From an EPIC Blog Post:
In a sworn statement filed with a federal court, Google has admitted to scanning student emails to serve students targeted advertisements. Although Google does not display ads in Apps for Education, Google “does scan [student] email” to “compile keywords for advertising” on Google sites.
Google has gained access to student emails pursuant to the Education Department’s recently revised regulations, which significantly weakened the Family Educational Rights and Privacy Act, a federal student privacy law. Still, Google’s practices appear to contravene the Education Department’s “best practices” for online educational service providers.
More From the Electronic Privacy Information Clearinghouse (EPIC):
More Info, Background
Greg Sterling at Marketing Land: Google Seeking To Keep Depth Of Gmail Scanning Confidential (March 17, 2014)