Preceded by the University Grants Commission (UGC) in 2002 by a constitutional amendment, the universities were formerly accredited by the UGC established in 1947; the institution was revised 1974 and came its modern form in 2002 under the leadership of Atta-ur-Rahman FRS its founding Chairman, with additional executive reforms granted by the constitution. It operates directly under the Prime Minister and is not subservient to the Ministry of Education. Under a new and revised reforms, the HEC is made responsible for formulating higher education policy and quality assurance to meet the international standards as well as providing accrediting academic degrees, development of new institutions, and uplift of existing institutions in Pakistan. The major developments in the higher education sector occurred under the leadership of Atta-ur-Rahman FRS, the founding Chairman, during 2002-2008. The remarkable transformation in the higher education sector was acknowledged in an article in the world's leading science journal, Nature, in which Rahman was called a "force of nature" After Prof. Atta-ur-Rahman FRS resigned in protest in 2008 due to the suspension of scholarships of thousands of students abroad by the PPP government, the university development programmes slowed down due to cut in budget and introduction of cumbersome bureaucratic procedures.
The HEC also facilitated the development of higher educational system in the country with main purpose of upgrading the universities and degree awarding colleges in the country to be focal point of the high learning of education, research, and development. Over the several years, the HEC plays an important and leading role towards building a knowledge based economy in Pakistan by giving out hundreds of doctoral scholarships for education abroad every year.
At the time of establishment of Pakistan on 14 August 1947, the country had only one institution of higher learning, the Punjab University and among forty colleges expanded to four provinces of Pakistan. Education policy revised by Prime Minister Liaquat Ali Khan who adopted various recommendations of mathematician Ziauddin Ahmad, the government established various universities and colleges in all over the country. This led the establishment of University Grants Commission (UGC) by the constitution in Pakistan in 1947. The same year, Mohammad Ali Jinnah held a National Education Conference (also known as Pakistan Education Conference) of academicians and state holders to revise the policy of higher education in the country, as he stated:
... importance of education and the type of education cannot be over-emphasized ... There is no doubt that the future of our State will and must greatly depend upon the type of education we give to our children, and the way in which we bring them up as future citizens of Pakistan.... We should not forget that we have to compete with the world which is moving very fast in this direction....
Many recommendations were directed and accepted by the government to established the UGC as a federal regulatory institution in 1947. Efforts led by Prime Minister of Pakistan Huseyn Suhrawardy led to the imposition of Soviet-oriented first five-year plans which explained the first official education policy in 1956. The first plan was an attempt to make education development suitable for the socio-economic development in the country.