Recap: Blair asks Jo if she could please cover for her in the kitchen so she can meet her beau Steve for lunch...and after much snarking from Jo and dramatic sighing from Blair, Jo gives in. Mrs. Garrett enters the kitchen with her worried face on and tells the gals (minus Blair, who's already left) that due to the shitty economy, the school's budget is facing cutbacks, and that some students will suffer as a result. She looks over at Jo with a piteous expression on her face, and a dismayed Jo goes, "I'm gonna suffuh?" and Mrs. Garrett nods and says that effective next semester, the board has decided to cancel the scholarship that has, thus far, been covering her tuition costs. Jo complains about getting the shaft after busting her butt for the last two seasons, then bitterly mutters, "So much for the American dream." Mrs. Garrett suggests she speak with Mr. Mavis, the school's guidance counselor, for other possible sources of money...but Jo grumbles that Mavis is a dumbass whose career advice to her once was to marry a good man. Mrs. Garrett urges her to give the dumbass another chance to do the job the school is paying him to do.
Tootie glumly says it won't be the same at Eastland without Jo around next semester, and Mrs. Garrett says they all need to remain positive and keep the faith that things will somehow magically work out by the time the end credits start rolling. Jo bursts into the cafeteria and excitedly shows everyone the stack of foundation and scholarship brochures she got from dumbass Mr. Mavis. Mrs. Garrett shrieks, "Wonderful!" and she and Natalie excitedly go through the stack with her. Their excitement quickly wanes when it's clear that Jo doesn't fit the criteria of any of the scholarships. Natalie, however, refuses to give up and picks up a brochure that just happens to be geared for a Bronx born tomboy who attends an overpriced all girls' school. Jo is thrilled...until she learns that the scholarship is funded by the Warner Textile Foundation: in other words, Blair's family. Natalie says she'll definitely get the scholarship if Blair puts in a good word for her, but Jo's like, "Fuggedaboutit!" and says she has no intention of humiliating herself by "kissing Blair's family tree". Natalie tells her she should be willing to kiss a little ass if she doesn't want to be shipped back to the smelly Bronx, and bellows, "Is that what you what?!" and Jo snaps, "No!" and says she wants to stay at Eastland and finish what she started. Natalie says, in that case, she's going to have to adjust her attitude where Blair is concerned...and the two role play so that Jo can practice being less of a sassy bitch. Tootie ambles into the room and asks whassup, so Natalie explains Jo's scholarship conundrum. Tootie haughtily says it would be wrong for Jo to get the Warner scholarship just because she's Blair's roommate/fantasy lesbian lover, 'cause such a thing would smack of favoritism.
Blair sweeps into the cafeteria after her lunch date with Steve and acts all condescending to Jo about the fancy, rich people food they just ate...and Natalie prompts Jo to chuckle instead of narrowing her eyes and doing her usual glarey schtick. Jo does her best to lighten up, then pretends to want Blair's advice on how she should style her hair - other than the tri-ponytail 'do she's been sporting since her arrival in Season 2. Blair quips that she should maybe try washing it once in awhile...and Jo snaps, "I can't do this!" and mutters about how she'd rather leave Eastland than go through this torture. When Blair's all, "Wuh?" Natalie explains to her that Jo's scholarship is being cut off next semester, and that everyone would appreciate it if she could put in a good word for Jo with the staff at her family's foundation. Blair scrunches her face in confusion, since apparently she wasn't aware that her family had any kind of scholarship fund...but after thinking it over for a few seconds, she says she'd be more than willing to make a call and ensure that Jo gets the scholarship money she needs. She smarmily tells Jo it's not necessary for her to feel humbly indebted to her, 'cause giving to poor people is a way of life for the Warners. Jo gets all pissy and snaps, "I don't want yuh help!" and says she refuses to grovel at her feet. Blair gets annoyed at her bitchy snarliness and accuses her of being ungrateful. Tootie tells Blair that Jo didn't mean it - but Jo insists she did, and says she's going to figure out a way to stay at Eastland by paying her own way. Blair rolls her eyes and shakes her head in frustration.
Jo is running herself ragged selling ugly sweatshirts and performing services for her schoolmates, like laundry and typing term papers. Blair jokingly asks her if she's made her first million yet, and Tootie chides her for her bitchitude and urges her to buy one of Jo's ugly sweatshirts...'cause if the other students see her wearing one they'll all follow suit, her being such a trendsetter and all.
Mrs. Garrett tells Jo that her fundraising efforts are not sustainable, plus she's not going to have enough time to devote to her studies. She urges her to call her mother, but Jo snaps back that there's no point, 'cause her mother doesn't have the kind of dough it takes to pay Eastland's pricey tuition. Mrs. Garrett backs off, then begs her to apply for the Warner scholarship, since the chances of it being awarded to her are astronomically high. Jo snarls about how she doesn't want any of Blair's money, so Mrs. Garrett tells her to stop being a self-destructive douche, clue in to the fact that it's not Blair's money (per se), and realize that the foundation is staffed with people whose job it is to help out underprivileged urchins like herself. Jo stubbornly refuses to accept help from anyone who has the last name Warner and insists that she has everything under control. Mrs. Garrett says she needs to be realistic about how much she can earn selling sweatshirts and doing peoples' laundry, but Jo just shuts down and mutely glares into space. Natalie, meanwhile, admonishes Blair for not doing more to help Jo and says if she doesn't step up and do something, like asap, there's a strong possibility that Jo will be gone next semester. Blair scrunches her face concernedly and contemplatively stares into space.
When the reality of her dire financial situation sinks in, Jo glumly mutters, "I never thought I'd say this, but I'm licked." She concedes that she's gotten nowhere after busting her ass for the last three weeks, and says she should probably call her mother to let her know the sitch. Before she heads over to the phone, Mrs. Garrett bursts in and excitedly tells Jo she has great news, and announces that this year's scholarship from the Warner Textile Foundation is being awarded to...Jo Polniaczek! Jo looks thrilled, but then wonders aloud how a person can be awarded a scholarship they never actually applied for. Right? Mrs. Garrett casts her head down in an attempt to look sheepish, and Jo assures her she's pleased that she interfered in her life this way. She tells her she's glad she didn't listen to her stupid ranting and raving and thanks her. Mrs. Garrett cheekily says, "You're welcome...but it wasn't me" and everyone's all, "Wuh?" and then stares over at Blair. Jo slips back into her default crusty-bitchy mode and snaps, "You just couldn't keep your hands out of my life, could you?! I said I didn't want your crummy scholarship!" An annoyed Mrs. Garrett reminds her that she was thrilled with the scholarship a minute ago, and Jo mumbles, "That's different" and explains that since Blair helped her get it, she feels like she's going to owe her for the rest of her life.
Mrs. Garrett, Natalie, and Tootie disappear into the kitchen to get dinner started. Jo continues to glare at Blair and whine about her wounded pride, and Blair's like, "Who gives a crap about pride?" and reminds her that her Eastland education is at stake. Egads! She tells Jo that even though she drives her crazy (mmm hmm), she doesn't want her to leave...and can admit that she considers her a friend, even if she (Jo) can't. Jo weakly replies, "I can admit it" so Blair says she's going to have to allow her to do something nice for her, no strings attached. Jo snaps, "But then I owe you, don't I?" so Blair explains that one owes creditors, not friends. Jo finally de-snarls and shuts her pie-hole, and Blair tells her that as friends they can get through these kinds of things together...and the two lock eyes and smile.