I remember Rav Aviner was asked a very similar question. He answers at the bottom of this page.
To quote him
Question: I heard that it is permissible to cheat, since it isn't "Genevat Da'at" (deception), as the teachers know that cheating occurs, and it would be "a decree that the community cannot live up to [and which therefore is not binding]." Furthermore, in our institution, there's serious competition among the students to be accepted into a particular program, for which math, English, and Talmud are the main subjects, and the students are accepted based on their relative ranking of grades. Since there's rampant cheating in all of the subjects, I am asking if I too may cheat, since it is likely that otherwise I'll be harmed.
Answer: G-d forbid that it is permissible to cheat on tests and the like! It is "Genevat Da'at" (Rambam, Hilchot Deot 2:6), which is a Torah prohibition according to most authorities (Smag, Negative Mitzvah #155), and is included in the prohibition of "Do not steal." This is because "mind-stealing" (i.e. deception) is considered stealing, as it says [when Lavan accused Ya'akov], "You stole my mind" (Bereshit 31:26), and "Avshalom stole the mind of the people of Israel" (Shmuel 2 15:6).
Furthermore, it is possible that one is also violating "Stay far from a matter of lying," which is a much broader prohibition than "Do not lie," as it also includes indirect lying, various strategies, and even indirectly causing a misunderstanding by one's silence -- as we see from all the examples in the Talmud (Shevuot 30-31).
In addition, even without any verse, it is clear that cheating shows a lack of integrity. For a person to study Torah, he must first have integrity -- an ethical character trait that is both elementary and general. Only on its foundation can one build the holiness of Torah. The claim that "teachers know students cheat" does not make it permissible, just as the police's knowledge that there are thieves does not validate theft. In fact, it is the opposite -- the police force uses this knowledge to prevent theft. Similarly, a teacher's knowledge of cheating does not signify approval, but rather the opposite. The proof is that if a teacher discovers a student cheating, he will punish him.
The claim that the prohibition of cheating is "not a decree the community can live up to" also does not apply, because this is not a new decree, but an old decree of the Creator who commanded us to have integrity. Thank G-d, many students do not cheat. As for the concern that you will be at a disadvantage if you do not cheat, this is also not grounds for permission. Many times people of integrity suffer the consequences of their honesty, but "It is better for me to be called a fool all my life than to become evil in front of G-d even for a moment" (Mishnah, Eduyot 5:6). Other people's stealing does not permit you to steal. In the end, the truth will win out and people of truth will be the leaders of the world.