Can FERPA or privacy laws be used to censor medical information on my college transcript?
I shared my question on avvo.com, which is a website that connects individuals with experienced lawyers amongst other things. Two education law attornies from Colorado and Massachusetts responded to my question on avvo.com:

No, FERPA does not give you any authority to control what appears in your educational records. It limits who the school can release your records to, but it does not direct what information the school keeps in your records.


No. A medical withdraw is not, in and of itself, a type of confidential information as that status is generic in nature. The school would be prevented from disclosing the specific nature of the medical issue (that is more a [HIPAA] issue). As stated in the other answer, FERPA control who can see your educational records, it doesn't necessarily control the content. The issue is like credit reporting. A person's credit report can contain medical debt that is in collection. The mere fact that a person sought medical treatment or has medical issues is not confidential.

Reference:
https://web.archive.org/web/20200819212608/https://www.avvo.com/legal-answers/can-ferpa-privacy-laws-be-used-to-censor-informati-4958767.html