Free higher education offered to low-income families

A new ¥800 billion (US$7.2 billion) package announced by the Japanese government last year will enable students from certain low-income households to be eligible for free education at national universities and reduced tuition costs at private universities, two-year colleges and vocational schools from 2020.

The grants or scholarships as they are called, are intended to reduce the problem of low-income students defaulting on loan repayments. Loans are currently the main way for cash-strapped families to finance college education.

Mieko Ozaki, 27, has been paying back her student loan for the past five years, an uphill struggle, given her low wages.

“I work for a construction company that pays me based on the hours I work,” explained the arts graduate.

It means her student debt of around ¥40,000 per month has become a millstone around her neck, postponing any possibility of marriage and having a family for the next decade at least.

She is one of an increasing number of young people taking up student loans. According to student loan provider, the Japan Students Services Organization or JASSO, which is linked to the education ministry, 51% of students depended on some funding from JASSO and other sources like universities and banks in the past three years, compared to 31% in 2004.

Currently 350,000 students, or 10 times the number compared to 2004, have fallen behind on their loan repayments, of which half are more than three months behind, according to JASSO figures.

Election promise

The government unveiled the new package providing scholarships from 2020 for students from families who cannot afford to pay their residential taxes soon after Prime Minister Shinzo Abe’s election victory in August. During the election campaign he promised a new economic package to subsidise education costs from pre-school to university, improve elderly care and raise productivity by 10% by fiscal 2020 compared to 2016.

According to the Paris-based Organisation for Economic Co-operation and Development or OECD, education costs in Japan average 30% of household expenditure compared to 16% worldwide.

The education ministry says the scholarship package is an extension of an existing programme that provides ¥20,000 to ¥40,000 a month in grants to students from low-income families. According to the ministry, applications shot up to 2,000 in 2017, from just 200 in 2016 when these scholarships started. But the scholarships are not enough to cover the full costs.

Private universities – 80% of Japan’s 776 universities – charge up to ¥1.2 million (US$10,800) annually, nearly double the cost of the tuition fees and entrance fee at national public universities. Entrance fees hover around ¥300,000 or US$2,700.

The new grant scheme now in the pipeline will pave the way for high school students from low-income families to apply to universities selected by the ministry in order to qualify for its scholarship programme. The student’s application will also stipulate the selected fields of study – although the ministry has so far declined to say which fields would qualify. Once the student is accepted by the university, the scholarship will be confirmed.

Ayako Tango, an education ministry official in charge of government scholarships for low-income students, says the details of the new scholarship programme are still being debated by a special panel that includes university professors.

Government economic goals

The government’s scholarship plan is “linked to increasing Japan’s economic production, now stalled by student debt and the rising number of youth who are shelving starting families, contributing to a serious demographic decline”, says Yuki Honda, a professor at the Graduate School of Education, University of Tokyo, and a supporter of the student-led Aequitas campaign against low wages, which began in September 2015.

But Honda believes the scholarship plan will not achieve its intended purpose of equal opportunity as the programme is selective, aimed at particular universities only and restricted to students who have goals to get good jobs and start new ventures, among stipulated conditions now being debated. It sets conditions that cannot be necessarily be met by the target group of disadvantaged students. These include the ability and motivation to start new ventures.

Because of the cost, young people from lower-income families are less likely to receive higher education and will make less money than employed graduates over the course of their lifetimes.

The Nippon Foundation, a non-profit social affairs group, estimates that the Japanese economy loses out on more than ¥40 trillion in terms of productivity and consumer spending by not making it possible for qualified and ambitious young people from low-income families to attend university.

Kan Suzuki, a former vice minister in the ministry of education and now a professor in the public policy department, Keio University, describes the package as a “landmark”.

“The new scholarship will encourage more students to study in regional universities and will stimulate funds flowing to the local economy and lead to quality human resources entering local industries,” he says.

The education ministry’s stated objective is to free the students of debt and support them to start new ventures or use their university education to get jobs in a rapidly changing employment environment. The ministry’s website describes the programme as being important for achieving innovation in higher education and boosting the country’s international competitiveness, as well as supporting fair opportunities and higher research quality.

Downsides

However, there are also misgivings, with experts pointing to priorities set by ministry officials in the selection process, including a clear slant on producing graduates who can be employed in global production, which they believe will be linked to subjects such as industrial technology and management.

Some believe linking fair access policies for disadvantaged students to national economic goals drives universities to serve the government’s economic agenda rather than promoting access for social and educational reasons.

Masayuki Kobayashi, a professor at the Centre for Research and Development of Higher Education, University of Tokyo, says a selection process to be set out in the guidelines by the ministry of education demonstrates the growing influence of the state on higher education. The new scholarship grant is another tool to make universities subservient to government aims, he believes.

In 2004 all national universities were reformed as legal corporations with discretionary rights over their affairs such as budgets. But the government started to decrease subsidies to national universities by 1% each year at the same time and has started increasing grants or contracts to universities that can attain government goals, according to Kobayashi, who adds this is leading to financial difficulties for many universities.