The Growth Trap in Vietnam’s Private Higher Education: When Surface Success Conceals Internal Crisis
Policy commentary and analysis on higher education
1. Impressive Numbers and the Questions Behind Them
Looking at the overall picture, Vietnam’s higher education sector appears to be making promising progress. As of the 2023–2024 academic year, the country had 243 universities with a total enrollment of 2,355,711 students, an increase of 319,022 students compared to the previous year. In 2025, nearly 850,000 applicants registered for university admissions — an increase of 116,000 compared to 2024 — with a total of 7.6 million applications submitted, averaging nearly nine preferences per applicant. In the QS World University Rankings 2026, Vietnam had as many as 10 institutions recognized, an increase of four universities compared to 2025.
Yet behind those numbers are worrying signals that are not always openly acknowledged. Among the 773,167 students admitted in the first round of university admissions in 2025, as many as 147,690 students — accounting for 19.1% — declined enrollment despite being accepted. This means that nearly one in five university seats remained vacant, not because of a lack of applicants, but because admitted students chose not to enroll. For private universities, the situation is even more concerning: while public universities account for 76% of the total student population, the private sector, consisting of 67 universities, attracts only 22.76% of total enrollment and 26.8% of newly admitted students. Enrollment numbers are growing, but the quality of incoming students remains inconsistent — a warning sign of deeper instability.
2. The “Middle-Growth Trap” in Private Higher Education
The concept of the “middle-income trap” is traditionally used to describe countries that have moved beyond the easy growth stage driven by cheap labor and technology imitation, but fail to progress further because they lack fundamental innovation capabilities. Applied to higher education, the “middle-growth trap” of Vietnam’s private universities can be described as follows: in the early stage, institutions grow rapidly by exploiting market demand, aggressively opening new programs, and expanding enrollment; but when they reach the stage that requires investment in the “core” — academic quality, scientific research, and organizational culture — many institutions become confused, reactive, and stagnant.
This is not merely speculation but a trend observable through data. The VNUR 2026 rankings recorded position changes for 93 out of the top 100 universities; 47 institutions dropped in ranking, while 14 universities fell out of the top 100 entirely despite previously being ranked between 28th and 98th only a year earlier. Among Vietnam’s top 10 universities in 2026, nine are public institutions; the only private university represented is Duy Tan University. Experts speaking at education conferences in 2025 were even more direct: annual admissions exceeding 550,000 students across more than 200 universities were considered “unreasonable,” especially when many institutions lacked sufficient quality assurance capacity.
3. Dissecting the Internal Contradictions
3.1. The Conglomerate Model — A Double-Edged Sword
Many private universities in Vietnam today are subsidiaries or affiliated entities of diversified business conglomerates, particularly groups with strong interests in real estate. This model provides abundant initial capital and allows rapid expansion, but the excessive dependence between the university’s fate and that of the parent conglomerate represents a serious structural weakness.
When the leadership of FLC Group was prosecuted in 2022, the FLC University project almost collapsed along with it. The development plans of Nova Education Group became “highly uncertain” when Nova Group’s real estate projects stalled. Senior executives from parent corporations often occupy the majority of seats on university councils; conglomerate leaders frequently serve as chairpersons of the university council, making final decisions on personnel and finance regardless of whether they possess expertise in education. This is the “Achilles’ heel” of Vietnam’s private university model: academic independence and strategic autonomy are effectively mortgaged to the economic interests of shareholders.
At the same time, the Ministry of Finance has proposed special monitoring mechanisms for universities converting into non-profit private institutions due to concerns over “policy profiteering” — taking advantage of tax and land incentives while still operating primarily for shareholder profit. This reflects the reality that the boundary between educational mission and commercial objectives has never been truly clarified in many private universities.
