Education for sustainable development (ESD) serves as a promising approach to foster students’ sustainability competencies amidst the current global sustainability crisis. This paper addresses a noticeable gap in ESD research on ‘how’ and ‘why’ the informal student-led science, technology, engineering, arts and mathematics (STEAM) learning spaces are helpful to make university students competent as sustainable citizens. In this paper, a framework is presented based on a synthesis of key findings and arguments from literature, particularly with an aim to support institutions in fostering sustainability competencies among university students. The framework proposes that universities can essentially integrate and draw inspiration from four crucial learning settings—informal learning environments, student-led spaces, transdisciplinary science, technology, engineering and mathematics (STEM) education and STEAM education. An integral aspect of the framework is using transformative pedagogies as the primary drivers of the cumulative learning space that lies at the intersection of these learning settings. The proposed framework is a tangible and replicable model for universities who seek to design effective ESD interventions that leverage the power of student-led spaces, bringing together multiple disciplines and perspectives in an unprecedented way.