It is well known that individuals with experience of child welfare interventions – here conceptualised as placement in out‐of‐home care (OHC) – tend to have substantially poorer educational outcomes compared to their peers. Numerous explanatory factors have been proposed but few have been informed by mainstream sociological research into educational stratification. Through the lens of primary (ability‐driven explanations) and secondary (choice‐based explanations, conditional on educational performance) effects on social background differentials in educational attainment, longitudinal data from more than 14 000 Swedes (of which around 9% have been placed in OHC) were used to estimate the relative importance of these two basic explanatory processes. Results from decomposition analyses suggest that the secondary effect is the key driver in creating differentials in midlife educational attainment among individuals of different social origins. Such impacts were found to be even stronger in the OHC population. Interventions aimed at improving educational performance in children with experience of OHC may not sufficiently reduce educational inequalities across the life course if choice‐based explanations are not addressed.