Low-performing students at John F. Kennedy High in La Palma must carry white cards. Proficient students get gold cards, and top performers get black cards.
Those with gold and black cards get special privileges, including their own line in the cafeteria.
Many parents and students say it's humiliating for kids with white cards.
State officials say the policy violates students' privacy rights, but adds that it's a local issue.
The Anaheim Union High School District says it is reviewing the program.