Having seen this episode, I can tell you about it. (I missed part of Mrs. Puff You're Fired so I don't quite know how everything happened near the end)
Krusty Towers (Which is now my favorite episode of Season 4)
SpongeBob and Squidward arrive at the Krusty Krab to find that it's been turned into a hotel. Krabs explains that while he was staying at a hotel, the employees would do whatever he asked but it ended up costing him heaps (including $25 for a hamburger). Now, for customers to order Krabby Patties they have to get a room and call room service. Patrick orders a room with a Krabby Patty and cheese (he also wants cheese on the Krabby Patty). Squidward is fed up with doing everything Patrick tells him and quits. Squidward stays at the hotel, forcing Mr. Krabs to do everything he asks. Squidward ends up with an indoor pool. Patrick shows up and jumps in. The whole hotel is destroyed. SpongeBob, Patrick, Squidward and Krabs end up in hospital. Krabs finds out how much hospitals cost and tells SB, Squid and Pat to go to medical school.
Mrs. Puff You're Fired
Mrs. Puff's teaching certificate is up for renewal. All of her students have passed except for SpongeBob who has failed over a million times. SpongeBob has to take the test and instantly fails. Mrs. Puff gets fired. The boating school gets a new teacher who is really tough and mean. Everyone except SpongeBob drops out. SpongeBob has to memorize the track (now with more obstacles) until he can drive it blindfolded. SpongeBob is able to do so. He takes another test but can't do it without the blindfold and ends up destroying the city. Mrs. Puff ends up in the boat with them. Patrick's shorts end up on SpongeBob's face working as a blindfold and allowing SpongeBob to park safely. Mrs. Puff's boss sees that it wasn't Mrs. Puff's fault that SpongeBob can't drive and she gets her job back.
