Both the ACLU and the state legislator who wrote the anti-cyberbullying law say there is no law that requires students to turn over their passwords.

http://www.huffingtonpost.com/...

No. Read the law again. It requires elementary and secondary school officials to send a privacy notice ("notification") to parents that says that they can demand passwords. it does not actually grant them any authority to demand passwords. Big difference. They have to send the privacy notice whether or not it is true.
By the way, be careful reading the law. All except section 15 apply to "post-secondary" schools. Post-secondary schools are colleges and similar trade schools.

Read Section 15. Read Section 15. Section 15 is the reason some school districts sent out a letter saying they can demand password. NOTHING in this law gives them the power to actually demand them. But Section 15 requires the schools to send a letter (or use a different means of communication) saying they can demand the password. That's why the schools mailed the notice and that's why all this bullshit started. >Sec. 15. Notification. An elementary or secondary school must provide notification to the student and his or her parent or guardian that the elementary or secondary school may request or require a student to provide a password or other related account information in order to gain access to the student's account or profile on a social networking website if the elementary or secondary school has reasonable cause to believe that the student's account on a social networking website contains evidence that the student has violated a school disciplinary rule or policy. The notification must be published in the elementary or secondary school's disciplinary rules, policies, or handbook or com

This law compels them to say so. http://www.ilga.gov/legislatio... (See Section 15,) But it does not actually empower them to require the passwords.

There is a different law. Right to Privacy in the School Setting Act requires school districts to send a warning to parents that the school may require children to disclose their passwords. The cyberbullying law has absolutely nothing to do with this. Ignorant journalists and bloggers have latched onto this cyberbullying law and are spreading this bullshit. The Privacy Act, while requiring schools to send a warning to parents, does NOT empower the schools to actually demand passwords from students. http://www.ilga.gov/legislatio... See Section 15.