Psychological well-being is a crucial aspect of students’ personal development, both within the school environment and in the broader community. Mental health and psychological well-being have become topics of growing concern worldwide, particularly in the contexts of education, mental health, and counseling services. Psychological well-being is a crucial aspect of individual development that encompasses self-acceptance, positive relationships, autonomy, mastery of the environment, life purpose, and personal growth. However, various academic and social pressures make individuals, particularly students, vulnerable to a decline in psychological well-being. This study aims to examine: (1) the effectiveness of group counseling in improving psychological well-being; (2) the group dynamics that contribute most significantly to psychoeducational group counseling; and (3) the therapeutic mechanisms linking group dynamics to improved psychological well-being. The method used was a Systematic Literature Review (SLR) following the PRISMA selection flow through four stages: identification, screening, eligibility, and inclusion. This resulted in 15 final articles from the years 2021–2026, which were analyzed using thematic analysis techniques. The results of the study indicate that group dynamics are a key component determining the effectiveness of psychoeducational group counseling. Elements such as cohesion, universality, altruism, interpersonal communication, and the instillation of hope have been proven to be therapeutic factors that promote an increase in participants’ psychological well-being. The conclusion of this study confirms that group dynamics, psychoeducational group counseling, and psychological well-being are three elements that synergistically reinforce one another.
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