The growing use of generative AI (GenAI) in higher education has led institutions to develop policies governing its applications. However, we have little knowledge about how teachers and students adapt and adhere to the policies. In this paper, we analyzed GenAI policies from 101 U.S. universities, identifying nine recurring rules for GenAI use, and interviewed 20 students and 20 faculty members about the rules. We find that the wording of the rules can change how students perceive and act on the rules while introducing different challenges that teachers face in enforcing them in practice. For example, rules such as "Passing off AI-generated content as your own constitutes academic dishonesty" and "Students are accountable for any inaccurate, biased, or unethical content" both outline the acceptable use of AI, but the former can make students hide their use of AI out of fear of unwanted scrutiny, whereas the latter can encourage students to take responsibility and ownership of their use of AI and be more transparent. Students described uncertainty about acceptable use, fear of penalties and unfair treatment, and stigma that discouraged acknowledging AI use. Teachers took on approval workload, had to interpret acceptable use, and lacked reliable ways to verify compliance. We summarize these impacts in a policy-impact matrix linking each rule to its effects on teacher and student workflows and perception.

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