Alexander Payne has gone back to school with “The Holdovers,” an outstanding student-teacher dramedy that’s a bit “Dead Poets Society” but way more “Welcome Back, Kotter.”

The “Election” director is coming for Oscar season, and also people’s all-time Christmas movie lists. His new holiday-themed outing (★★★½ out of four; rated R; in select theaters Friday, nationwide Nov. 10) features a 1970s aesthetic, a clever script and great performances from Paul Giamatti, Da’Vine Joy Randolph and newcomer Dominic Sessa. And while “Holdovers” is plenty funny, Payne’s film – as with his “Sideways” – skillfully balances the humor with headier themes of personal loss, family strife and mental health.

In December 1970, the faculty and student body of New England’s Barton Academy are readying for a needed break. Well, most of them. Paul Hunham (Giamatti), the uptight and universally disliked teacher of ancient history who refers to his students as “reprobates” and hands out F-pluses with zest, has been chosen to stay at school for two weeks. He's tasked with overseeing a handful of boys over the holidays – the punishment for flunking a senator’s kid.

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Angus Tully (Sessa), Paul’s best student whose snarky attitude alienates him among his wealthy and entitled peers, was looking forward to a needed vacation but is instead abandoned by his family. His wild energy and anarchic streak butts up against Paul’s strict demeanor, leading to dryly hilarious banter, hallway shenanigans and a trip to the hospital. 

Slowly, though, the two begin to tear down each other’s walls and bond, learning they have more in common than not. And over late-night game shows and a revelatory field trip to Boston, the pair also form a mini-family with head cook Mary Lamb (Randolph), whose Barton grad son recently died in Vietnam. Their friendship reveals significant truths and they all stand up for each other at important times.

Rather than merely recalling the era, Payne makes you actually feel like you’re watching in a theater in 1970, with pops and crackles in the soundtrack and the use of desaturated colors, fades and pans. (The modern price of a popcorn and soda will rip you back to present-day reality, sadly.) And given the period, the specter of war looms over the narrative: The troubled Angus worries about being kicked out of the academy because it would mean going to military school and being sent off to an uncertain fate.

As the brainy and devil-may-care Angus, 21-year-old Sessa is a revelation in his first screen role – he was plucked from one of the boarding schools where Payne filmed but already turns in an Oscar-ready performance sparking off Giamatti.

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The elder actor is a master of playing the film curmudgeon: As the wall-eyed, boozy professor, Giamatti makes a meal out of “snarling visigoth” and other high-minded insults in David Hemingson’s crackling screenplay but also reveals his character’s lovable, vulnerable side. The teacher is a needed compatriot for Mary, and Randolph shines in the comedic moments as well as the emotional bursts of a grieving mom missing her son at Christmas.

“The Holdovers” does have the makings of a retro holiday classic. Although the movie runs a bit long and the plot is flabbier in its latter half, Payne’s heart-tugging effort doles out lessons and personal growth for its players while gifting audiences with a satisfyingly cathartic and enjoyably human tale.