Larry Crowne (Tom Hanks) is an employee at a retail store. He is well-liked and friendly, and a regular employee of the month. He is called to a meeting, but is told he's being let go, do to lack of a college degree.
Despondent, Larry heads home. He starts calling on retail stores for jobs, but is unsuccessful. He tries to refinance his house, but is upside-down. He talks to his neighbor Lamar (Cedric the Entertainer), who suggests going back to college. Larry visits the local college (East Valley Community) and meets Dean Dave Busik (Holmes Osborne), who befriends Larry and suggests a few classes. While fueling his gas guzzling SUV, he spots guys riding economical scooters, and barters for one from Lamar. Lamar runs a garage sale every day.
Meanwhile, we meet Mercedes Tainot (Julia Roberts), a public speaking teacher at East Valley, who laments her profession. Larry meets Talia (Gugu Mbatha-Raw), a fellow student and scooter-driver. Larry arrives late for Mercedes's class, and she tries to dissuade them from attending so early in the morning. At an Econ class later in the day, Talia sits by Larry and Lala (Maria Canals-Barrera), who is in Mercedes's class as well. The Econ teacher is Dr. Ed Matsutani (George Takei), who also tries to scare away students.
Mercedes's next class is under-attended, and she cancels it. She returns home and starts drinking. Her husband Dean (Bryan Cranston) is a blog writer, but spends his time looking at online porn. They argue about it, and she hangs her head.
The next day, Larry does a presentation for his speaking class, but bombs. The other students are equally dull. During Econ, Larry gets busted for texting with Talia, who invites Larry to ride scooters with her "gang". She calls him Lance Corona, and as they ride, other scooters join them. Larry takes them to his favorite diner and Lamar's (permanent) yard sale. The scooter gang (The Street Patrol) comes into his house and gives him a haircut and a room makeover, initiating him into the group. The leader, Dell Gordo (Wilmer Valderrama), welcomes him into the gang and advises Larry not to fall for Talia.
On the way to school, Larry pulls alongside Mercedes and helps her re-program her GPS. Larry is doing well in econ, but keeps getting busted for texting. Larry's friend Frank (Ian Gomez), who runs the diner, offers him a job to help make ends meet. Larry's new friends and work schedule make it hard for him to make classes. He misses Mercedes's class, and she tells him not to miss any more classes. She gets the wrong idea about him, and Larry's recounting of Talia rearranging his bedroom reinforces the idea.
Mercedes and Dean argue on date night, and Dean insults her. She demands to be let out of the car, and Larry's scooter gang comes by. Larry gives her a ride home, and they pass by Dean, getting arrested for DUI. Mercedes is greatly cheered by the sight. She's drunk, and Larry helps her home. She makes a pass at Larry, but he resists after one kiss. When Dean returns home, hung over, the next morning, he finds his stuff out on the lawn.
Mercedes asks Larry not to brag about "almost scoring" with her. Later, he strategically forecloses on his house, applying lessons learned from Economics. Talia clarifies her relationship with Larry to Mercedes, and she is surprised. Talia is working on a new business, and Larry helps her. Dell is becoming increasingly jealous of Talia and Larry.
At Larry's foreclosure garage sale, he sees that the pizza delivery guy is his old co-worker - times are tough.
Larry and Mercedes are both trying to rebuild their lives (separately). Larry passes his final exams, and Mercedes visits him at work, and sparks fly. The next term, Larry takes class with Dr. Matsutani again, and leaves Mercedes GPS directions to his place, next to Talia's new store. They embrace, and go inside. The end.