Higher education plays a very important role in the development of an academic progression of a student in order to foster for career advancement and enrichment. For the purpose of creation and transmission of knowledge and information among students and researcher, higher education plays a very key role. NEP-2020 is the first education policy of the 21st century and it reinstates the thirty four year old National Policy on Education - NPE, 1986. NEP is formed on the fundamental principles of access, equity, quality, affordability and accountability, this policy is designed on 2030 Agenda for sustainable development goals. It aims is to transform India into a vibrant knowledge society and global knowledge superpower by making higher education more holistic, flexible, and multidisciplinary. NEP-2020 focuses on quality higher education for all by imparting of skills and values that is required for holistic development of a student at each stage of learning. The NEP-2020 is a major step towards the direction which focuses on the holistic development of students by ensuring access, relevance, equity, quality and strong fundamental learning. National Education Policy (NEP) 2020 objective is to transform education system by keeping the learner at the centre. This paper traces out the impact of new education policy 2020 on higher education system and to determine the factors that effect on higher education system and to find out the solutions to overcome the challenges of national education policy system.