The current study is carried out to know the impact of fee- reimbursement schemes on the quality of Higher education in Telangana state. This study is based on descriptive research that sought to explain the phenomena under investigation. The primary data is gathered from a sample of 300 students by administering a structured questionnaire specially designed for

the purpose. Statistical techniques like correlation coefficient and chi-square test were used to know the significant relationship between impact of fee-reimbursement scheme on higher education. It is observed from the study that student’s higher education is depending on their parental income and occupation. 48.57 percent of the respondents are strongly agreed that they are failed in the exams as preparing for government jobs and not attending regular class work due to fee-reimbursement and followed by 28.57 percent are studying for the sake of degree only. Majority of the respondents opined that the state government should continue fee reimbursement scheme to help the students who are below poverty line for continuing their further education.