The Foundation used to give grants and loans to educational institutions and conducting short in-service training courses for teachers of private sector schools. In year 2001, it was realized that some fundamental structural and policy changes are needed in FEF to transform it into autonomous Corporate Body as envisaged in its Act. The need was felt to change its structure, methodology, management and rest of the features in order to make it more effective . Managing Director was appointed from private sector w.e.f. January 01, 2002. To promote corporate culture of the Foundation as envisaged in its Act, it was imperative to give it the needed autonomy and freedom in conducting its business. This idea could be realized by restructuring of the organization with reduced staff and managerial positions and a clear mandate was approved in 11th FEF BOD meeting held on 16.03.02. As a result of restructuring, the managerial staff was recruited from open market on merit.

Meanwhile the Govt: of Khyber-Pakhtoonkhuwa through an Ordinance, established Elementary Education Foundation in 2002 and the role of FEF was restricted to colleges and higher education. The grant facility was also discontinued. The Foundation came up with an aggressive Development Plan, which envisaged initially establishment of FEF Degree Colleges for Girls in Khyber-Pakhtoonkhuwa, establishment of Frontier Education Foundation Academy (FEFA) in Kohat for training of college Principals and Lecturers. Other activities like financial assistance for existing and new educational institutions in private sector, holding workshops for in-service teachers and seminars for creating awareness in public continue.