Recent protests across several universities in South Africa suggest that the impact of inequality on human capital formation may have become profound enough to affect social cohesion in the country. In a country like South Africa and in an era where education is an important driver of social mobility, inequality perpetuates itself through human capital formation. As one goes up the education ladder, differences in income will be as much about the type of training acquired as about the number of years spent in school. Hence, understanding inequality, especially in the middle part of the income distribution, requires having a good grasp of factors influencing the allocation of heterogeneous human capital. The impact of the allocation of specialized training is likely to be pronounced in countries such as South Africa where it has more power to shape the composition of elites and the nature of the middleclass.