A quiet revolution is brewing in South African tertiary education. The dominant public sector increasingly has to share the stage — and market share — with a burgeoning private higher education ecosystem. Helped by capacity constraints, perceived quality gaps, and an undeniable demand for tertiary qualifications, private institutions are carving out a significant presence (and offering some attractive investment opportunities) by filling the gaps left by the state.
There are 26 public universities and 137 registered private higher education institutions (HEIs) in the country, according to the department of higher education & training (DHET). The listed private HEIs are AdvTech, which owns brands including Varsity College, Vega and Rosebank College; and Stadio Holdings, which offers qualifications under brands such as Milpark Education, Afda and Embury.
Public universities are underfunded, overenrolled and often affected by student protests and administrative instability. While top-tier institutions such as the University of Cape Town (UCT), Wits, Pretoria and Stellenbosch retain global credibility, many others struggle to provide consistent quality and access at scale. The government’s National Student Financial Aid Scheme (NSFAS) has helped broaden access, but incompetence, corruption, funding bottlenecks and rising student debt have exposed structural limits in the system.
Whereas many public universities have various income streams — typically a mix of state grant, research funding and student fees — private institutions rely solely on student fees. Public universities receive government grants that on average make up about 40% of their income. The older high-quality universities also have a global alumni base to tap for substantial donations.
Unlike public universities, private HEIs must also generate profits for shareholders and pay taxes, which adds a commercial pressure that public institutions do not have. Arguably, this pressure drives efficiencies and more structural innovation.
Students at public universities may qualify for NSFAS subsidies. Private colleges get none of that support. Most private HEIs offer limited scholarships or bursaries, often athletic or leadership awards, and promote payment plans or education loans. Stadio runs an annual bursary programme and has partnered with Capitec to offer discounted student loans. Varsity College promotes scholarships for high achievers and sports bursaries, but cannot tap NSFAS.
A key point of differentiation between state and private HEIs remains research output, which is also used to calculate levels of state financial support. Public universities such as Wits and UCT are renowned for their robust research cultures. These institutions boast a significant number of National Research Foundation-rated researchers who contribute extensively to global academic knowledge. Their research endeavours not only elevate their own academic standing but also support international accreditation for the institutions, especially in professional fields such as medicine and engineering.
However, private HEIs, including those within the AdvTech and Stadio groups, have increasingly expanded into postgraduate education, offering honours, master’s and even doctoral qualifications in select fields. Yet their institutional emphasis remains rooted in high-quality teaching, industry-relevant curricula and professional training.
While initiatives such as Stadio’s Bridging Programme in Thesis Success signal a growing investment in research capacity, private institutions generally contribute modestly to national research output. The research orientation of these institutions is still developing, especially when compared with the well-established scholarly infrastructure of public universities.
Meanwhile, administrative instability at Unisa, once a world-class public distance-learning provider, has complicated the higher education landscape, particularly in terms of postgraduate supervision and exam preparedness. Many private HEIs offer tutoring or structured academic support for students who enrol at Unisa. These institutions have effectively capitalised on Unisa’s open-enrolment model, while compensating for its lack of face-to-face interaction and support services. They have marketed themselves as a way to “graduate through Unisa”.
The government’s attempts to maximise enrolment at traditional universities, without commensurate infrastructure and staffing investment, have often led to crowding and capacity strain. This has created fertile ground for private institutions to offer alternatives, especially as employers demand more work-ready graduates and digital learning becomes more viable. With this backdrop, South Africa’s private tertiary sector has evolved from a fringe player to a formal part of the education ecosystem.
Anthony Clark, founder of Smalltalkdaily Research, says there is “a lot of low-hanging fruit” due to the lack of investment by the state in expanding the tertiary system to cope with rapid demand.
“So you’ve got plenty of demand coming into the marketplace every year, which cannot be filled by the government.” Ambitious private entities have stepped into this space, most notably the listed powerhouses AdvTech and Stadio Holdings.
Data from Stadio’s 2024 results presentation estimates that almost half a million eligible grade 12 matriculants do not have access to public universities in 2025. AdvTech tells the FM that “demand for tertiary degrees is expanding rapidly, but public sector capacity in recent years has been relatively fixed. This presents an opportunity for private tertiary institutions to offer places to students who would otherwise have no opportunity to earn a degree.”
