This article considers the potential role of private institutions in the development of Russian higher education. After decades of a government centralised higher education system, there is a clear trend towards the privatisation of education institutions and the diversification of education practices. Some commentators consider this to indicate that the Russian State is losing control of education; others welcome private initiatives, both in formal and informal education. Russian higher education has also been greatly challenged by the current demographic gap: the total number of secondary school graduates expected in 2012 is half that of 2006. This strengthens the competition for the enrolment of students in private and public (federal and municipal) institutions. Based on recent interviews with senior management at a number of provincial private universities, this article suggests possible avenues for private universities to extend into the education market and considers the implications.