Technology is transforming American education, for good and for ill. The good comes from the ingenious ways that teachers encourage their students to engage in science projects, learn about history by seeing the events for themselves and explore their own ideas on the Internet. There are literally thousands of Internet-savvy teachers who regularly exchange ideas about enlivening classrooms to heighten student engagement in learning.

The ill comes in many insidious forms.

One of the malign manifestations of the new technology is for-profit online charter schools, sometimes called virtual academies. These K–12 schools recruit heavily and spend many millions of taxpayer dollars on advertising. They typically collect state tuition for each student, which is removed from the local public schools' budget. They claim to offer customized, personalized education, but that's just rhetoric. They have high dropout rates, low test scores and low graduation rates. Some have annual attrition rates of 50 percent. But so long as the virtual schools keep luring new students, they are very profitable for their owners and investors.

Another dubious use of technology is to grade essays. Major testing companies such as Pearson and McGraw-Hill are using software to score written test answers. Machines can grade faster than teachers, but they cannot evaluate factual statements or the imaginative use of language. A student may write that the World War II began in 1839, and the machine won't object. Students will learn to write according to the formula that the machine likes, at the expense of accuracy, creativity and imagination. Worse, the teacher will abandon the important job of reading what his or her students write and will be less informed about how they think. That is a loss for the quality of education. Frankly, it is a problem with online assessment in general, as the job of testing is shifted from the teacher to a distant corporation; the last round of state testing saw computer breakdowns in several states. In addition, it is only a matter of time until students hack into the tests.

The most worrisome use of technology is to accumulate and store personal, confidential data about every public school student. The Bill & Melinda Gates Foundation put up close to $100 million to create the Shared Learning Collaborative, now called inBloom, with partners Wireless Generation (owned by Rupert Murdoch's News Corporation) and Carnegie Corporation. It will gather student data from several districts and states, including New York, Georgia, Delaware, Kentucky and Louisiana (some of these states are reconsidering because of objections from parents). The data will be stored on a cloud managed by Amazon. On the cloud will be students' names, addresses, grades, test scores, disability status, attendance, program participation and many other details about students that teachers and schools are not allowed to release.

Who needs all this personal information, and why is it being shared? Advocates say that the goal is to create better products for individual students. Critics believe that the information will be given or sold to vendors, who will use it to market products to children and their parents. No one knows whether the data will be secure; snoops frequently hack into databases and clouds.

Until recently, the release of personal student data without parental consent would have been prohibited by a 1974 federal law known as FERPA (the Family Educational Rights and Privacy Act). In 2011, however, the U.S. Department of Education revised the FERPA regulations, making this data project legal. The electronic Privacy Information Center (EPIC) has sued the Department of Education in federal court for watering down FERPA and allowing students' data to be released to third parties without parental consent.

Here is the conundrum: teachers see technology as a tool to inspire student learning; entrepreneurs see it as a way to standardize teaching, to replace teachers, to make money and to market new products. Which vision will prevail?