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In a mixed-method research conducted on the East Coast, 110 university students were surveyed and 10 were interviewed to understand their perceptions of generative AI (GenAI) and its impact on literacy practices and development. Findings indicate a strong appreciation for GenAI's role in enhancing personalized literacy support and aiding in literacy development. However, concerns about accuracy, privacy, and broader academic and professional implications were also raised. Drawing from literacy theories and John Biggs’ 3P model, the study emphasizes the influence of students' perspectives on literacy practices, strategies, and development outcomes. These insights offer a foundation for crafting policies that effectively integrate GenAI into higher education's literacy programs, ensuring benefits are optimized while addressing student concerns, ultimately enriching literacy-focused academic experiences.