Profound educational transformations occur due to Emotional Artificial Intelligence, which recognizes emotions in real time while developing personalized learning strategies. The paper systematically evaluates how Emotional AI systems foster student motivation while helping improve their retention levels. AI tools, including intelligent tutoring systems (ITS) and chatbots, utilize personalized learning methods while enhancing student engagement and detecting at-risk students through early intervention measures. Various privacy-related issues, algorithmic prejudice, and moral obstacles continue to impede progress. The lack of long-term study results limits research on AI’s lasting effects on education. The research findings indicate the use of privacy-conscious frameworks, bias reduction methods, and appropriate human oversight of AI systems in educational environments. Future studies need to be conducted in the form of long-term studies combined with ethical research on AI deployment. The research helps educational institutions establish ethically sound standards for implementing Emotional AI while maintaining its effectiveness.