The need for quality higher education in South Africa is increasing, and we believe we have a big role to play
— Chris Vorster
Stadio CEO Chris Vorster says: “The need for quality higher education in South Africa is increasing, and we believe we have a big role to play.”
Keith McLachlan, fund manager and CEO of Element Investment Managers, says South Africa has a predominantly young population, which inherently skews towards a higher demand for education. Coupled with a general population growth rate of 1%-2% a year, there is a consistent influx of new potential students seeking access to tertiary education.
“We can also say educational inflation is about 6% a year. So, without doing anything, you’ve already got 8% demographic tailwinds fuelling demand.”
McLachlan says competing in a sector where the state holds a significant portion of market share is generally a defendable investment case. He says private companies that act as an alternative to an often “inferior product or service” can have good business models.
Clark says the near-collapse of Unisa has rendered it “damaged goods”, which also frees up substantial runway for private HEIs. Reports on Unisa from a ministerial task team and an independent assessor revealed financial irregularities, including unapproved salary hikes and procurement breaches. That caused higher education minister Blade Nzimande to consider placing the university under administration. The Mosia report (August 2023) highlighted declining subsidies and rising costs, putting Unisa’s sustainability and the value of its degrees at risk.
Unisa’s student numbers spiked to about 392,000 in 2020 due to Covid, before dropping back to about 340,000 in 2021. By 2022, enrolments were at 362,000.
Clark notes that many public universities now have “less than salubrious” reputations for quality, with questions about their ability to issue credible qualifications. This perception, coupled with the negative perception of Unisa, further nudges prospective students and their families towards private alternatives. The concern around these “damaged goods” institutions makes the value proposition of reputable private providers all the more compelling.
At the forefront of this revolution, AdvTech (which listed in 1987) and Stadio (listed 2017), alongside a diverse range of other registered private HEIs, are capitalising by offering a spectrum of qualifications, innovative delivery methodologies, and varied price points to cater to different segments of the market.
Former AdvTech CEO Frank Thompson reflects on the early strategies and philosophies of the company that laid the groundwork for today’s landscape. Initially, he says, the company was in dire financial straits. Then the focus became strategic growth, expanding the company without stripping its ability to generate cash. This cautious approach, Thompson notes, sometimes drew criticism from journalists and asset managers for being unduly conservative compared with the rapid expansion of players such as Curro and subsequently, Stadio.
However, this financial prudence fostered long-term stability, a factor that remains a strength for AdvTech. Its diversification into brands such as Vega and Varsity College was guided by continuous evaluation of opportunities, with sharp focus on assessing costs of entry, time to fruition and sustainability of the organisation as a whole. “We needed to make sure we always had the financial resources available to us, so we could weather storms,” says Thompson. “The idea was to invest and grow within the sector, because it seemed to be a vast area of opportunity.”
Today, AdvTech is a mature player with a diversified portfolio, including established brands Varsity College, Rosebank College, Vega and MSA. The group’s latest financial results show a 14% increase in revenue and a 15% increase in operating profit for the tertiary division, and enrolments in this division surpassed 60,000 students. AdvTech also operates within the basic education sector (primary and high schools), with more than 45,000 pupils.
The group’s overall revenue for the 2024 financial year was R8.5bn, an 8% increase from 2023, and its profit increased by 14% to R1.7bn. Now at R30.53, AdvTech’s share price has increased by about 80% over the past three years.
Stadio emerged from Curro Holdings in 2017, expanding from school-based education into the tertiary sector. Founded by Chris van der Merwe, former CEO and founder of Curro, Stadio was established to address the increasing demand for accessible higher education. After acquiring several institutions, including Embury Institute for Higher Education and Prestige Academy, the company consolidated its offerings under a unified brand, focusing on a range of accredited qualifications through contact and distance learning models.
Stadio has shown robust financial growth. At the end of the 2024 financial year, the company reported a 14% increase in revenue from 2023 to R1.6bn. This was driven by an 8% increase in enrolments, bringing the total to just over 50,000 students. Stadio’s share price has increased by 93% over the past three years, outpacing the growth of AdvTech and cementing market sentiment as a high-growth proposition. Notably, Stadio has no external debt (excluding lease liabilities) and declared a dividend of 15.1c a share.
