THIS STUDY ATTEMPTS TO DEMONSTRATE THAT PATH ANALYSIS IS A VALUABLE TOOL FOR INTERPRETING CORRELATIONS IN A CAUSAL SENSE. PATH ANALYSIS IS APPLIED TO A NONEXPERIMENTAL, PANEL SURVEY IN AN EFFORT TO DETERMINE WHETHER THE MORE SELECTIVE OR LESS SELECTIVE COLLEGES HAD A DIFFERENTIAL IMPACT ON THE EDUCATIONAL PLANS OF THEIR STUDENTS. THE PROBLEM IS TO INTERPRET THREE CORRELATIONS--SELECTIVITY WITH CHANGES IN EDUCATIONAL PLANS, SELECTIVITY WITH COLLEGE GRADES, AND COLLEGE GRADES WITH CHANGES IN EDUCATIONAL PLANS. DATA FOR THE STUDY WERE OBTAINED FROM 127,125 ENTERING 1961 FRESHMEN IN 248 FOUR-YEAR COLLEGES AND UNIVERSITIES. THE GENERAL PROCEDURE WAS TO CONSTRUCT SIX EQUATIONS USING SEVEN VARIABLES--FATHER'S EDUCATION, NATIONAL MERIT SCHOLARSHIP TEST SCORE, HIGH SCHOOL GRADE AVERAGE, FRESHMAN EDUCATIONAL PLANS, SELECTIVITY OF COLLEGE ATTENDED, FRESHMAN YEAR COLLEGE GRADES, AND SOPHOMORE EDUCATIONAL PLANS. THE RESULTS SUGGEST THAT CHANGES IN EDUCATIONAL PLANS ARE A POSITIVE FUNCTION OF THE DEGREE TO WHICH A STUDENT'S ACADEMIC PERFORMANCE DIFFERS FROM THAT PREDICTED FROM HIS BACKGROUND AND THE COLLEGE HE ATTENDS AND THAT THE DIRECT INFLUENCE OF COLLEGE SELECTIVITY ON EDUCATIONAL PLANS APPEARS TO BE SMALL OR NONEXISTENT. IT IS CONCLUDED THAT IT IS EXTREMELY DIFFICULT TO PUT THEORIES ABOUT COLLEGE ENVIRONMENTS INTO TESTABLE FORM. (HW)