The use of Generative Artificial Intelligence (GenAI) is changing how learning happens in higher education. While new teaching approaches are emerging, concerns about academic integrity are also increasing. This study examined how students understand and use GenAI by looking at their knowledge, practices, attitudes, and perceived challenges, as well as selected demographic factors. The study also noted that gathering data about the factors influencing GenAI adoption was difficult. Results from multiple regression analysis showed an unexpected finding: students’ attitudes toward GenAI were the only factor that significantly predicted perceived difficulties. Students who were more interested in and positive about GenAI were also more likely to recognize and confront its major challenges, such as ethical concerns, inaccurate information, and overdependence on AI. In contrast, basic knowledge and simple usage practices did not predict awareness of these issues. These findings suggest that higher education institutions should shift away from overly restrictive policies and instead provide structured, ethics-centered, and required AI literacy programs. Future research should use long-term designs to determine cause-and-effect relationships, conduct qualitative studies to better understand the identified challenges, and examine differences across academic disciplines to improve teaching approaches.