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The purpose of the paper is to study the experience of increase of quality of education as a result of digital modernization of the educational market in modern Russia’s regions based on technologies of Industry 4.0 with the help of reorganization of regional universities and to develop recommendations for optimizing the practice of managing this process in modern Russia in the interests of the fullest implementation of the potential of mentioned problem. The research is performed by the example of the regions of the Volga Federal District of the Russian Federation. The authors perform analysis of the achieved results of increase of quality of education as a result of digital modernization of the educational market in regions of the Volga Federal District of the Russian Federation based on technologies of Industry 4.0 with the help of reorganization of regional universities and perform modeling of scenarios of increase of quality of education in this regions based on technologies of Industry 4.0 through reorganization of universities and develop recommendations for practical implementation of the most optimal scenario. This envisages the increase of quality of education in mentioned regions based on technologies of Industry 4.0 through reorganization of universities. The methods of horizontal, scenario, and regression analysis are used. It is substantiated that as of now (2019) Russia has not achieved significant results in the sphere of increase of quality of education during digital modernization of universities based on technologies of Industry 4.0 in the process reorganization (formation of regional flagship universities). The authors also try to solve the different aspects of this problem. [ABSTRACT FROM AUTHOR]