Canada's Pagulayan, one of the world's leading nine-ball pool stars, had surprised many with a run of wins having swapped blue baize for green, but the player nicknamed The Lion wasn't able to kill off his final opponent.
However, having won several matches in both Q School events, the 37-year-old, who was born in the Philippines, will have the chance to enter to certain ranking events during the 2014/15 season as a 'top-up' amateur.
Stoke's 23-year-old Highfield, who has been on the tour since 2010 but dropped off at the end of last season, won 4-2 today with top breaks of 58, 60, 61 and 78.
"The last six to eight months have been very tough for me," said Highfield. "I've had some problems away from snooker and was feeling down with life. So it's great to have a positive now. Three months ago I swapped clubs, to the Reardon in Stoke and that has turned my life around. I want to say thanks to my mentor Dave Deakes who has helped me so much.
"When I first got on to the tour four years ago, I took it for granted and just assumed that I would be there for life. Since then it has been a downward spiral. But now I feel confident again and I am a much better player now. This a chance to draw a line under the last four years and start again."
Highfield also had some kind words for Pagulayan, adding: "I've got quite friendly with him over the last ten days. He has a very good mentality and he has put his heart into trying to qualify. I think he'll play in events as a top-up player and he will keep improving.
"He plays some clever shots which snooker players might not see, and equally he doesn't see certain shots because of his pool background. If he can learn more about snooker he will give anyone a game."
Welsh 38-year-old Lee Walker, who reached the quarter-finals of the World Championship in 1997 and last played on the pro tour in 2008, regained his place by beating Joe O'Connor 4-1 with a top break of 40.
"I entered Q School because I finished top of the Welsh rankings so I got a free place, plus Gloucester is only 15 minutes drive for me," said former world number 42 Walker. "I do a lot of coaching now and I'm not going to stop that, but I will be able to mix it with playing on the tour.
"I never really stopped playing, though these days I do five hours a week rather than five hours a day. I'm not looking any further than the next two years, but if I had one ambition in snooker it would be to play at the Crucible one more time, I really love it there."
Michael Georgiou, a Londoner of Greek-Cypriot descent, earned his tour card by beating Ashley Carty 4-2 with a top break of 67.
Former World Under-21 Champion Georgiou played one season on the main tour in 2008/09 and was also a member of the 'Hot-Shots' campaign which aimed to raise the profile of young players including Mark Selby and Mark Allen.
After dropping off the tour, Georgiou played one season on the amateur circuit then decided to give up snooker and started a career in recruitment.
"I was doing a 9-to-5 job, sitting behind a desk," said the 26-year-old. "But I always kept an eye on snooker and when I saw how the sport had changed and the opportunities that are there now, I decided to give it another try.
"Now I'm back on the tour which is a big relief and reward for the hard work I have put in over the past year. I practise with Tony Drago a lot and he has helped me, and I also have games with Marco Fu and Barry Hawkins. My ambition now is to start winning matches and work my way up the rankings, starting at the qualifiers in a few days."
Michael Leslie took the last place by winning a Scottish derby against Eden Sharav, coming from 2-0 down and taking the decider 75-16. Leslie, 21, dropped off the tour at the end of last season after two years as a pro, but showed signs of improvement in recent months, particularly in beating Jack Lisowski in the first round of the UK Championship.
"There was a lot of pressure on the last frame today but I felt really good throughout the match," he said. "My dad had a stroke a few months ago so it has been a tough time. I just wanted to be able to ring him today and say I had got through so I'm so glad I can do that.
"Last season I proved to myself that I can beat good players. So if I hadn't got back on via Q School it would have been a nightmare. Now I have a chance to kick on and start qualifying for a few venues."
Today's quartet of winners join Tian Pengfei, Zhang Anda, Chris Melling and Craig Steadman as the eight qualifiers from 2014 Q School. The main tour season gets going with the Wuxi Classic qualifiers, starting on Saturday.
Ball by ball scoring and results from tournaments