Contrary to the popular belief that TQM is a poor fit in higher education sector, this research proposes a Rough Set Theory (RST) based model for grading educational institution using TQM parameters. It is a well established fact that TQM needs major reshaping before it can be effectively applied in higher education sector for quality assessment and improvement. This chapter takes a balance view by employing RST approach in TQM architecture and eliminating the much publicized shortcomings of TQM approach. RST theory has advantage of working on a small size of data containing vague and imprecise information which is widely prevalent in education sector. A carefully drafted questionnaire, containing nine attributes, is used for generating research data from the different stake holders in higher educational institutes of India. Nine modified condition attributes are selected on the basis of literature survey and expert views which are subsequently treated with RST analysis. One decision parameter ‘Grade’ depends on nine independent condition attributes. The resultant model contains only two significant attributes namely, ‘Effective Learning and Teaching’ and ‘Administrative Setup’ which can effectively determine the grading of educational institutions. Results of this study may be utilized to improve the higher education quality through appropriate grading mechanism based on self assessment of quality parameters by the different stakeholders of the education sector. The study confirms that TQM can be useful to enhance both quasi-academic areas such as ‘administrative setup’ along with core academic area ‘effective teaching and learning’.