South Africa’s higher education system is often described as being in a constant state of crisis. Ironically, that description largely covers countries throughout the world at present.
For the first time in our recent higher education history, we can say that, while we may be equally underfunded (as compared to our international counterparts), we are, in some instances, more stable and fixed than many prestigious United States institutions under Donald Trump’s administration.
Where South Africa differs is that we face a capacity problem stemming from historical governance challenges.
Our roots are from a deeply entrenched authoritarian colonial past, officially shaped by the 1957 and 1959 Acts that excluded black learners and students from classified white institutions. It is difficult to determine how long a nation’s psyche will live with the scars of this abominable exclusionary praxis.
Until the latest Act, our higher education system has been affected by an ideology of authoritarian exclusion. Another consequence of this separation is that public and private higher education operate in largely unrelated spheres.
In practice, private institutions now educate close to a third of South Africa’s higher education students. Until recently, however, they have remained marginal, excluded from funding frameworks, system planning and public debate.
High-profile institutional failures and the continued presence of unaccredited providers have shaped a narrative in which ‘private’ is often treated as an indicator of ‘low quality’. This perception gap has had consequences: it has allowed private higher education to grow surreptitiously, outside the core of system planning.
Equal quality providers
However, this is changing as the perception of private higher education institutions (PHEIs) is better understood as equal-quality providers, accredited and registered under the same legislative framework as their public counterparts.
Public higher education institutions are experiencing low growth rates between 0% and 1.6% per annum. This is in stark contrast to the 6%-7% average growth observed by PHEIs, with some large PHEIs performing well above these ratios, demonstrating sustained growth well over 20% per annum in recent years.
Given the current trajectory and working on an optimistic benchmark of 1% growth for public universities and a conservative 6% for PHEIs, it is projected that, by the very latest, there will be more students enrolled in private institutions than in public ones by 2049. This raises important questions about funding, quality assurance and system governance.
We pose a critical question. For an extended period, and for evident reasons, public higher education institutions have garnered public attention, both for their laudable achievements and, at times, woeful governance missteps.
However, this fixation on public higher education oversight misses that private higher education institutions will surpass them in student enrolment, despite receiving no funding support at all from the government while still shouldering a 27% corporate tax burden.
Furthermore, many of the PHEI students belong to the infamous missing middle. What, precisely, are private higher education institutions doing that is leaving traditional universities behind?
The quiet explosion of private provision
Today, PHEIs enrol over 350,000 students, representing approximately 30% of the national higher education cohort. Over the past decade, while public university enrolments have remained largely static at 1.1 million students, private enrolments have grown steadily.
This growth has not been driven by demand from a magical elite of wealthy students. Unlike private schooling, private higher education in South Africa is not primarily a site of wealth. Many PHEIs operate in peri-urban and underserved areas, offering blended online models that cater to first-generation students and working adults who are unable to relocate to traditional university centres.
The public system leaves tens of thousands of academically eligible learners without a place annually. Public universities can accommodate only around 210,000 first-time entering students annually, leaving a substantial number of academically eligible learners without placement unless private higher education institutions and other post-school providers absorb this demand.
Across the world, higher education systems are under strain. Participation has expanded faster than public funding, while student populations have diversified and labour markets have become more volatile.
Organisation for Economic Co-operation and Development (OECD) data show that in many middle-income and emerging economies, private providers have absorbed a growing share of enrolment growth, often stepping in where public capacity or public finance has reached its limits.
The World Bank has made a similar point more bluntly: without harnessing all available institutional capacity, countries will struggle to meet rising demand for post-secondary education, particularly among first-generation and working students.
South Africa fits this global pattern neatly. Despite ambitious policy goals, participation in higher education remains low.
The National Development Plan set a target of 30% participation among 18- to 24-year-olds by 2030, yet the figure remains closer to 22%, negatively impacting the demand for skilled and qualified labour.
The funding contradiction
Private higher education students are excluded from the National Student Financial Aid Scheme (NSFAS), the government’s bursary scheme for qualifying students, and ongoing missing-middle promises persist, despite studying in programmes accredited under the same national framework and often coming from the same socio-economic backgrounds as their peers in public universities.
Access to funding is, therefore, determined, not by need or merit, but by institutional type and historical bias. This naturally raises the crucial question: given the current trajectory, what will occur when the number of private students, particularly those eligible for NSFAS funding, surpasses that of public institutions?
