According to the research of MEXT ( the Ministry of Education, Culture, Sports, Science and Technology), the university entrance rate in 2019 was 54.67%. In Japan, more than half of high school graduates go on to universities or colleges. We are in a good ear that almost all the people are given an opportunity to receive higher education if they hope to go to a university or a college. However, going to a private college or university costs students at least about 4 million yen until they graduate. Big tuition burden to students becomes serious bottleneck for students to deicde to go to a higher educational institution.

Currently, it is said that more than 50% of university or college students get a scholarship. Meanwhile, there are a lot of opportunities to hear a topic that so many students become insolvent on a scolarship because they mostly ask JASSO (Japan Student Services Organization ) for the support of not benefit type of scholorship but loan type of scholarship.

The Japanese sholarship system has changed drastically at the time the scholarship management was taken over from Japan Scholarship Foundation to JASSO (Japan Student Services Organization) in 2004. It’s been so long that the scholorship system became financial business, which leads to contradictive situation and vicious circle like students actually want to pay off a scholorship loan but they have no outlook on full repayment even though they take time to do a part-time job by reducing class attendance dates.

One of three students get a loan type scholarship

JASSO (Japan Student Services Organization)’s pillar of business is the loan type scholorship business targeted at students going to higher educational institutions. Interest-free type scholarship loan provided by JASSO requires students to achieve a certain school record. In contrast, standard scholarship loan with interest requires students to only fulfill the condition that household’s annual income belows the standard. So, mostly students choose a loan type scholarship.

In the last thirty years, The population of 18 year-old people reaching 2.05 million in 1992 were at the peak and gradually declined from then on. In 2018, 18 year-old people’s population reduced by half like it was about 1.20 million. In inverse proportion to the decrease of 18 year-old people’s population, the number of students getting a scholarship loan has increased. Though the rate of students getting a scholarship loan in 2014 is one of four, it became one of three in 2015.

The number of lawsuits to students by JASSO tend to increase drastically

The repayment money from the scholarship users accounts for 80 percent of financial resources of JASSO (Japan Student Services Organization) and the rest of the percentage of that is government borrowing.

For that reason, it is very important mission for JASSO to stably collect scholarship loan lent to students.

The amount of scholarship loans that should have been paid off as of the end of 2017 was 7.05 trillion yen. Money in arrears included in the scholarship loans was 85 billion yen. Though money in arrears tends to reduce year by year, the number of people with 3 months overdue payment reaches 157,000 and JASSO can’t establish a contact with some of them.

In this situation, JASSO providea various systems to ease loan conditions like “the repayment reduction system” that reduces monthly repayment and “granting grace period for repayment” that accepts a grace period to some extent until repayment. Nevertheless, there are so many students suffer through repayment of scholarship loan and the number of transfers to suit was 5500 in 2017. Compared to 58 lawsuits related to repayment of scholarship loan in 2004, the number of lawsuits in 2017 is 10 times as much as that in 2004.

According to JASSO,

considering the point of circulative fund management that keeps allocating government borrowing and repayment money to scholarship loans, students must pay off loans. It is the major premise that people facing difficulties in repaying loans should come to consult with JASSO staff to find out the solution together. Unfortunately, some of them are missing and we can’t contact to them. Sometimes, we cannnot help taking legal steps to find the solution.

Originally, a scholarship indicates a benefit without obligation of repayment. However, scholarship provided by JASSO is mostly a loan type scholarship with obligation of repayment.

Admitting that a scholarship loan can be acceptable, I personally think JASSO as a creditor should not make a debtor repay a loan with interest. Actually, Japanese scholarship used to be mainly interest-free scholarship loan before.

However, interest-bearing scholarship loan has dramatically increased because of the government policy and the number of students applying for interest-bearing scholarship loan reversed that of interest-free scholarship loan in 2003. There are overwhelmingly large number of Interest-free scholarship debtors nowadays in Japan.

Some students are up to their necks in debt and fall into personal bankruptcy

If household economy suffers from poverty, it is obvious for anyone to want to go to a good univeristy and work for a good company. In order to do that, there is a person who chooses to go to a university or a college even if taking advantage of a scholarship loan that reaches more than 4 million yen.

However, there is no guarantee that anyone can get a decent job but some of graduates are forced to work for a company that habitually flouts labor regulations or do a part-time job in a temporary position. There is a lot of cases that a scholarship loan debtor face the difficulty in repaying the loan becuase monthly salary is not enough for required monthly repayment amount, he/she loses his/her health due to crazy hard work.

The current situation of Japanese scholarship system

The scholarship program privided by JASSO (Japan Student Services Organization) is almost student loan even though it partially provide benefit type scholarship program. Japan is pretty much behind in this filed compared to other advanced countries.

Actually, there are the system of reduction of or exemption from tuition fees and benefit type scholarship system managed by the government to support students’ tuition fees and admission fees. National and public universities support students through both systems at annually 40 billion yen but it is not well-known among people. In regard to private universities, tuition supports from the government is about 1.3 billion yen and its amount is less than half of that of National and public universities. Thinking that the number of private universities and colleges is 80 percent of all the higher educational institutions in Japan, you can understand how small support it is.

