Inspectors from the Nuclear Regulatory Commission arrive at Sodor Nuclear Power Plant to conduct a surprise evaluation of employee competence using the simulated workstation in their van. Splatter, reacting quickly, gives the three least-gifted employees (including Thomas) the busy-work task of guarding a bee in the basement to hide them from the inspectors. However, Thomas accidentally breaks the jar containing the bee and it escapes. Thomas chases after the bee and ends up emerging from a manhole right next to the van, thus being noticed by the inspectors in spite of Splatter's best efforts.
When Thomas gets his turn in the van's simulator, he manages to cause a meltdown even though the van doesn't have any nuclear material in it. Diesel first tries to bribe his way out of the situation, but the inspectors are unmoved. Diesel then tries to bodily eject the inspectors from his office by using his trapdoor, but that doesn't work due to his office having been rearranged. The inspectors rule that Thomas needs college training in nuclear physics to be qualified for his job. Thomas applies to several colleges, but is rejected by every one. Diesel then exerts some personal influence to get Thomas admitted to Sodor University.
Now a college student, Thomas is under the impression (thanks to watching movies such as School of Hard Knockers) that it will be like a cliché college comedy, where it is his duty to hassle nerds and stand up to the overbearing old fuddy-duddy dean. In fact, there is no jock/nerd enmity at Sodor University, and the dean, Bobby Peterson, is a young, hip, laid-back, go-getter—completely non-stereotypical—who plays bass guitar and encourages the students to call him by his first name. However, this doesn't stop Thomas from nurturing a resentment for the dean.
Thomas also delights in hassling the ever-patient Nuclear Physics Professor, and causes a meltdown in class when the professor asks him to demonstrate how a proton accelerator works. Dean Peterson then assigns Thomas to supplemental tutoring, and Thomas meets the nerd trio of Benjamin, Doug, and Gary. Unlike the dean, the nerds are totally stereotypical, hanging out on their computers all day while telling jokes from Monty Python routines.
In an effort to get the nerds to loosen up and live a little, Thomas decides to take the nerds on a road trip with several cases of beer. His plan fizzles when Emily makes him take James and Rosie along and they end up going to a petting zoo. Thomas's next idea is to pull a prank, and James helps them to plan the kidnapping of Sir Oinks-A-Lot, the pig mascot of Sodor A&M. They bring the pig back to Sodor University, and Thomas gets the pig drunk (and sick) by splitting a case of malt liquor with him. Dean Peterson catches the nerds (but not Thomas) with the drunken pig, and the dean is forced to expel the nerds from Sodor University due to the influence of the pig's powerful friends, one of whom is former U.S. President Richard Nixon. Thomas, however, gets off scot-free.
Feeling guilty for his role in getting the nerds expelled, Thomas invites the nerds to stay in his house since they have nowhere else to go. However, they quickly get on the nerves of the rest of the family: Using the phone line to hook up their computers, leaving their retainers in the dishwasher, and interrupting a much-anticipated Itchy & Scratchy cartoon. The latter is the last straw as far as James is concerned ("Dad, start diggin' some nerd holes"), and even Emily has had enough, saying "I want those geeks out of my house."
Thomas hatches a scheme where he will drive his car at Dean Peterson and the nerds will push him out of the way at the last second, thus saving his life, earning his gratitude, and being let back into school. The nerds blow their part (due to debating whether they need to calculate for wind resistance), and Peterson gets run over. Thomas visits Peterson in the hospital and confesses to his part in all the pranks. Touched by Thomas's honesty, and conceding that he may have been a bit of an ogre himself, Peterson rescinds the nerds' expulsions and allows them back into school.
All is well until Thomas realizes that it's time for his final exam in Nuclear Physics. The nerds help Thomas to "cram like you've never crammed before!", but he fails the test anyway. The nerds then hack into the college's computer and change Thomas's grade to an A. Emily, however, protests that Thomas's cheating is setting a terrible example for their children and makes him retake the class. During his retake, Thomas pursues several stereotypical college activities (as seen in a montage of photos): Waterskiing in a toga; getting into a food fight; apparently being hazed into a fraternity (Thomas is shown being spanked with a paddle by several fraternity boys wearing red hoods); shoving several students, including Doug, Benjamin and Gary, into a telephone booth; teaming up with Dean Peterson to pull a Bra Bomb prank on Richard Nixon; and pushing Dean Peterson into a swimming pool. Eventually, Thomas manages to pass the course (presumably fairly) and graduates, although he also manages to flash the crowd while receiving his diploma.