In the face of growing pressures and fiscal constraints on public universities, as well as the continued dilution by the Department of Higher Education and Training of universities’ higher education budgets being given to NSFAS and the government’s inability to build new universities, we hold firmly that South Africa would do well to convert the 27% tax PHEIs pay into a tax credit that could be converted into bursaries to expand access for NSFAS and missing-middle students.
The proposal introduces a narrowly defined, outcomes-based tax credit mechanism that would operate as an offset against the corporate income tax otherwise payable, limited to the value of qualifying bursaries awarded to students who meet NSFAS eligibility and means-testing criteria.
Currently, the contradiction in financial support for students is difficult to defend in policy terms. Internationally, the trend has been towards student-centred funding models. The case of Uzbekistan is particularly relevant here. The World Bank has long argued that such models can expand access without undermining public oversight, provided safeguards against inferior provision are in place. South Africa’s current approach does the opposite. It reinforces institutional hierarchies while leaving large segments of the system outside the reach of public policy levers.
If funding is only one part of the problem, student mobility is another. Despite the National Qualifications Framework intentions, articulation and credit transfer between public and private institutions remain limited. Students who begin their studies in one part of the system often encounter significant barriers when attempting to move across institutional boundaries, even where curricula overlap.
This rigidity undermines efficiency, prolongs time-to-completion and entrenches inequality. It also runs counter to global trends, particularly in micro-credentialing. OECD countries increasingly emphasise stackable credentials, lifelong learning pathways and recognition of prior learning as central to system resilience and future growth.
Much of the resistance to integrating private higher education stems from a fear of marketisation. Critics worry that recognising private provision will erode the public-good character of higher education or divert resources away from public universities.
However, the choice is not between public universities and private institutions. Public universities remain central to South Africa’s higher education system, particularly in research, postgraduate education and knowledge production.
The real choice is between unmanaged expansion and coordinated governance. Private institutions already play a significant role in access, skills development and employability. Treating them as competitors rather than complements obscures their contribution and weakens the system as a whole.
Labour markets, access and governance
Despite South Africa having the second-highest youth unemployment rate globally, graduate unemployment in South Africa is a growing concern; however, it remains significantly lower than overall unemployment, particularly at the bachelor degree level rather than the technical and vocational education and training, or TVET, level.
According to recent unemployment statistics from Statistics South Africa, the unemployment rate for degree holders is in the region of 10%, while those with lower qualifications is exponentially higher. Expanding access to quality post-school education remains one of the most powerful tools available for reducing inequality and improving economic participation.
Private institutions have shown particular agility in developing industry-aligned programmes, micro-credentials and work-integrated learning pathways, areas increasingly emphasised by both the OECD and the World Bank as critical to workforce development.
Globally, the most effective mixed systems are those in which the state acts as a system-steering force rather than a sectoral judge and executor. This means setting clear public goals, aligning funding and regulation to those goals, and holding all providers accountable for outcomes. For South Africa, this implies a shift in the role of the Department of Higher Education and Training: from overseeing parallel sectors to coordinating a single ecosystem.
It entails planning capacity across institutional types, strengthening articulation pathways, and ensuring that quality assurance focuses on outcomes, while recognising that, unless the DHET strategically shapes the ecosystem’s pathways, participants will begin to forge their own.
The central policy question is no longer whether private higher education belongs in the post-school system. Enrolment data, student choices and institutional growth have already answered that question. The real question is whether the state is prepared to govern the system as the integrated reality that is already taking form. In a country where higher education remains one of the strongest levers for inclusive growth, the cost of pretending it is business as usual will inevitably fail the system.
Not only in South Africa, but also in many other countries, governments are grappling with how to expand access, maintain quality and respond to labour-market change in financially constrained environments. As the OECD and World Bank have repeatedly observed, mixed public-private higher education systems are now the global norm.
The question is no longer whether private provision exists, but rather how governments, and South Africa, in particular, choose to oversee it. Between the state, private and public higher education institutions and the private sector, there is still time for a reticulated network of purpose-driven leadership from community colleges to micro-credentials and an entrenched place on the National Qualifications Framework.
Or [it could result in] self-interested chaos and more lurching from one crisis to the next. It is down to how South Africa uses this crisis with wisdom and foresight.
