An undergraduate said they may hire a freelancer to do their work for them. What should I do?
[The student] remarked (in writing) that they might as well just buy solutions to their projects on a particular freelancing website for that price, as their friends do.
That does not sound to me like "admitting" that they "would" cheat. If I said to a prospective financial advisor, "your rates are so high I may as well just declare bankruptcy now", that does not mean that I am going to declare bankruptcy, it is merely a way to express that the advisor's services do not seem cost-effective.
Given this, I would do nothing -- you offered legitimate tutoring services and the student declined your offer. You have no compelling reason to suspect that the student will actually cheat.
In dubio pro reo. Evaluations of projects is already a highly subjective process. If you tell someone "Please evaluate this project, it is very likely the author cheated" they will probably give a worse grade than if simply told to evaluate the exact same project. What if the student then didn't cheat?
If your institution has no way of properly assessing a candidate, i.e., one could "buy" a degree by having external services do the work, then this is an institutional problem and you won't fix it by suggesting to a professor that one of their students may cheat.
Lastly, think about the effects your behavior has on the institutional climate. Would you like to study in an environment in which people tell professors "Arnold may be cheating, I watched him visit that freelancing website"?
You need to find and read your University's honor policy. Assuming that:
- It makes cheating an offense
- It requires reporting violations of the policy
then it puts a reporting burden on the student who knows of cheating to report it, and either (a) they did report it (to you), which you need to relay or (b) their failure to report it is a violation which you know about, making you responsible to report that. Yuck!
As a graduate student, the best thing to do is to just kick this up the chain. Do not tell the professor that the student you met with is cheating, or tried to cheat, or is likely to cheat. Stick to the facts that they told you cheating was going on but you don't know the details.
The professor has a lot more latitude to stop the process at that point, perhaps by making a point during the next class to inform students that cheating has not gone unnoticed and needs to stop immediately. You can even make a suggestion to not drag the student in for questioning. The professor has (probably) the authority to make that decision; you do not.
Note that while you may feel that reporting is not ethically required, the correct way to fight back against such a policy is to tell your school you think (2) is unjust, not to go around disregarding it.