Believe it or not he is actually referring to joining up with his friend Biggs Antilles in the IMPERIAL ACADEMY on not Tatooine but nearby planet Carida, meaning before the droids and Ben came along he was actually going to join up with the Empire probably with the intent of becoming a Tie Fighter pilot. This is actually explained in some EU I can't remember at the moment, but Han Solo, Biggs, Porkins and some other people all defected from the Imperial Academy and joined the Rebels.
In ANH the Rebels were probably considered a hopeless myth to some farmboy on Tatooine, and the most logical career choice for him was the equivalent of joining the army of an evil Empire and putting his experience piloting his uncle's T-16 Skyhopper to the test. At the time of meeting Ben I don't believe either Luke knew about Bigg's defection or he actually hadn't defected until sometime closer to the Battle of Yavin.
Thanks, I suspected it may have been an Imperial academy, as it's the only logical choice, but what gives Leia the right to be a princess? If I ran a galactic empire there'd be no room for royalty. I suppose the Emperor could have given the title to Bail Organa and his family as part of some political maneuver, but why that one world when he made all the others bend the knee with relative ease?