In contrast to AdvTech, Stadio is a pure tertiary player with a younger footprint and has leant heavily into distance learning. About 87% of its students are enrolled in distance programmes, showcasing the company’s emphasis on scalable, technology-driven education.
Traditional universities offer an all-round community experience, with residences for some students, a huge variety of sports options (such as rugby’s Varsity Cup) and myriad clubs and societies. Private colleges are mostly commuter schools without halls of residence, and student life is more muted. However, this might change with time. During Stadio’s latest results presentation, Vorster said that “during this [expansion] period, we’ve focused a lot on student experience, making sure we offer a full typical university experience.” This includes a greater focus on extracurricular activities.
The underlying business model of private tertiary education can be appealing from a financial perspective, due primarily to a predictable proportion of fixed costs — but that can be a two-edged sword.
The business model depends heavily on continued growth in student numbers. This is because much of the cost structure is fixed — such as campus infrastructure, salaries and technology systems — which, as McLachlan notes, are manageable during good times but difficult to adjust when growth slows. While this model allows for operational efficiency during expansion phases, it also means these institutions are more exposed in periods of economic strain, when cutting costs without compromising academic quality becomes particularly challenging.
This operating leverage means that even modest increases in student enrolment can yield larger gains in profitability, provided cost management remains disciplined, which makes this sector “a really nice space”.
However, this model is not without its challenges. McLachlan identifies affordability as the “current burning risk”. While a segment of the population can afford private education, not many learners have the means to pay tuition fees. “One has to balance volume growth with your capacity, and balance that with how much you charge,” he says.
Private institutions generally charge higher fees than most public universities. At public universities such as UCT, Stellenbosch and Wits, a first-year BCom or BA degree will cost between R55,000 and R75,000 for 2025, depending on the institution and area of specialisation.
At the bottom end of the price spectrum, Unisa remains the cheapest route, with a year’s tuition ranging from R10,000 to R45,000 depending on module choices. By contrast, private institutions span a far wider price band. Varsity College, the flagship of AdvTech’s higher education division, charges upwards of R100,000 a year for a full-time BCom.
Stadio’s contact learning is somewhat cheaper, averaging about R65,000 a year, while its distance programmes come in at about R22,000-R30,000. Mid-market players such as Mancosa and Milpark range between R25,000 and R70,000, depending on format, while niche colleges like Afda command up to R120,000 for their creative and business degrees.
AdvTech uses a tiered brand strategy to address different affordability levels. It highlights its efforts to maintain affordability by “taking price increases at or below inflation” for its premium Varsity College brand, while offering more affordable solutions through Rosebank College, which “significantly undercuts most public institutions”. A full-time BCom costs about R40,000 for contact learning, or R35,000 for distance learning. Higher certificates range from about R24,000 to R28,000.
Stadio intends to launch a secondary brand targeting the more affordable tertiary segment at a 30%-35% discount to its average rates. Stadio also has most of its students enrolled in distance-learning programmes, where it is easier to reduce costs and expansion does not depend on physical campus capacity.
Thompson emphasises the “rise of technology-driven education” as one of the most profound changes in the sector over the past 25 years. The pandemic served as an accelerant for the adoption of online learning. Thompson recounts how “in a matter of weeks” AdvTech had to transition every single piece of teaching and learning to online platforms. While there was a significant negative financial effect, the company emerged stronger, with online and hybrid models now coexisting and creating a “very powerful and flexible methodology”. AdvTech’s latest results show a 40% year-on-year increase in online student numbers.
At the same time, the academic legitimacy of private institutions has grown significantly. According to AdvTech, its internal tracking shows sector-leading levels of postgraduate employment. This focus on work-integrated learning and industry-aligned curricula has made private providers more agile in adjusting to shifting skills demand, something the public system has often struggled to do. In a country where unemployment remains stubbornly high, particularly among youth, the ultimate test of a tertiary institution’s value lies in its ability to produce employable graduates.
