Completing college is now the minimum threshold for entry into the middle class. This has pushed college readiness issues to the forefront in efforts to increase educational attainment. Little is known about how college readiness improves outcomes for students traditionally marginalized in educational settings or if social background factors continue to impact students in the same way during college regardless of readiness. Examining first-year college retention using a nationally representative data set, this study asks if social background factors and financial resources for college differentially impact students based on readiness. Findings indicate that academic readiness matters and that parental income and college generation status differentially affect first-year college retention for less-ready students but not college-ready students. Students who begin college less prepared academically are also more disadvantaged than college-ready students by the funding sources they have for college. Implications for policy and practice are discussed.