3.2. The Crisis of Academic Human Resources
In 2025, Vietnam had nearly 94,000 university lecturers, of whom 26,528 held doctoral degrees — an increase of more than 25% compared to 2022. However, the proportion of PhD-qualified faculty remains low relative to regulatory requirements: universities offering doctoral programs are required to maintain at least 40% doctoral faculty and reach 50% after 2030. In practice, there remains a “clear gap in training quality, research capability, and internationalization among different groups of institutions,” especially as many smaller universities, regional institutions, and private universities struggle to attract and retain highly qualified faculty.
More importantly, an increase in the number of PhDs does not necessarily translate into improved research quality. Nearly 70% of university graduates in Vietnam are currently considered not job-ready — a “double failure” in which students lose time, society wastes resources, and businesses must spend additional costs retraining employees. A survey by Talentnet found that management practices among Vietnamese enterprises remain at a relatively low average level, while fewer than 10% of businesses have structured employee training programs. This creates a vicious cycle: universities fail to train effectively, businesses must retrain graduates, yet neither side has a strong collaborative ecosystem.
3.3. The Silent Crisis of Direction
Perhaps the most profound analysis of this situation comes from voices within academia itself. Dr. Vo Tat Thang (HAPRI) argues that Vietnam’s higher education system is facing “a crisis not of resources but of direction”: universities continue expanding, curricula are continuously reformed, and reports are filled with performance indicators — yet no one dares to answer the fundamental question: “What is education ultimately for?” In such a context, means become ends: rankings overshadow educational quality, appearances overshadow academic values, and short-term satisfaction becomes more important than the long-term development of learners.
The five signs of internal erosion identified by Dr. Thang include: the weakening relationship with truth; the replacement of depth with convenience; the separation between teaching and research; the distortion of autonomy into revenue pressure; and most importantly, the erosion of academic character, when universities lose the capacity to feel ashamed of falsehood and become willing to accept fabricated achievements. These are not problems that can be solved merely through management techniques, because they belong to the philosophical foundation of the institution itself.
3.4. Accreditation: A Thin Shield
The Ministry of Education and Training issued Circular 20/2026/TT-BGDĐT on university accreditation with a new approach: reducing the framework from 25 standards and 111 criteria to 15 standards and 60 criteria, shifting from “regulatory compliance” toward “continuous quality improvement.” This is a positive direction. However, as Professor Nguyen Quy Thanh observed, “Accreditation only becomes meaningful when placed within the broader governance system of the university and linked to strategic development and continuous improvement” — rather than being treated merely as a “high-quality certification for branding purposes.”
In reality, many universities still use accreditation results primarily as marketing tools for student recruitment rather than as genuine commitments to quality improvement — and this is itself a manifestation of the middle-growth trap in higher education.
4. Why Is It So Difficult for Private Universities to Break Through?
According to organizational life cycle theory, after the stages of startup and growth, every organization eventually faces the challenge of institutionalization: how to become sustainable without becoming bureaucratic; how to scale without losing its original spirit. For Vietnam’s private universities, the current stage of maturity raises questions for which many institutions still have no clear answers.
Research published in Policy Futures in Education regarding the policy mix governing Vietnam’s private higher education sector shows that regulation remains the dominant policy instrument, influencing nearly every aspect of private university operations, from licensing to academic activities. This creates a paradox: private universities must operate according to market logic in order to survive financially, yet they are tightly regulated like public institutions while receiving none of the subsidies granted to public universities. Trapped between two worlds without enjoying the advantages of either — this is a structural cause behind the “strategic confusion” faced by many private universities.
Enrollment pressure pushes many institutions into short-term cycles: lowering admission standards to meet quotas, opening trendy programs (AI, blockchain, healthcare, etc.) without sufficient real capacity, and underinvesting in research because it offers no immediate financial reward. Dr. Thang warns that this represents “the replacement of depth with convenience” — a system that produces “people who are adaptable but not trustworthy.”
5. Escaping the Trap: Fundamental Solutions
There is no easy path forward, but there are foundational principles that private universities must embrace as irreversible strategic decisions if they wish to escape the growth trap.
