This study aims to review the benefits of the extensive establishment of universities in Taiwan after the mid-1990s and the surrounding controversies. Using Japan and South Korea as examples, this study delineated the experiences of higher education reform in these two countries, which can serve as the reference for Taiwanese government to improve related policies. Overall, the extensive establishment of universities can increase citizens’ opportunity to receive higher education and enhance workforce quality in the labor market. However, the results of overexpansion involve the lack of students, the dilution of education resources, the imbalanced quality of universities, and brain drain of grassroots talent. Therefore, according to the specific strategies used in the National University Reform Plan in Japan and the University Structural Reform Plan in South Korea, this study provides two practical suggestions for the governmental administration.