Context. The rise of generative AI (GenAI) tools like ChatGPT and GitHub Copilot has transformed how software is learned and written. In software engineering (SE) education, these tools offer new opportunities for support, but also raise concerns about over-reliance, ethical use, and impacts on learning. Objective. This study investigates how undergraduate SE students use GenAI tools, focusing on the benefits, challenges, ethical concerns, and instructional expectations that shape their experiences. Method. We conducted a survey with 130 undergraduate students from two universities. The survey combined structured Likert-scale items and open-ended questions to investigate five dimensions: usage context, perceived benefits, challenges, ethical and instructional perceptions. Results. Students most often use GenAI for incremental learning and advanced implementation, reporting benefits such as brainstorming support and confidence-building. At the same time, they face challenges including unclear rationales and difficulty adapting outputs. Students highlight ethical concerns around fairness and misconduct, and call for clearer instructional guidance. Conclusion. GenAI is reshaping SE education in nuanced ways. Our findings underscore the need for scaffolding, ethical policies, and adaptive instructional strategies to ensure that GenAI supports equitable and effective learning.