A successful journey through higher education is, for many, a once in a lifetime opportunity for social mobility. Unfortunately, one notable feature of higher education systems is that students from some backgrounds do not achieve the same academic attainments as do others. The current study tests the role of one particular set of processes: social identity (in)compatibility on academic performance. Participants were recruited at two time points from a pool of first year undergraduates at a modern London University (N = 215) of which 40.1% were classed as Black, Asian or Minority Ethnic (BAME), 57.1% as non-BAME and 2.8% did not provide this information. A prospective design was employed: Alongside demographic data, measures at the start of the academic year consisted of measures of student and ethnic identity, and both practical and identity incompatibility. At the end of the academic year, average marks achieved were gained for each student from the university's registry system. Results indicate that BAME students had equal levels of student identity to non-BAME students, but higher levels of ethnic identity. They also typically experienced higher levels of both practical and identity incompatibility. Finally, BAME students had lower attainment than did non-BAME students. Both practical and identity incompatibility appeared to moderate this effect. However, contrary to predictions, it was only under conditions of low and medium levels of incompatibility that BAME students attained lower marks than their non-BAME peers. The theoretical and practical implications of these findings are discussed.