In many countries, the modern state education system is unable to satisfy the growing demand for education, in particular under conditions of budget deficit. Private schools both help to satisfy this demand and enhance the overall standards of quality and teaching efficiency. Unlike state-run schools, which are unable to provide quality basic education for all, private schools are financially efficient, rapidly react to emerging problems, and are highly transparent. The article gives a characterization of the private education sector and considers its interactions with the state education system. The author discusses the means by which the state may regulate private education and the principal types of partnership between the state and private entities in education. The review mostly deals with pre-university education.