Nationwide, school principals are given wide discretion to use disciplinary tools like suspension and expulsion to create a safe learning environment. There is legitimate concern that this power can have negative consequences, particularly for the students who are excluded. This study uses linked disciplinary, education, and criminal justice records from 2008 to 2016 in North Carolina to examine the impact of principal-driven disciplinary decisions on middle school student outcomes. We find that when principals are more likely to remove students, this leads to reductions in reported rates of minor student misconduct. However, this deterrence comes at a high cost—these harsher principals generate more juvenile justice complaints and reduce high school graduation rates for all students in their schools. Students who commit minor disciplinary infractions in a school with a harsh principal suffer additional declines in attendance and test scores. Finally, principals exhibiting racial bias in their disciplinary decisions also widen educational gaps between white and black students.