This is a bit old considering it went into effect in January. Since then, there has been very warranted backlash against the bill. Currently, there are two bills pending to alter the law and limit it's applications. The first one seeks to limit the law by stating that the only permissible circumstances in which a school can be said to have reasonable cause to request a password is when a victim or concerned party, such as a parent, makes a complaint, or school personnel observe an abuse:
http://www.ilga.gov/legislation/99/HB/09900HB3527.htmThe second pending amendment changes the law so that schools can only
request a password, and only require it
upon a court order:
http://www.ilga.gov/legislation/99/HB/09900HB4082.htmThe second bill does a lot more to limit the scope of the law. Also note that this law only applies to schools in allowing them to ask for the password, it does not require anyone to actually turn over their password. And the obvious response to this is "Get bent." You can probably mention that it's a violation of the TOS too if you wanted to have an actual reason not to comply. No way in hell I'd let my kid turn over their password. If there's a suspected abuse, the school can bring it to my attention, and I will handle it.
I personally think this law as it is written right now is a slam dunk overturn on the first court challenge. If the second pending amendment passes, it's no longer an issue because schools can request the password all they want, but they can't require it without a court order, which is basically how it was before this law went into effect.