is our job to protect New York’s children. In this case, that means protecting their personally identifiable information from falling into the wrong hands,” said Silver in the statement. “Until we are confident that this information can remain protected, the plan to share student data with InBloom must be put on hold.”

So far, the state education commissioner’s office isn’t budging. The press office for the commissioner responded to an inquiry with the following statement, which was issued by Dennis Tompkins, a spokesman for the state education department: “While we continue to have the strongest confidence in the security of the EngageNY Portal and the privacy protections it will afford, we will of course review all of the concerns raised by the Speaker and the Chairwoman and will continue to work with them on this critically important matter.”

The state partnered with inBloom as part of the EngageNY Data Portal, which aims to provide parents and teachers with real-time data and content personalized for individual students. Currently, all New York schools receiving Race to the Top funding must participate in the portal.

Critics remain concerned, but not just about inBloom.

“inBloom is not the only threat to student privacy,” said Leonie Haimson, executive director of Class Size Matters, a New York-based education advocacy organization which is organizing much of the opposition against the nonprofit. “A lot of other vendors are very eager to get their hands on private student data.”

While the state battle continues, Ms. Haimson has set her sights on a federal front as well. “We will be looking to Congress to rewrite FERPA (the Family Education Rights and Privacy Act,)” she said.