ABSTRACT Lower class students are less likely to attend university than their higher class counterparts, even adjusting for academic performance. I argue this is due to “status beliefs” – widely-held views that high status individuals (e.g. men, ethnic majorities, higher class) are generally more competent than low status individuals (e.g. women, ethnic minorities, lower class). Lower class students are therefore attributed, and internalise, lower expected academic competence due to their low status position, regardless of true ability. However, studying the effect of status beliefs is difficult, since it is hard to identify contexts where status beliefs vary and yet objective characteristics do not. My solution is to leverage variation in a student’s reference group. I argue that when a lower class student is placed in a (relatively) higher class classroom, they are seen, by themselves and others, as subjectively more lower class than if they were placed in a lower class classroom. Since they are seen as lower class, they internalise negative status beliefs about lower class people. I present two studies, one applying a quasi-experimental design to observational data, and the other a vignette method, that provide complementary evidence that status beliefs are a consequential factor in determining educational inequality.