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Sophia now offers a password protection feature for assignments, enhancing security for proctored exams and allowing instructors to control access until they're ready to open them. To use this feature, access the assignment in the locker and edit it in the policy manager, where the password protect option is available. This allows instructors to distribute the password to students at their discretion, ensuring assignments remain closed until intended. The tutorial demonstrates how to set up a password-protected assignment, ensuring it integrates with standard features.