The re-entrant volume phase transition of poly(N-isopropyl acrylamide) gel in ethanol-water mixtures has been predicted by using the extended lattice-fluid-hydrogen bond (LFHB) theory. In our calculations we do not make any arbitrary assumptions for the polymer-solvent interaction parameters. Instead, we determine the interaction parameters by fitting the LFHB theory to the swelling data of the gel in each of the solvents. In addition to predicting the re-entrant transition, the theory predicts selective absorption of ethanol over water, particularly by the collapsed gel. Simultaneously, the hydrogen bonding between water and ethanol is predicted to be enhanced in the presence of the gel. The interpolymer hydrogen bonds increase during the gel collapse region. The polymer-ethanol hydrogen bonds increase and the polymer-water hydrogen bonds decrease continuously with increasing ethanol composition in the outside phase. These predictions are in qualitative agreement with experimental observations and overcome the empiricism in previous theoretical work. A variety of qualitatively different swelling behaviors of gels in mixed solvents is also predicted for varying hydrophilic-hydrophobic balance in the chemical structure of the gels.