Contemporary education across the globe has increasingly been shaped by technocratic rationality, prioritizing employability, measurable outcomes, digital efficiency, and market-oriented skills over holistic human development. While such orientations have enhanced technical proficiency, they have simultaneously coincided with a significant rise in student distress, manifesting as anxiety, alienation, burnout, and loss of meaning. This interdisciplinary paper argues that literature functions as a protective humanistic resource capable of mitigating student distress by cultivating sympathy, empathy, emotional resilience, ethical imagination, and a sense of purpose. Drawing upon literary studies, psychology, education, and philosophy, the study critically examines the limitations of technocratic education and reasserts the humanistic role of literature. The paper further integrates an indigenous Indian philosophical perspective through the thought of Sree Sree Thakur Anukulchandra, whose conception of art and literature emphasizes enthusiasm, disciplined joy, service, and aspirational becoming. The study contends that reintegrating literature into contemporary curricula is not merely an aesthetic or cultural necessity but a pedagogical and ethical imperative for student well-being in the twenty-first century.