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Of course they retain a copy; that's part of how they detect plagiarism. It's been ruled fair use in the US [1], and if it hadn't it would be in the terms and conditions. You can opt out of retention on TurnItIn, but it's the default.

[1] https://www.turnitin.com/blog/top-15-misconceptions-about-tu...

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Does it satisfy FERPA? If my paper were in their database, and all or part of it was revealed to another student in the process of claiming a match, that would be a violation of my FERPA rights.

Only if it was personally identifiable.

I think that ruling is only for the Fourth Circuit.

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