What happens if a school fails to comply with FERPA regulations?

When a school fails to comply with FERPA regulations, they can face penalties, which is why this answer is correct. FERPA (Family Educational Rights and Privacy Act) is a federal law that protects the privacy of student education records. Schools that do not adhere to its requirements could potentially lose federal funding. The law mandates specific guidelines regarding the handling and access to student records, and non-compliance can lead to serious consequences, including fines or the loss of eligibility for federal student financial assistance.

In contrast, the other options suggest scenarios that are not accurate. Schools are not rewarded with awards or guaranteed additional funding for non-compliance, and FERPA is a federal law, making it mandatory rather than voluntary. Compliance is essential for maintaining federal funding and protecting student privacy rights.