I really think this is the wrong takeaway. AI is absolutely a problem, and I don't think your cousin was in the wrong here- especially in the context of medicine. And also.
Education does not need to be externally motivated. This isn't a carrot on a string thing. This is a bunch of kids in a situation they don't want to be in, asked to do shit they don't want to do, lacking any sort of real understanding of why any of the things they're being asked to do matter at all, and lacking the support they need to actually do the things they're being asked to do. AI isn't a carrot on a string; it's an escape route.
Creating an environment where kids understand the importance of learning these skills, and feel supported and encouraged enough to apply themselves, is a genuinely monumental task. There is an entire body of research on this topic. There are lots of people doing it successfully, too, and many of them are doing it in public schools (yes, even in the US).
Just to touch on a few of the actual systemic solutions here, from someone whose degree is in this:
Higher teacher:student ratios, so teachers can form individual relationships with students, understand their needs, and better support them.
Better pay for teachers, so pursuing a career in education isn't dooming yourself to a lifetime of debt.
Transformative coaching methods for teachers, so they are challenged and supported to improve and update their methods-- and in ways that are actually backed up by research. Unlike one-off and largely self-directed professional development.
Culturally inclusive and justice-oriented education methods that center the needs of underserved populations, especially BIPOC students, who generally receive the least amount of support- and even less support that is actually relevant to their unique needs.
Culturally-relevant and culturally-responsive education methods that address the needs of all students, and naturally motivate them to learn based on what's already interesting and important to them.
More funding for schools, so they can actually do these things.
No more standardized testing, so students can focus on actually learning and understanding things.
Effort-based grading, rather than accuracy-based, so students can focus on authentically learning and growing.
Lower requirements/competition for college admissions, so students can focus on learning instead of one million extracurriculars.
Lower cost of college tuition, so students don't need to work in order to save up.
Better options for careers that don't require a college degree.
Higher wages and lower cost of living, so students don't need to work to support their families.
People naturally want to learn. Forcing them to learn when they don't want to actively kills that instinct. Overloading them with other stressors and pressure makes actual learning impossible, even when they do actively want to learn.
They don't need less carrot and more stick. They aren't donkeys, and school isn't a farmer's field they need to plow. They need authentic mentorship and support in order to develop and reach their own goals, because they are human people with value and lives, and education is supposed to be for them.