The large proportion of dropout students from higher education has become a major concern in many industrialized countries. Despite consistent evidence of the association between social origin and dropout behaviour, it is unclear through which mechanisms social origin influences trajectories and educational outcomes in higher education, especially in countries with low financial costs for higher education studies. This study builds on the compensatory advantage mechanism to investigate the relationship between social origin, academic failure in higher education and dropout behaviour. Using a French longitudinal survey and event history analysis, results confirm that academic failure in the first year of higher education is a strong predictor of dropout, even after controlling for academic readiness for higher education. Supporting the compensatory advantage hypothesis, students from advantaged backgrounds are much less likely to drop out after academic failure than disadvantaged students and this result also holds for high-performing high-school graduates. These results stress the importance of taking into account the interplay between social origin and academic performance during higher education to reduce dropout behaviour.