As far as public education, yeah Kagi doesn't have the legal and compliance framework to even attempt. You'd also need to provide an alternative to the whole docs/drive/etc ecosystem.

For like colleges though, I think there's a more viable path — I can't see their purely per-seat pricing model working though; and is also the problem I see with their "teams" plan. The better way there is to either provide a hybrid and/or totally ala carte pricing model, one where you pay per seat and also get a number of searches added to the whole plan ($3/seat + 250 searches); and another where you don't have seats and instead just accumulate searches and pay at the end of the month based on your search volume. Otherwise the upfront $10/user seat costs in their current billing are hard to justify.