At Simon Fraser University in Burnaby, B.C., there is now a grade of FD, considered lower than F, for a students found guilty of egregious cases of academic dishonesty. (http://www.calgaryherald.com/university+adds+grade+worse+than/1890672/story.html)
In contrast, at California community colleges, "...it is not permissible to give a student either a failing grade or an incomplete because a student has cheated on a particular assignment" no matter how egregious the offense (http://www.cccco.edu/Portals/4/Legal/opinions/attachments/07-12.pdf ).
Here are two tales from my campus in the 2008-2009 academic year. In the first, a student paid a ringer $1000 (yes, one thousand US dollars) to sit next to him during a calculus exam, and also paid $100 to each of several other students in class just to sit in seats surrounding the two principals. When the ringer completed the exam (early), a pre-planted cellphone went off. It took the instructor some time to locate the cellphone, which was stashed in a trash can. While the instructor was thus distracted, the ringer handed off his completed exam to the cheater, who then copied answers in his own handwriting . The ringer was not enrolled in the course (someone dropped from the class that day) and simply did not turn in an exam. We learned of the scheme because one of the $100 classmates confessed.
In the second case, an online student paid $100 for a ringer to take an elementary algebra quiz. We learned this from the ringer, who forwarded to the math department chair an email from the cheater detailing the instructions for taking the quiz and proposed payment--the ringer was outraged because the cheater "was suppossed [sic] to pay me $100 for the same which he didnt [sic]."
In neither case could the instructor assign a grade of F. The calculus student passed and the algebra student dropped the course.
And by the way, unless your school is so small that the instructors know all the students on campus, you probably have students on your campus taking classes for others.
Here's how the scam works.
Abe and Bob both sign up for English 1 and Math B, but different sections of each subject. Abe attends and does the work for both English classes and Bob does the same for both math classes. The four instructors involved know the names and faces of all the students in their classes, so they never bother to check IDs. (Professor Yee doesn't know that Abe attends her English class every day answering to the name of Bob, and Professor Zed doesn't know that Bob attends her Math class every day answering to Abe).
The two cheaters get credit for two classes while only needing to master the material for one (and without having to pay any bribe money).
A few years ago we actually had a case of a man taking a class for a woman. Classmates were upset that the ringer was raising the curve, and they informed the instructor that the same person was answering to an entirely different name in other classes. The student who was actually enrolled in the class was Asian, and her instructor did not recognize that her name was a woman's. The only consequences to the students were that they had to speak with a vice-president, and that neither got credit for the class that semester.