Published reports say New York State officials, working with the city, have already uploaded students' names, addresses, test scores, learning disabilities, attendance and disciplinary records into the inBloom database.
Educational companies can use the data to create teaching tools for students.
State Education Department officials say no data will ever be sold.
The New York Civil Liberties Union blasted the city for failing to disclose the plan to the public or offer parents a chance to opt out.
Public Advocate Bill de Blasio protested the move in a letter to city and state officials.