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The available research on the second-generation labor immigrants in Germany suggests a puzzle that the inequalities related to educational attainment and secondary school placement they experience cannot be entirely explained by social background factors. This article examines the role of ethnic networks and ties as mechanisms to explain the fact that certain immigrant groups get stuck at the lower strata of educational ladder, whereas some of them perform better than others. After controlling for social background factors, the role of social networks and ties to the German society provide an answer to the puzzle of differing educational success of children of different national origin. On the one hand, the lack of social ties outside the ethnic community may restrict immigrant’s information of available options about the education system. On the other hand, ethnic networks may be beneficial in terms of providing a safety net to immigrant families, both socially and economically, and the resources embedded within the networks of immigrant group may also facilitate favorable conditions for educational success. Relying on a conditional view of ethnic networks, this paper addresses the theoretical debate on the role of ethnic networks on the educational success, and offers an alternative mechanism for the explanation of the educational inequalities for the second-generation descendants of labor immigrants in the German context. This article uses previously unanalyzed data drawn from National Educational Panel Study (NEPS), which became recently available for scientific research. I use multilevel techniques suited to the nested structure of data.