Intelligence, academic achievement and an unfavorable discrepancy between them (i.e., underachievement) have been proposed to influence students’ subjective well-being. However, previous research on these effects remains scarce and inconsistent. The present study examined the associations between said variables in a sample of 695 fifteen-year-old students in Germany, differentiating between those with and without a migration background. Our findings unexpectedly revealed that students with a migration background reported higher life satisfaction than those without a migration background. Intelligence was unrelated to life satisfaction, regardless of migration background. Academic achievement, measured by the grade point average, was positively associated with life satisfaction among students without a migration background but showed no such relationship in students with a migration background. Segmented regression analyses further indicated that an unfavorable discrepancy between IQ and grade point average, reflecting underachievement, was associated with lower life satisfaction among students with a migration background but not among those without. These findings partially challenge previous research and theoretical assumptions. We discuss the theoretical and practical implications of our findings for educational policy and emphasize the importance of targeted interventions to address underachievement in students with a migration background. Our findings suggest that poor academic performance can have a particular impact on well-being in this group. Accordingly, interventions aimed at reducing the achievement gap of those students should not only target cognitive and academic skills but also promote emotional support, cultural inclusion and social integration in the school environment.