At Mrs. Puff's Boating School, Mr. Fitz, the superintendent, is talking to Mrs. Puff about renewing her teaching certificate, but informed her of the high record of failing students. However, SpongeBob is the only student who has ever failed her class, but has done so 1,258,056 times. Mrs. Puff is told to show Mr. Fitz everything she has taught SpongeBob, and within seconds, he fails yet another driving test by bashing in a boat. Mr. Fitz fires Mrs. Puff (to her delight since she dislikes SpongeBob), and a new boating instructor named Sergeant Roderick (most likely a shark) comes in and takes over the school.
Sergeant Roderick is a viciously cruel drill instructor, who immediately throws out one student for talking and another for eating. All the other students run away, except for SpongeBob, who is now his only student. The new boating instructor has set up a difficult course, which he trains SpongeBob to crawl, walk, run, and eventually drive through while blindfolded. Surprisingly, he masters this.
When the time of SpongeBob's final exam, which Mr. Fitz personally comes to watch, SpongeBob realizes that he can only drive while blindfolded, and proceeds to take the exam with the same disasterous results. Roderick nearly dies attempting to stop his boat from destroying the city, and Mr. Fitz realizes that SpongeBob is "unteachable" and rehires Mrs. Puff.
This is another instance in which SpongeBob proves he can drive competantly. Previously, in Boating School, he gets instructions from Patrick's walkie-talkie, and is just about to pass the test. However, when Mrs. Puff tells him his method is a form of cheating, SpongeBob drives out of control and fails once again.