The growing incorporation of Artificial Intelligence in educational systems elicits weighty ethical considerations on bias and fairness. This chapterlooks into the psychological implications of the use of AI in education with a specific focus on bias and unfairness throughout the design and implementation of AI technology. The study is a research synthesis that takes a qualitative approach to reviewing available literature on the topic, including its socio-economic and cognitive impacts on students. An analytical perspective provided by the study helps identify thematic concerns and challenges related to AI-driven educational tools, underlining the need for deliberate and ethical considerations during development. The findings stress that issues concerning ethics need to be responded to proactively so that inequities within education are not perpetuated. In broader terms, it provides a basis for well-informed discussions along with recommendations toward attaining fairness in AI applications within educational settings.