Data on pupils' nationality now being collected by schools will be not passed to immigration officials or the Home Office, the government has said.
Instead, it will be used to assess the impact of immigration on schools.
Schools in England were asked to start collecting this information in September, leading to fears it may be used to find illegal immigrants.
Campaigners have written to Education Secretary Justine Greening to ask her to axe the data collection plans.
A Department for Education spokeswoman said: "Collecting this data will help ensure our children receive the best possible education.
"It will be used to help us better understand how children with, for example, English as an additional language perform in terms of their broader education, and to assess and monitor the scale and impact immigration may be having on the schools sector.
"Data on pupils' country of birth, nationality and level of English proficiency is collected through the school census in line with the national population census.
"These data items will not be passed to the Home Office.
"They are solely for internal Department for Education use for analysis, statistics and research."
An earlier letter to Ms Greening from at least 20 organisations said: "Without assurances to the contrary, our grave concern is that the new data collected will be shared with the Home Office and therefore potentially used for immigration enforcement purposes.
"We have already seen data sharing between the Home Office and other departments increase since the government announced its commitment to creating a 'hostile environment' for undocumented migrants.
"Such measures deter vulnerable children and families from accessing essential services, exercising their human rights, and participating on an equal basis in our communities."
Under the new expanded census, schools are, for the first time, asking parents to say which country their child was born in.
Disclosure is not compulsory, but a report by Schools Week found many schools were demanding copies of pupils' passports amid confusion about the new stipulation.
Gracie Mae Bradley, from Against Borders for Children, which is leading the campaign to have the policy overturned, urged parents to boycott the data collection.
She said: "School should be a place where all children are treated equally.
"In the context of a 'hostile environment' in which employers, landlords and even healthcare workers are being turned into border guards, we believe this new requirement could be used to add school administrators to the list.
"We are also deeply concerned that this data will be made available, without time limit, much more widely outside the schools system, which cannot be acceptable.
"Over the coming weeks we expect the organisations opposing this divisive approach to be joined by many more and for parents and schools to join the boycott and protect young people from this dangerous threat to their privacy."