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Students’ educational careers depend on teachers’ (more or less accurate) judgment of their cognitive abilities and the resulting recommendations for higher education. Our study examines reference group effects on estimated individual cognitive ability and teachers’ recommendations for educational tracks (highest vs. secondary education) using multilevel modeling. A measure of fluid intelligence is administered to assess individual and class-average cognitive abilities. Data are collected in three German federal states during the last year of primary school. We assume that class-average cognitive ability influences teacher estimates of students’ individual cognitive ability. When controlling for individual cognitive ability, ratings of individual cognitive ability are lower within a high-ability class.