This paper addresses the question of how students and their families make educational decisions. We describe three types of behavioral model that might underlie decision-making and we show that they have consequences for what decisions are made. Our study thus has policy implications if we wish to encourage students and their families to make better educational choices. We also establish the conditions under which empirical analysis can distinguish between the three sorts of decision-making and we illustrate our arguments using data from the National Educational Longitudinal Study.