Several days in advance: Make mortarboards. Mix a 1 1/2 in. ball of white fondant with 1/2 pack of blue fondant. Add 1/2 teaspoon Gum-Tex each to 3 in. balls of blue and white fondant. Roll out 1/16 in. thick. Cut squares using largest Cut-Out. Let dry on cornstarch-dusted boards.
Ice cupcakes smooth. Pipe tip 3 dot eyes, pupils, nose and cheeks (flatten and smooth with finger dipped in cornstarch). Outline and pipe in tip 3 mouth. Pipe tip 2 bead tongue. Add tip 3 swirl hair.
Attach mortarboard with icing. For tassel, roll out yellow fondant 1/16 in. thick. Cut a 1 1/2 x 1 in. rectangle; cut slits 1/2 in. deep on one long side. Roll up to form tassel; shape a rounded top just above fringe. For cord, cut a strip 1/4 x 2 in. long; press tassel on cord. Attach to mortarboard with damp brush. Roll a 1/4 in. fondant ball for button and attach to top with damp brush.
*Combine Red-Red with Christmas Red for red shown.