Mental stress can be one of the most prominent factors of failure or poor performance in students. The traditional method of examination involves evaluating performance of students in limited time that may increase their stress level and may deteriorate their performance. Electroencephalogram (EEG) is one of the most commonly used methods to measure stress using brain waves. In this study, we investigate the influence of time limitation in exam on the performance of students and use EEG to explore the contribution of stress towards the change in performance. For this purpose, students performed mental arithmetic task (MAT) based on Montreal Imaging Stress Task of same difficulty level twice; once with time limitation accompanied by feedback for every question to induce stress and once without any time limitation and feedback. We observe vast difference in performance of the students for the two MAT tests and significant change in the power spectral density of theta, alpha, and beta frequency bands associated with increase in stress level for three chosen electrodes in EEG results. Our results show that stress may be one of the major factors for bad performance of the students in the exam resulting in failure.