The Surge in Private Higher Education Amid Public Capacity Constraints

South Africa's higher education landscape is undergoing a profound transformation, driven by unprecedented demand from school leavers and working adults seeking qualifications that align with the job market. With public universities at full capacity—unable to accommodate over 300,000 bachelor’s pass matriculants annually—the private sector has emerged as a critical alternative. JSE-listed STADIO Holdings, through its flagship STADIO Higher Education institution, exemplifies this shift, reporting robust growth and positioning itself for full university status under forthcoming Department of Higher Education and Training (DHET) regulations.

In 2025, STADIO Higher Education enrolled 53,303 students, a 7% increase year-on-year, contributing to group revenue of R1.8 billion, up 14%. This expansion reflects broader trends where private institutions now account for approximately 22-30% of total higher education enrolments, up from negligible levels a decade ago. Public universities, numbering 26, hosted around 1.1 million students in 2022, but infrastructure and funding limitations mean they can only offer spaces for about 200,000-235,000 new first-year students in 2026, despite 656,000 matric passes in 2025.

STADIO Higher Education: From Provider to Aspiring University

Established as a registered private higher education institution under the Higher Education Act of 1997, STADIO Higher Education has rapidly scaled since its inception. It operates 10 academic schools spanning commerce, education, IT, law, humanities, fashion, media, architecture, and policing, offering over 96 accredited qualifications from certificates to postgraduate levels via contact, distance, and blended modes. The institution's diverse portfolio caters to 61% Black African and 68% female students, emphasizing inclusivity.

STADIO's strategic focus on operational excellence has yielded impressive results: core headline earnings per share rose 22% to 38.5 cents in 2025, with an EBITDA margin of 30%. Bursary spending surged 41%, easing affordability barriers. Group chair Vincent Maphai highlights the priority: “Our major priority in the short term is to achieve university status for our selected institutions, and we believe that we are well placed to become a university once the regulations allow.”

The Durbanville Campus: A Flagship for Expansion

A cornerstone of STADIO's growth is its R205-R370 million Durbanville campus in Cape Town's northern suburbs, officially opened in October 2025 and set to welcome its first cohort in February 2026. Designed for 4,000-5,000 students, the facility features state-of-the-art classrooms, labs, and collaborative spaces, forming part of a planned tertiary hub. CEO Chris Vorster notes, “The Durbanville campus demonstrates what it means to invest wisely – to create world-class infrastructure that will serve thousands of students.”

This greenfield development underscores STADIO's commitment to geographic expansion, with plans for additional campuses in 2027. Contact-learning students grew 11% to 7,018 by mid-2025, bolstered by such investments.

Government Policy Paves the Way for Private Universities

A pivotal development is the DHET's draft Institutional Types Policy (October 2025), which introduces categories like higher education college, university college, and university applicable to both public and private providers. This ends decades of regulatory disparity, allowing qualified private entities like STADIO and ADvTECH to apply for university status. ADvTECH plans applications for Rosebank International and Emris, while STADIO targets its comprehensive offerings.

The policy responds to public sector bottlenecks: for 2026, universities like the University of Johannesburg received 693,000 applications for 10,500 spots, and UCT over 98,000 for 4,500. Private growth—enrolments nearly tripling since 2010—positions them to absorb the overflow, projected at 500,000+ rejections.

For more on the policy, see the DHET Ministerial Statement on Enrolment Planning.

Photo by Vitaly Gariev on Unsplash

Market Dynamics: Private Sector Filling Critical Gaps

South Africa's higher education market, valued at USD 236 million in 2025, is forecast to grow at 18.71% CAGR to 2034, driven by demographic pressures and skills demands. Private providers offer flexibility—shorter programmes, evening classes, online options—tailored to employed adults and underserved regions. STADIO's distance learning, 68% of enrolments, exemplifies this scalability.

Yet, the South African Qualifications Authority (SAQA) accredits all qualifications equally, ensuring private degrees hold parity with public ones. Industry-aligned curricula in AI, data science, and engineering address employability gaps, with STADIO planning 34 new programmes.

Strategic Initiatives: Embracing AI and Employability

STADIO integrates artificial intelligence (AI)—a tool transforming pedagogy—via a “traffic light” framework: green for permitted use, amber for supervised, red for prohibited. This prepares students for a job market where AI proficiency is essential. Maphai states, “AI is undoubtedly changing the future, and we must embrace these changes.”

Employability remains core: partnerships with industry ensure curricula relevance, with graduates entering high-demand fields like IT and finance. Bursaries and funding initiatives have expanded access, aligning with national goals for 2.5 million additional post-school students by 2030.

Challenges Facing Private Higher Education

Despite momentum, hurdles persist. Affordability looms large, with private fees often higher than subsidized public rates, though STADIO counters via bursaries (up 41%) and NSFAS-like models. Perception issues linger—private qualifications sometimes viewed as inferior—despite SAQA accreditation. Quality assurance demands rigorous CHE audits, and limited NSFAS access (primarily public) restricts low-income intake.

Regulatory delays for university status and infrastructure costs also challenge scaling. However, Vorster emphasizes, “Affordability remains the biggest barrier... we have sought innovative ways to ease the financial burden.”

Stakeholder Perspectives and Broader Impacts

Experts like USAf note private HE's “Cinderella” status, urging integration for mobility and funding equity. Students benefit from smaller classes and career focus; employers value practical skills. STADIO's 61% Black African demographic advances transformation.

Competitors like ADvTECH (R24bn market cap) mirror this trajectory, signaling sector maturity. For insights into Stadio's financials, review their 2025 Summary Financial Results.

Photo by Vitaly Gariev on Unsplash

Future Outlook: A Transformed Landscape

By 2030, STADIO aims for 80,000-100,000 students, leveraging university status, new campuses, and tech. The private sector could absorb 350,000+ students, easing public pressures and boosting GDP via skilled graduates. With AI, blended learning, and policy support, private higher education promises equitable access and innovation.

As Maphai envisions, STADIO's ascent signals a vibrant, inclusive future for South African higher education.