I would sue the teacher and school if this happened to me… total BS. Also plagarism and having other people do your work, or even take exams for you is as old as time. How is AI any different? Some trust is in order here. The students are the ones paying to be educated, if they cheat they are only cheating themselves anyways.
I've heard people say this a lot. It's a very old-school liberal arts perspective that doesn't fit with the modern world. In practice, for most students, education is a third-place benefit of university behind 1. the certificate and 2. networking.