We investigate the relationship between unfulfilled educational aspirations and self-esteem. Clas- sifications of education relying on completed years of schooling or degree attainment are not able to distinguish between college dropouts with unfulfilled aspirations and graduates with fulfilled aspirations. To separate the two groups, we develop a classification of education combining the highest type of college enrolled in (aspiration) and the highest degree obtained (realization of as- piration). Using data spanning three decades from the National Longitudinal Survey of Youth, we find that four-year college dropouts compared to graduates have permanently lower self-esteem, whether dropouts obtain an associate’s degree or not. However, associate’s degree holders who had never enrolled in a four-year college do not experience this long-term negative e↵ect. Therefore, finishing the highest type of college in which the student ever enrolled is critical for the formation of self-esteem. We discuss implications for college enrollment decisions.