State Imposes $5.1M Penalty on Firm for Data Breach Impacting 3 Million Students

Data Privacy,
Data Security,
Healthcare

State Authorities Highlight Security Lapses Leading to Illuminate Education’s Late 2021 Data Breach

States Fine Firm $5.1M in Hack Affecting 3 Million Students
Illuminate Education faces a $5.1 million settlement after a cyberattack in late 2021 that compromised data of over 3 million students. (Image: Illuminate)

A California-based education technology company, Illuminate Education, has been fined $5.1 million by attorneys general from three states following a significant data breach that occurred in late 2021. The incident affected approximately 3 million student records, including sensitive information pertaining to children with disabilities and special educational needs.

In a structured settlement with California, Illuminate has agreed to pay $3.25 million, while New York and Connecticut will receive $1.7 million and $150,000, respectively. The compromised data comprised personal details such as student names, race, and special education statuses, highlighting serious lapses in data security.

The breach showcased several vulnerabilities within Illuminate’s cybersecurity framework. Settlement agreements reveal that student data stored on Amazon Web Services (AWS) was compromised due to inadequate safeguards. Notably, the attackers exploited outdated access credentials associated with a former employee, granting them unauthorized access to sensitive information stored in Illuminate’s AWS environment.

During a two-day window in late December 2021, sophisticated probing by attackers using stolen access keys enabled them to penetrate Illuminate’s systems. The subsequent data exfiltration involved compromising numerous database backups containing vital student data, which were not encrypted at rest. Illuminate was also criticized for lacking a robust monitoring system to detect malicious activities during the attack period.

Following the breach, Illuminate engaged a cybersecurity expert to conduct a forensic analysis, which confirmed that the attackers maintained access to the compromised AWS account for a significant period. Although the company activated AWS’s threat detection tool, GuardDuty, it failed to act on alerts regarding anomalous activities identified in the compromised account.

The incident has prompted concern among state officials, with California Attorney General Rob Bonta remarking on the unsettling security deficiencies that should not exist in organizations responsible for managing sensitive data about minors. Similarly, New York Attorney General Letitia James labeled the breach a violation of trust, emphasizing that educational platforms should prioritize the safety and security of student data.

Connecticut’s action marks the first settlement reached under its Student Data Privacy Law, which mandates stringent data security measures for online educational providers. Since acquiring Illuminate in 2023, Renaissance Learning has integrated Illuminate’s products into its cybersecurity initiatives, reinforcing data protection strategies.

Illuminate currently manages the data of 17 million students across more than 5,200 schools nationwide. Despite the enforcement actions from state attorneys general, the company is also facing a proposed civil class action lawsuit related to the same breach. However, a California federal court dismissed the case in 2023, a decision upheld by the U.S. Court of Appeals.

As businesses navigate the evolving landscape of cybersecurity threats, the Illuminate breach serves as a stark reminder of the ongoing challenges organizations face in safeguarding sensitive information. The tactics and techniques utilized by the adversaries align with several categories in the MITRE ATT&CK framework, notably initial access through credential compromise and lack of effective monitoring systems, underscoring the imperative for robust cybersecurity strategies.

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