 Larry Crowne (Tom Hanks), a middle-aged Navy veteran, is fired from his job at a big-box store due to a lack of college education, despite his seniority and exemplary work. Larry, who is divorced and lives alone, cannot find a job and could lose his house. Larry's neighbor, Lamar (Cedric the Entertainer), advises him to enroll in the local community college and get an education.
Subsisting on unemployment benefits and unable to afford to drive his SUV, Larry buys a scooter from Lamar. At the college, he becomes part of a colorful community of outcasts, also-rans, and the overlooked all trying to find a better future for themselves. Two of the classes he takes are speech, taught by Mercedes Tainot (Julia Roberts) and economics, taught by Dr. Ed Matsutani (George Takei). While he initially struggles in speech class, he does very well in economics.
Mercedes drinks at home after school because she is unhappily married to Dean (Bryan Cranston), a former professor turned writer turned blogger. In reality, Dean spends his days looking at internet porn.
Larry's economics classmate Talia (Gugu Mbatha-Raw) invites him to join a club of scooter riders led by her boyfriend Dell Gordo (Wilmer Valderrama). She also updates Larry's home decor, hair style, and wardrobe. Larry's friend Frank (Ian Gomez), who runs the diner, offers him a job to help make ends meet, as Larry had been a Navy cook.
After a night with Dean goes horribly wrong, Mercedes is left alone at a bus stop, where Larry and his scooter gang notice her. Larry offers her a ride home, which Mercedes reluctantly accepts. On their way home they witness Dean getting arrested for drunk driving. At her front door, they kiss. She wants to have sex as well, but Larry declines, not wanting to take advantage of her inebriated state. When Dean arrives home the following morning he finds all of his possessions on the front lawn.
Realizing there is no way he will not lose his house, Larry uses the knowledge he gained in his Economics class to begin a strategic foreclosure. Mercedes, meanwhile, warns Larry not to disclose the events of the previous night, and remains under the false impression that he is romantically involved with the much-younger Talia. It disappoints Larry, who had been excited about Mercedes' interest in him. He goes back to concentrating on his studies and his new job instead.
Mercedes runs into Talia, who is telling Frances, her English teacher (Pam Grier), that she will be dropping out of college to start a thrift store. Mercedes finds out that Talia and Larry are just friends. Later, Frances comes over to Mercedes' apartment to provide emotional support due to her divorcing Dean.
Finals now come, and Larry is scheduled last. His speech is about his travels around the world while in the Navy. Larry is given a big round of applause by his classmates and an A-plus grade from Mercedes, who is now happier in her life, and has rediscovered her passion for teaching.
A short while later, Mercedes and Frances show up at Larry's diner. She lets him know that he was an excellent student, to which he replies that she was an excellent teacher. When the next term begins, some of the students from Mercedes' speech course register for her Shakespeare class, but Larry is not with them. He is seen taking Dr. Matsutani's second-term Economics class. Mercedes walks to her office and sees a note from Larry on the door, which is an invitation for dinner, with the address to his new apartment. She drives there and they kiss.
What was Larry's career before going to college and after he was in the Navy?  Why does Larry enroll in community college? How does Larry get a job at the restaurant?  What grade does Mercedes give Larry on his final exam? What classes does Larry take in college? Whom did Mercedes believe Larry was in a relationship with? What job did Larry take to make ends meet while in college? Who gives Larry a makeover? What causes Larry to enroll in college as a retired middle aged Navy veteran? What does Larry do for a final exam in his speech class? When Larry could no longer drive his SUV, what did he buy to travel to school? How does Larry ask Mercedes out? How does Mercedes husband, Dean, actually spend his days? After a terrible fight with her husband, where did Larry and his scooter gang find Mercedes? Who helps Larry by getting him friends, with his home decor, grooming and in getting a job? Which one of Larry's professors does Larry end up dating? When does Mercedes find out that Larry is not dating Talia? What service did Larry once work for? What class does Dr. Ed Matsutani teach? What was the topic for Larry's speech final? When Larry left Mercedes a note, what kind of note was it? Who is Larry's economics teacher? What surprise does Mercedes find on her door at the end of the story? Why was Larry fired from the big box store? Why did Frances come over to offer emotional support to Mercedes? Why does Larry turn Mercedes down for sex when he takes her home from the bus stop? Why is Talia dropping out of school? What does Dean do for a living? Why does Mercedes finally leave Dean?  What wrong impression of Larry and Talia does Mercedes have?