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The rapid integration of generative AI tools in higher education presents new challenges for assessment, integrity, and student agency—especially online. This study explores graduate students’ experiences in an asynchronous course designed using the AI Assessment Scale (AIAS), a five-level framework for setting clear AI use expectations. Drawing on data from a mid-course survey (N = 65) and the AIAS Learner Experience Survey (N = 60), we examined students’ understanding, ethical awareness, and confidence in AI use. Results showed high clarity and strong support for responsible experimentation and disclosure. When embedded in a reflective, constructivist course model, AIAS helped normalize ethical AI engagement, offering a replicable framework for supporting transparency and literacy in online graduate education.