Max Fischer (Schwartzman), an eccentric 15-year-old, is a scholarship student at Rushmore Academy, a private school in Houston. Although he participates extensively in extracurricular activities, he struggles academically. The school's headmaster, Dr. Guggenheim (Cox) warns Max that if he continues to struggle with his grades, he will be expelled. At a school assembly, Max meets Herman Blume (Murray), a disillusioned parent and businessman who despises his family. Herman comes to like Max, and the two become good friends. Max is impressed by Herman's success, while Herman is interested in Max's confident persona.