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The pandemic has brought in unprecedented changes in societies across the globe. It has altered the equilibrium and forced individuals to move out of their comfort zone, leading to disturbance in psychological well-being in the new normal (Kuster, 2021). This empirical study examines the effect of psychological well-being (PWB) on subjective happiness (SH) of students of higher educational institutions (HEIs) during the global pandemic. Total of 290 students of HEIs were administered with the PWB questionnaire and SH questionnaire. The relationship between the variables was examined using multiple regression. The results indicated that the SH levels of the sample were above average (M = 19.76). SH was found to be more in women. No gender difference was found in PWB levels. The findings also revealed that improving PWB will positively influence the SH (r = 0.581) of the students. PWB can explain 32% variation of SH. Self-acceptance (p = .01), autonomy (p = .01), positive relationships with others (p = .03), and personal growth (p = .002) increases the feeling of SH. The findings validate the set point theory that while recent life events influence SH, individuals tend to return to natural set point over a period in time. The findings add to the repertoire of research on PWB and SH in the context of Set point theory. Study findings can help in strategizing the student counselling process as well as curriculum design of HEIs to ensure greater SH of its stakeholders.

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