AdvTech boasts an impressive portfolio of 240 qualifications, all accredited for contact and online learners alike. This dual accreditation represents a considerable advantage for AdvTech, as it negates the “tedious and time-consuming, expensive and laborious process of getting re-accreditation” for different modes of delivery, a process that can take up to two years, according to Clark.
Stadio, being a fairly new entity, has 96 accredited courses. However, Clark says these courses are focused on areas where there is strong demand from parents and good employment prospects for graduates. These include IT, education, commerce, law and accounting. Clark considers these to be “fit for purpose” courses that equip students with skills to secure employment. Stadio has another 34 courses in the pipeline to be accredited, indicating a strong trajectory for growth in its academic offerings.
These qualifications carry official status. The Council on Higher Education accredits degree and diploma programmes (public or private), and each qualification is placed on the National Qualifications Framework (NQF). In practice, this means a private “bachelor of commerce” is officially an NQF level 7 degree, just like a public university’s BCom.
However, due to legal restrictions, no private provider may call itself a “university” yet. Titles and levels are standardised though: a bachelor’s degree is level 7, honours and postgraduate diplomas are level 8, and so on, whether from UCT or a smaller college.
Both AdvTech and Stadio have called on the government to finalise the process for granting full university status to qualifying private institutions. AdvTech noted that “we would like to see private students put on an equal footing with their peers who obtain identically accredited qualifications at public institutions”.
In an effort to revisit this distinction, the DHET released a draft policy for the recognition of South African higher education institutional types in September 2022, outlining criteria for recognition. A revised version followed in April 2024. However, despite private providers working to meet the stated requirements, there is little clarity on whether the delay in implementation reflects an active reluctance by government to extend university status to private institutions, or simply bureaucratic inertia.
An area where private higher education is notably sparse is technical and apprenticeship training. South Africa faces an acute artisan skills shortage. The government says South Africa needs many more electricians, mechanics and tradespeople, yet private universities mostly offer business, IT and creative degrees. Trade skill training remains largely in the public TVET and college system, or via employer apprenticeships. To date, few private institutions have ventured into heavy vocational apprenticeships, leaving that skills gap largely unaddressed by the private sector.
What the private sector has shown is a capacity to innovate within constraints. The growth of micro-credentials, short learning programmes and modular qualifications is increasingly shaping how education is consumed, particularly among working adults seeking upskilling or career pivots. Stadio has launched multiple micro-learning and continuing education products via its Stadio 360 platform, while AdvTech continues to invest in expanding career-aligned short course offerings.
For AdvTech and Stadio, growth isn’t limited to South Africa. As the domestic market approaches a level of maturity, international expansion is becoming a strategic priority. AdvTech has taken early steps into the rest of Africa, with operations and partnerships in Botswana and Kenya. The group sees a compelling opportunity in serving fast-growing urban centres where demand for quality tertiary education is high but supply remains limited.
As South Africans, we should be rooting for all these companies, because they are solving the problems the public sector cannot
— Keith McLachlan
Stadio has so far focused on consolidating its South African footprint but has indicated that regional expansion is on the radar. Its highly scalable distance-learning infrastructure positions it well for cross-border growth, especially in Southern African markets where regulatory frameworks for private providers are gradually improving. Stadio has two distance-learning support offices in Namibia.
According to Clark, competition between AdvTech and Stadio is hardly a concern at this stage. “The market is so big,” he says. “There’s enough cake for everybody.” Last year, both stocks were on his radar, with Stadio as his top pick and AdvTech a close second. His view hasn’t changed in 2025.
McLachlan says the success of these institutions goes beyond financial metrics. “As South Africans, we should be rooting for all these [private education] companies, because they are solving the problems the public sector cannot.” The rise of AdvTech and Stadio is more than just a market story — it’s a social one. “The fact that they’re doing so well,” McLachlan adds, “is a symptom of the country becoming more educated. And that’s a wonderful thing.”
The future of South Africa’s higher education ecosystem will depend not only on student demand but also on the system’s ability to supply relevant, flexible and affordable learning pathways. With billions of rand in investment, tens of thousands of graduates, and an expanding presence across the continent, the educated edge may increasingly belong to those who can deliver learning at scale, with rigour, relevance and reach.
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