Is it permissible for a teacher to overlook cheating in exams if there is a personal risk to him or his property due to his attempt to prevent it, especially with weak protection from the responsible authorities?

The questioner is right in condemning the forbidden deception (ghish). As for the threats he faces due to his prevention of it, if they reach the point of coercion, then he is excused, for necessities permit the forbidden. The limit of necessity is when it is highly probable that one will fall into ruin or an unbearable hardship. People have differed on whether a threat constitutes coercion or not, and the correct view is that it is coercion. So, if an oppressive person with power tells a man: "If you do not do such-and-such, then I will kill you, or beat you, or take your money, or imprison you," and he has no one to protect him but Allah, then he may proceed with the action, and the sin is, in general, waived from him.