Higher education, as one of the most critical components of the education system, forms a certain level of knowledge, skills, and abilities that can be applied to relevant activities. The graded nature of higher education means obtaining different educational and qualification levels (characteristics that determine the degree of knowledge, skills, and abilities of a person that help to perform tasks and duties of a certain level of professional activity) at the appropriate stages (degrees) of higher education. Adopting such a branched scheme is of fundamental importance because it guarantees a person freedom of choice and provides an opportunity to receive education following mental and professional abilities. The education sector currently needs more solutions to such problems as instability and limited funding for educational institutions, social protection of teachers, the decline in material resources, and restrictions on textbook publishing. Rural schools face challenging conditions. There are 14.9 thousand schools in 28.9 thousand population centers, 2.8 thousand requiring significant repairs, and almost 800 schools are in disrepair. In rural areas, only a few thousand students study in new-type institutions, while a thousand urban lyceums, gymnasiums, and colleges have 200,000 students. The aim of the educational process is the overall development of a person as a personality and the highest value of society, the disclosure of their talents and mental and physical abilities, and the formation of morality. Higher education should form a citizen capable of consciously making social decisions and, on this basis, enrich society's creative, intellectual, and cultural potential, thus producing qualified specialists for the national and global economy. This article aims at identifying the main tendencies in the formation and development of modern higher education in terms of its place in the educational system and the role played by higher education in the economic and social space of the country. Methodology. The research used the analytical and bibliographic methods to study the scientific literature on the development of the higher education system, as well as induction, deduction, analysis, synthesis of information, systemic and structural, comparative, logical and linguistic methods, abstraction, idealization for studying and processing data, and an online questionnaire survey conducted by the research authors to practically clarify the most critical issues related to the peculiarities of the higher education system development in Ukraine. Results. Based on the study results, we identified the central, most important theoretical aspects of the work of higher education institutions. We also studied the opinion of scientists, heads of departments, and faculties of HEIs on crucial elements of this issue.