Students can’t get to know whether they can receive scholarship benefit in advance before going on to universities or colleges because of screening. If they are not chosen through the screening by JASSO, they can’t even count on these systems. There is an example that a student only got half of receivable standard scholarship benefit amount.
I have to say the system construction is too poor to support students.

Some of the systems or programs provided by JASSO are not known among students who actually need it

JASSO started “Income linked repayment type scholarship loan program” in 2017, which is new scholarship program of JASSO that purposes that a student, who faces poverty and receives interest-free type scholarship loan, can study at ease without worries of future repayment of loans by granting a grace period of repayment term until a student can get a certain income after graduation. However, unfortunately, little is known about this program.

It is very good program to reduce financial burden of students but similar new loan systems are released one after another so that high school teachers who originally need to explain don’t understand the outline of the new released systems. 4 of 3 high school teachers in charge of scholarship answer the outline of scholarship systems provided by JASSO is quite difficult to understand.

“Information gap” is really significant problem nowadays between people with information and people without information in terms of scholarship understanding and there is also a problem that the information that should originally reach the people who need to know doesn’t acutally reach to these people.

For instance, there are study support funds for Japanese high schools. However, it is said that about 20 thousands students don’t receive the benefits nation-widely because of knowing nothing about it and not applying for it

Countries that successfully provides free education

Speaking of the country introducing free education, that is Norway, Finland, Iceland, Germany, Austria and france.
For example, Sweden provides completely free education to people and actually, the Swedish government once used to take care of student’s living costs. France and Germany also provides free education to people and student can making a living without relying on loans.

Japan’s point of view on education is quite similar to that of Korea. Japan and korean has strong teandency that parents need to take care of and take responsible for child’s education and it is quite difficult to drum up support to covering tuition with governmental financial resorces. When the government annouce a policy of free education of high schools, colleges and universities, people’s agreement rate only reaches about 30 percent.

Japan is only the country that uses a word of “scholarship loan”

Japanese scholarship system is, so to speak, student loan. The system of reduction of or exemption from tuition fees, interest-free scholarship loan, and setting a grace period are all preferential treatments on the premise that JASSO lends money to students. Nevertheless, a word of scholarship is used for granted by JASSO. Substantially, a scholarship and a loan is completely different and a coined word like “scholarship loan” is totally inconsistent. Those who read this article may already understand that in Japan, a scholarship mostly indicates “a student loan”.

JASSO imposes overdue interest to loan debtors who fall behind on loan repayments

Originally, overdue interest used to be 10 percent of the borrowing amount. Currently overdue interest rate is 5 percent. However, thinking about interest rate nowadays, this overdue rate is still too expensive. Arrears are basically imposed to mothly repayment. If not paying overdue interest, it will snowball. Unless setting un upper limit of overdue interest, it is obvious that people who can’t pay off come out one after another. JASSO need to think about the solution for this matter.

Japanese free education system

In Japan, benefit type scholarship system was organized in 2017 but its scale was as small as 22 billion yen. The amount of benefits paid to students were from 20 thausands yen to 4 thausands yen per month. This time, the government expanded budget for educational benefits and the amount of benefits paid to students for the first year are now 1 million yen. Of course, there are a lot of conditions to fulfill to apply for this much benefits but the government positive attitude towards improvement of scholarship system is appraisable.

On the other hands, problems are piling up one after another. First thing first, income classification of household budget to decide the amount of scholarship has just 3 stages and it is really rough because whether a scholarship is paid or not is decided by just one yen difference between household income and income standard set on 3 stages stepwisely.

Moreoever, if a student continuously gets a mark ranked at 25 percent of the lower layer group at a university, JASSO will discontinue loan contract. There is a possibility that a student doing part-time job very hard to somehow make a living will gets a mark ranked at 25 percent of the lower layer group no matter how hard he/she makes effort to keep up with the classes.

Is this the scholarship system that reflects on the actual conditions of students who apply for a scholarship?

What is the most important point of view when we think about the scholarship system?

The major premis of offering a scholarship is having a viewpoint on supportng and taking seriously care of young people who cannot help giving up going to a higher edicational institution because of the financial situation. Equal opportunity of educaiton is very important principle which is written on both Basic Education Law and the constitution of Japan. If economically handicapped household loses opportunity to let a child to go to a high educational institution because of financial reasons, it cannot be said that Japan maintains equal and fair competitive educational environment.

Moreover, the situation where young people with good motivation and good scholar can’t go to higher educational institutions has negative effect on not only individual educational opportunities but also the whole society of Japan. JASSO may need to have a viewpoint of removing this kind of opportunity loss.

The management free education policy should fix every important points flexibly depending on the situation. Educational expenses are easily influenced by external factors like financial situation and household environment. The government as law enforcement understand what’s happening in actual education field before making a policy or a measure based on politician’s speculations.

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