Outsourcing Student Email - Security Concerns?

[Allen Wood <awood () HILLCOLLEGE EDU>]

Hello all,

I work for a small community college and we're currently running Exchange 2010 for student email.  Our VP likes the 
idea of using Google Apps for Education (or Microsoft's Live@edu) and freeing up that mail server for something else.  
I am leery of making the move and basically putting the student's Active Directory accounts in someone else's hands. I 
would think there are also possible compliance issues, but I haven't really studied that side of it yet.

Have any of you ever made either side of this argument before?  If so, would you mind sharing any info that you may 
have available that may help us decide outsourced vs. locally hosted, and maybe even Google vs. Microsoft?

Thanks in advance for any info-

Allen Wood