This study explores the changes in university autonomy policies and their effect on the development of higher education in Vietnam. The research reveals that the Vietnamese government is encountering a dilemma regarding the development of the higher education sector. On the one hand, current policies on university autonomy enhance the development of higher education, particularly through the acquisition of 'work-ready' skills by university graduates in accordance with new courses taught in English as part of the international curriculum, as well as the expansion of new enrollments, which can improve massification of higher education in Vietnam. On the other, however, some policies can deter universities from turning into a research university because tuition fees then become their main source of funding. Recommendations to solve barriers to the development of higher education sectors according to current policies on university autonomy in Vietnam have been mentioned.