At Vernon Academy, a distinguished boys' preparatory institution nestled in Illinois, Jonathan Ogner (Andrew McCarthy) steps onto campus, ready to embark on his senior year. Upon arriving at his dormitory, he meets his new roommate, Squire Franklin Burroughs IV (Rob Lowe), affectionately known as "Skip." However, their initial interaction quickly takes a turn when Skip persuades Jonathan to partake in a humiliating senior-class tradition by donning women's underwear and then cruelly locking him outside, subjecting him to the mocking laughter of their peers.
After enduring the jeers of his classmates, Jonathan finds himself in tears during lunch the following day. When Skip uncovers Jonathan seemingly hanging from the ceiling, panic ensues, leading him to summon Mr. Kennedy (Remak Ramsay), the headmaster. Yet, the situation takes an unexpected twist when the headmaster and Skip discover that Jonathan's body has been supplanted by a mannequin crafted to resemble Kennedy—a daring prank that suddenly earns Jonathan the respect and admiration of Skip and his fellow students.
As evening falls and the tension eases, Jonathan confides in Skip over a bottle of vodka, revealing his desperate admission: he had cheated on the Scholastic Aptitude Test (SAT), feeling an immense pressure to gain admission to Harvard University despite consistently excelling academically. Seeking some reprieve, Jonathan and Skip venture out to meet Lisa (Virginia Madsen) and Susan (Deborah Thalberg), students from the neighboring Foxfield Academy. Unfortunately, the night takes a downturn when Jonathan becomes ill, vomiting in Skip's car and ruining what was meant to be a fun evening.
Days later, Skip designates Jonathan as the secretary for the school's dance committee, sending him to Foxfield to negotiate details for an upcoming Halloween dance with Headmistress DeBreul (Fern Persons) and several Foxfield students, including Lisa and Susan. Amid his excitement, Jonathan’s awkwardness leads to a series of unfortunate events, including an embarrassing accident involving Lisa and the destruction of a valuable vase once gifted by Eleanor Roosevelt. The fallout results in a lifetime ban from Foxfield, snatching away his only chance for female interaction within the distant distance from Vernon.
In an attempt to broaden his horizons, Skip directs Jonathan to the Free and Easy Club in Chicago, hoping he will find a romantic partner, while amusingly instructing him to return to school with a pair of panties as proof of his conquest. At the club, Jonathan navigates through a couple of uneasy interactions until he meets Ellen (Jacqueline Bisset), an alluring, self-assured English woman in her late thirties. Succumbing to Skip's encouragement, Jonathan fabricates an elaborate story about being a doctoral candidate at Northwestern University. Attempting to avoid further missteps, he decides to leave, only for Ellen to follow him into a taxi, whisking them away to her hotel for an intimate encounter in an elevator.
Upon his return to Vernon, Jonathan parades around with Ellen's panties, igniting a whirlwind of gossip regarding his newfound reputation. Their relationship escalates when Ellen expresses a desire to visit him the following weekend, but Jonathan fabricates an excuse about attending a conference in New York City, leaving Ellen with no choice but to suggest coming to him there—a situation that intensifies Jonathan's anxiety over their burgeoning relationship.
In a fashionable Manhattan clothing store, fate intervenes and Ellen stumbles upon Jonathan's student ID, promptly realizing he had deceived her. In a flurry of distress, she hastily vacates the store, leaving Jonathan reeling on a rollercoaster of emotions. His return to Vernon is marked by sorrow and frustration, affecting both his health and academic performance, despite Skip's relentless attempts at humor and support. The tide begins to turn as Jonathan receives the life-changing news that he has been accepted to Harvard.
During the Christmas holidays, Jonathan visits Skip at the Burroughs family's extravagant estate, where an unexpected twist awaits. As the two friends share casual conversation with Skip's father, Mr. Burroughs (Cliff Robertson), a familiar face appears; Ellen, now revealed to be Skip's mother. Following a tense and awkward introduction, Ellen retreats, leaving Jonathan in a state of discomfort that runs deep. As dinner progresses, Ellen drowns her anxieties in alcohol, and when Mr. Burroughs reprimands her for her behavior, she seeks a comforting shoulder from Jonathan, who ultimately declines her advances. The next day, following Ellen's request, Jonathan departs, leaving behind an emotionally charged scene.
Upon returning to school, the students quickly learn of an investigation led by a man named Balaban (Stuart Margolin), initially assumed to be a drug enforcement agent. In a panic, students destroy several pounds of marijuana down school toilets, only to discover that Balaban is after those who have cheated on the SATs. As weeks pass, Jonathan receives frantic calls from Ellen, who pleads for his attention until he finally relents, agreeing to meet her again in Chicago. Although Skip desires to accompany him, Jonathan insists on going solo, masking his emotional turmoil as he mourns his elusive romance.
In Chicago, a heated exchange occurs between Ellen and Jonathan, filled with animosity, but passion prevails as they succumb to their desires once again. Meanwhile, unaware of the drama unfolding, Skip arrives in the city with friends intending to surprise Jonathan. However, when he unexpectedly bursts into the hotel room, he is faced with an image that shatters him—his mother in bed with his best friend.
Upon returning to Vernon, Skip and Jonathan's friendship hangs in the balance. Skip reveals that he harbors no resentment over the affair with Ellen, yet bitterness simmers beneath the surface as he learns of his mother's commitment to a mental institution. As tensions rise, the students gather in the cafeteria where Mr. Kennedy introduces Balaban, announcing impending interviews connected to the investigation. Jonathan's concealed guilt festers as he worries about Skip's potential revenge. When Skip is finally called to speak with Balaban, he defiantly confronts the investigator, cementing his status as a hero among the students while simultaneously deepening Jonathan's internal conflict.
Struggling to break the silence, Jonathan attempts to mend their friendship by discussing Ellen, igniting a fierce altercation that spills out into the woods behind the school, eventually migrating back to the dormitory where exhaustion finds them. In this vulnerable moment, Jonathan unveils his true feelings for Ellen, admitting he was genuinely in love, while solemnly promising never to see her again. With this crucial exchange, Skip offers his forgiveness, bringing a moment of catharsis and closure to their tumultuous journey.
