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Immigrant and minority youth tend to experience an aspirations-attainment paradox in which they exhibit higher educational aspirations compared to majority and native-born youth, yet their attainment often falls short of these ambitions. This study, conducted as part of a VR-funded research project focused on educational transitions in two Swedish municipalities, explores two processes that help explain aspirations-attainment paradox. The first process, “branching out,” is when immigrant and immigrant-background youth become aware of new career paths and educational opportunities as they progress through their schooling. This leads them to adjust their aspirations based on a broader understanding of the possibilities available to them. The second process is “cooling out,” involves a lowering of aspirations as youth encounter barriers—either structural or perceived—within the educational system, leading them to adjust their goals downward. Using qualitative data gathered through interviews with school personnel and foreign-born immigrant students, this study illuminates how immigrant-background students reconcile their initial educational ambitions with the realities they face, contributing to a broader understanding of how immigrant and minority youth experience educational trajectories and transitions. These findings are relevant beyond the Swedish educational context, as cooling out and the aspirations-attainment paradox are widely-observed phenomena. Beyond education, we can expect to observe cooling out and branching out in other contexts where mobility is shaped by institutions that may enable but also constrain social mobility.