The rapid assimilation of Artificial Intelligence technologies into various facets of society has created a significant educational imperative that current frameworks are failing to effectively address. We are witnessing the rise of a dangerous literacy gap, where a focus on the functional, operational skills of using AI tools is eclipsing the development of critical and ethical reasoning about them. This position paper argues for a systemic shift toward comprehensive AI literacy that centers human agency - the empowered capacity for intentional, critical, and responsible choice. This principle applies to all stakeholders in the educational ecosystem: it is the student's agency to question, create with, or consciously decide not to use AI based on the task; it is the teacher's agency to design learning experiences that align with instructional values, rather than ceding pedagogical control to a tool. True literacy involves teaching about agency itself, framing technology not as an inevitability to be adopted, but as a choice to be made. This requires a deep commitment to critical thinking and a robust understanding of epistemology. Through the AI Literacy, Fluency, and Competency frameworks described in this paper, educators and students will become agents in their own human-centric approaches to AI, providing necessary pathways to clearly articulate the intentions informing decisions and attitudes toward AI and the impact of these decisions on academic work, career, and society.