Just thought I'd pass on some emails from Google responding to changes of Terms of Service for GAFE that were posted to one of my Google certification groups.

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Hi everyone! 

Thanks for asking about the changes.  First, I recommend reviewing our official blog post and updated privacy policies page for more background and information on our updates to privacy policy and terms of service.

Google Apps users will not have to accept any new ToS agreements. If you have enabled any consumer apps on your domain your users may see notifications about the updated privacy policy, mostly in the form of a yellow butter bar at the top of their screen or a notification on the google.com home page. The butter bar may show up on Google Search, YouTube, iGoogle, Maps, News, or Translate. Google Apps users will not receive an email in their account as an email was sent to the primary admin. Users may receive email notifications to their personal consumer @gmail.com account, however. 

This new privacy policy does not change the contractual agreement for Google Apps. Therefore, the updated Terms of Service do not change or supercede the terms of your Google Apps agreement. The new ToS explains that if users have a Google account and are signed in, we may combine information they've provided from one service with information from other services. We're not changing how any personal information is shared outside of Google or the measures we take to protect information. Google will continue to honor confidentiality and security obligations provided to your domain. 

I hope this helps to clarify. 

Thanks!
Julia

Here's the public statement that you can share directly with districts.  It is from the VP of Enterprise, Amit Singh:

“Enterprise customers using Google Apps for Government, Business or Education have individual contracts that define how we handle and store their data. As always, Google will maintain our enterprise customers’ data in compliance with the confidentiality and security obligations provided to their domain. The new Privacy Policy does not change our contractual agreements, which have always superseded Google’s Privacy Policy for enterprise customers.”

Thanks!
Julia

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