An emergency shift to online education after COVID-19 brought many challenges for students and teachers, especially the university students living in the rural areas of Pakistan. So this study has focused on assessing the problems students faced while acquiring online education with special reference to the theoretical background of digital divide. It is a quantitative study which employed Heckman's treatment effect model to analyze the impact of digital divide on university students' performance. The results of the study indicate that online education further increases an already existing digital divide between have and have nots. Online education is a good alternate of face-to-face education in many cases however for ensuring maximum benefits of online education requires proper availability of gadgets and internet access along with training. Existing online education system in developing countries like Pakistan may be more suitable to teach theoretical subjects like social sciences which are subjective in nature however it is not much appropriate for teaching numerical subjects. The findings of the study direct a positive impact of digital divide due to the scarcity of necessary gadgets, internet access, family income, gender, field of study, age and location.