Students cheat when grades are more valuable than knowledge.

And then they complain when they gain no knowledge, can't pass the simplest of coding interviews despite their near 4.0 GPA, and blame it all on AI or whatever.

In reality, they cheat when a culture of cheating makes it no longer humiliating to admit you do it, and when the punishments are so lax that it becomes a risk assessment rather than an ethical judgment. Same reason companies decide to break the law when the expected cost of any law enforcement is low enough to be worth it. When I was in college, overt cheating would be expulsion with 2 (and sometimes even 1 if it was bad enough) offenses. Absolutely not worth even giving the impression of any misconduct. Now there are colleges that let student tribunals decide how to punish their classmates who cheat (with the absolutely predictable outcome)

I knew some hardcore, dedicated cheaters in college. All of them hit a wall where their cheating tricks stopped working. Most of them couldn't get back on track.

I suppose there are other fields where the degree might be used mostly as a filtering mechanism, where cheating through graduation might get you a job doing work different than your classes anyway. However, even in those cases it's hard to break the habit of cheating your way around every difficult problem that comes your way.

So, what is your solution to turn teenagers and 20-somethings into wise men and women?

This is not hitting the problem. Most students in universities are completely fine with awful grades or expect comical levels of grade inflation. Ask a professor or TA and you'll hear about an insane level of entitlement from students after they hand in extremely shoddy work. Failing students is actually quite hard or extremely discouraged by admins.

The real problem is students and universities have collectively bought into a "customer mindset". When they do poorly, it's always the school's fault. They're "paying customers" after-all, they're (in their mind) entitled to the degree as if it is a seamless transaction. Getting in was the hardest part for most students, so now they believe they have already proven themselves and should as a matter of routine after 3-4 years be handed their degree because they exchanged some funds. Most students would gladly accept no grades if it was possible.

Unfortunately, rather than having spines, most schools have also adopted a "the customer is always right" approach, and endlessly chase graduation numbers as a goal in and of itself and are terrified of "bad reviews."

There has been lots of handwringing around AI and cheating and what solutions are possible. Mine is actually relatively simple. University and college should get really hard again (I'm aware it was a finishing school a century ago, but the grade inflation compared to just 50 years ago is insane). Across all disciplines. Students aren't "paying for a degree", they're paying to prove that they can learn, and the only way to really prove that is to make it hard as hell and to make them care about learning in order to get to the degree - to earn it. Otherwise, as we've seen, the value of the degree becomes suspect leading to the university to become suspect as a whole.

Schools are terrified of this, but they have to start failing students and committing to it.