Unmasking Financial Stress: A Critical Examination of its Influence on Academic Achievement and Mental Well-Being in University Students

Financial stress has emerged as one of the most critical challenges affecting university students worldwide. Rising tuition fees, increasing living costs, and limited financial aid have impacted students’ academic performance and psychological well-being. This study investigates the effect of financial stress on academic outcomes and mental well-being among higher-education learners using a quantitative research approach. A sample of 350 students from multiple universities was surveyed using standardized Likert-scale instruments. SPSS statistical analysis including descriptive statistics, correlation, and regression was applied. Results revealed a strong negative relationship between financial stress and academic performance (r = −.430, p < .01) and a significant positive association between financial stress and poor mental well-being (r = .571, p < .01). Regression results confirmed that financial stress significantly predicts academic decline (β = −.557, p < .001), explaining 31.1% of the variance. Mental well-being emerged as a significant mediating variable. The study concludes that reducing financial stress through institutional support, scholarship programs, financial counselling, and mental-health interventions is crucial for improving student success and psychological resilience.