This paper investigates the crucial importance of digital literacy in higher education and its relevance in equipping students for the changing requirements of the contemporary job market. The growing dependence of sectors on digital tools and platforms has generated a critical demand for graduates who possess sophisticated digital capabilities. The present paper investigates the optimal integration of digital literacy into the curricula of higher education institutions while considering the potential advantages and obstacles linked to this integration. Significant obstacles, such as constraints in resources, inadequate training of faculty, and different degrees of digital competence among students, are recognized and examined. Furthermore, the study outlines methods to improve digital literacy, including curriculum restructuring, cooperation with industry partners, and the integration of practical learning opportunities. By highlighting the importance of digital literacy, this paper aims to give educators, policymakers, and institutions actionable insights to better prepare students for the workforce of the future.