Hopefully students at your college are in fact doing well.

It's possible that while people may seem to be fine, they might not actually be fine.

The world at large certainly isn't fine (pandemic, war, social and political conflict, etc.) and colleges at large don't seem to be fine either if student suicides are any indicator.

My own thinking is that there is a long tail of grief and general distress (not to mention epidemic depression) that will take a while to process.

I've heard similar stories from instructors that student work, even after the return to in-person classes, doesn't seem to be up to the quality level of pre-pandemic work - which doesn't surprise me at all, given the continuing mental load and stress.