Fortunately, for these group of students the benefit is short lived and mainly on paper. They have better grades compared to their honest peers because of the complicity from professors (it is trivial to figure out whether someone has done the project or outsourced it, but they don't care).

But when it comes around to getting a job, they are the ones who usually struggle. I've seen so many students with average grades ultimately be recruited for the best jobs available on the market because they preferred to spend their time on TopCoder instead of gaming the system.

In some ways, I feel sorry for them. Most of them do it due to the herd mentality, everyone is outsourcing their projects so they must outsource their projects too. Clearly, this doesn't work out very in the long term and what they gain by taking the easy way out, they lose in terms of denying themselves the opportunity to gain some practical experience.