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This paper examines equity and wellbeing as intertwined yet ambiguous policy goals in education through a multi-level institutional lens. By synthesizing literature from sociology, political science, policy studies, and organizational theory, I analyze how certain conceptualizations of equity and wellbeing become legitimized while alternatives are marginalized. This institutional perspective reveals how dominant deficit-based discourses are reinforced through reciprocal macro-micro processes, impacting policy adoption, resource allocation, and possibilities for social change in education. The study contributes to a more nuanced understanding of the complex dynamics shaping educational discourse and practice, offering insights for researchers, policymakers, and practitioners seeking to create more equitable and supportive learning environments.