Psychological capital and its sub-components—hope, efficacy, resilience, and optimism (Luthans et al., 2004)—have been proven to enhance student well-being and decrease their sense of loneliness. The World Health Organization identifies social well-being as a fundamental health aspect because it measures how well people connect with their social communities and perform their social roles. Students commonly experience loneliness, which researchers consider equivalent to social isolation (Caciopo & Hawkley, 2010). Research has investigated PsyCap and social well-being separately, but no studies have examined whether loneliness mediates between psychological capital and social well-being. Our research investigates how loneliness functions as a mediator between psychological capital and social well-being among undergraduate students at a residential institution in northern India. We approached about N≥245 sophomores schematically in a stratified manner and distributed the Psychological Capital Scale-Student Version (PsyCap-S), the UCLA Loneliness Scale, and five social well-being items (items 4-8) from the Mental Health Continuum-Short Form (MHC-SF) to acquire data. We used a structural equation modeling (SEM) approach to evaluate the connections between our study variables. We predicted that psychological capital would have a negative relationship with loneliness but a positive one with social well-being. College students who have higher levels of positive psychological capital tend to feel less lonely, thereby enhancing their social well-being. We ultimately propose interventions that focus on alleviating loneliness through PsyCap-based programs that may presumably impact their campus life in a positive manner.