5.1. Building Institutional Identity Around Core Values
World-class universities — Cambridge, Harvard, Waseda — do not compete based on scale or trendy academic programs. They compete through identity: clarity about why the university exists and what kind of human beings it seeks to cultivate. For Vietnam’s private universities, this is a foundational step that cannot be skipped. Each institution must define and commit to a distinctive educational positioning — not as a marketing slogan, but as an institutional commitment reflected in faculty recruitment, curriculum design, assessment systems, and organizational governance.[15]
5.2. Separating University Governance from Parent Conglomerates
Research by Tia Sang and many scholars has clearly shown that excessive dependence on conglomerates is the “Achilles’ heel” of Vietnam’s private universities. The fundamental solution is not necessarily to sever financial ties entirely, but to establish clear governance firewalls between shareholder interests and academic autonomy.
University councils should consist primarily of independent members rather than representatives of parent corporations. Presidents and rectors should possess full authority over academic personnel and curriculum matters. Independent auditing mechanisms should be established and publicly disclosed on a regular basis. Resolution 71-NQ/TW (2025) provides a legal foundation for such reforms — the challenge lies in the willingness to implement them.
5.3. Investing in the Academic Core: Research, Teaching, and Faculty Development
The lagging performance of private universities in scientific research is a direct consequence of insufficient long-term investment. While public universities such as Hanoi University of Science and Technology and Vietnam National University maintain doctoral faculty ratios of 70–86%, many private universities barely meet the 20% regulatory threshold.
Investing in research faculty does not generate short-term financial ROI — but this is precisely what distinguishes a research university from a vocational training center. Private universities need to build policies that attract and retain PhD faculty through strong research environments, not merely through salaries. UNESCO’s warning remains highly relevant: when teaching and research become disconnected, the spirit of the university begins to collapse.
5.4. Transitioning from “Premium Vocational Schools” to “Knowledge-Creation Centers”
The university model is gradually shifting from a provider of educational services into a center of innovation — where research creates new knowledge, startups emerge from laboratories, and businesses seek solutions to real-world problems.
Vietnamese businesses are facing a severe shortage of high-quality talent: digital talent shortages, a lack of visionary leadership, and weak learning cultures — combined with the “double failure” of graduates who are not adequately prepared. This creates an opportunity for private universities if they can reposition themselves: competing not on scale, but on the depth of their connection to real economic needs.
5.5. Reforming Accreditation Systems and Strengthening Genuine Transparency
Circular 20/2026 on higher education accreditation, with its orientation toward “continuous improvement,” offers private universities an opportunity to move beyond the mentality of “meeting standards for promotional purposes” and toward a genuine quality governance cycle.
This requires building internal quality assurance (IQA) systems based on data, linked directly to institutional strategy, and made transparent through publicly disclosed self-assessment reports. This is also the true mechanism for building trust with parents, students, and employers — something no marketing campaign can replace.
6. Looking Ahead: The New Role of Private Universities
Vietnam in 2026 stands at its own crossroads: continue growth driven by labor and exports, or break through via innovation in order to escape the middle-income trap. Universities — especially private universities with their inherent dynamism — must become one of the leading forces driving that breakthrough.[6]
But this can only happen if private universities are courageous enough to abandon what appears successful on the surface in order to build what is truly sustainable at the core. They must move away from the mentality of “build fast, expand fast, recruit massively” and toward the mindset of “build solidly, invest deeply, create real value.”
This is not a choice between growth and quality — it is a choice between short-term survival and sustainable development.
Resolution 71-NQ/TW, with its vision for Vietnam to become one of the world’s top 20 education systems by 2045, is not merely a government target. It is both a challenge and an opportunity that every private university must ask itself whether it truly wishes — and is truly capable — of becoming part of.[20]
The statistical data cited in this article are drawn from the Ministry of Education and Training (2023–2024 academic year), VNUR 2026 Rankings, QS World University Rankings 2026, Policy Futures in Education research (2025), Tia Sang/HAPRI analyses (2026), and official media sources.
By Nguyen Ngoc Tuan
May 2025
