I screwed up and change my vote from 1 to 2.

I felt like 2 was the clear answer here as long as both are consenting adults and the TA is not trying to abuse his position in a power play to make this girl (that's not even in his class) sleep with him.

I was pretty confused when I seemed to be in the vast miniority so I spoke to my fiance about it who is a teacher. Granted, she teaches 1st grade so we are talking a totally different world here; BUT teachers are not only allowed, but encouraged at times to take a tutoring job even with the kids in their own classroom. She said that her principal just asked her if she wanted to tutor a week or two ago even. I understand the difference between a teacher/student in Elementary-High School is quite a bit different than TA/Student at a college though.

She thought 2 was reprehensible because of trading sex for tutoring, but I don't really see anything "ethically" wrong with that. Mostly it just sounds sleazy, but sluts are gonna slut. Maybe she wanted to bone the guy anyway, and just happened to get some extra tutoring out of it.

Tell your wife not to do it. The upside is small and the downside is huge, regardless of what the principle says. Your wife should know some resources to refer students to for special tutoring. Tutoring kids in her class for compensation is beyond a bad idea.

If someone decides to accuse her of selling grades she has no good way to defend herself.

Your position is dumb and you are using the word unethical incorrectly.

To simplify things for you, no teacher should do 1 (or TA) because if they get accused of selling grades it is impossible for them to defend themselves or prove it is not true.

Unethical is not just doing something wrong but putting yourself in a situation where you could be perceived to be doing something wrong or be influenced to do something wrong.

I am not sure what this thread is about. You can't possibly be a TA as that would be an ethics violation by any college or university employing you.