This analysis examines the nexus of marginalization and education, particularly the literacy potential and achievement of young children from socially and politically marginalized communities. Drawing on data from a study of literacy practice among Nicaraguan immigrants in Costa Rica and the schooling of the Nicaraguan children in Costa Rican schools, this analysis reveals the ways that constructs such as "difference" and "deficit" are constructed within historical, economic, and cultural contexts, for the most part in the absence of empirical evidence. The data used for this analysis was collected as part of a six-month, ethnographic case study of literacy practice within Costa Rican and the Nicaraguan immigrant communities. Data came from (a) observations in kindergarten, grade 1, and grade 2 classes in a public school near San José; (b) interviews with public school administrators and teachers; (c) community observations of literacy practices in Costa Rican contexts and within the "precarios" where Nicaraguan immigrants live; (d) semi-structured home literacy interviews with Nicaraguan participants from one prominent "precario"; (e) early literacy assessment results for children in the kindergarten and first grade; (f) expert interviews with administrators of NGOs who focus on the "Nicaraguan problem"; and (g) reading and writing artifacts from the communities and the schools.