Just to remind everybody that this is not a private conversation. I believe that search engines survey these pages. Deliberate violation of copyrights, performance rights, etc., may get you in hotter water than inadvertent violations. (I think I learned on the COW that certain tv networks do not generally show halftime performances at basketball and football games, in large part because of licensing concerns. When music is played in an arena during a timeout, and can’t be avoided in the background, I think there is some reasonable exception made. I recall something about six seconds of music “clean” being okay. But I’m way beyond my depth here and could be wrong. Basically, you can ALWAYS be sued — it’s just a matter of minimizing the plaintiff’s likelihood of (1) noticing you and (2) having a good case.)
If it were my doing, and the graduation involved any large number of people, I’d be careful — get releases, ascertain whether the music and arrangement are public domain, and edit the piece to minimize or eliminate any potential problem. At some point, if you have significant assets, and you decide that you need to do more research than the project is worth, I think you have to tell the client to go get another producer.
And as a proud Baltimorean who took several school field trips to brave little Fort McHenry, may I remind you that the Star Spangled Banner is a splendid song. If you think it’s a little too martial, you should check out Maryland’s state song, which basically refights the Civil War from the side of the Confederacy. And if you think it’s unsingable… get a better artist.