In response to the need for further research on factors influencing university students' well-being during challenging circumstances, this study tests a potential mechanism to unravel the complex relationships between perceived impacts of COVID-19 on psychological health, academic performance, and financial status, subjective well-being, and physical activity. The main objective was to investigate these intricate associations among university students. A nationwide online survey involving 848 Greek-speaking university students (70.8% females, average age = 27.65) was conducted. The results revealed both direct effects of subjective well-being on participants' perceptions of COVID-19 impact on their financial status and psychological health, as well as indirect effects mediated by physical activity. The study also examined gender and age effects. These findings emphasize the importance of empirically examining the outcomes linked to subjective well-being and provide supporting evidence that higher levels of subjective well-being can lead to positive consequences. By shedding light on the interplay between subjective well-being, perceived pandemic impact, and physical activity, this study enriches our understanding of how university students cope with adverse circumstances like the COVID-19 pandemic.