Thoughts on the completion of the repayment

I apologize for starting with a personal matter, but last fall I received the certification of the completion of repayment from the Japan Student Services Organization (JASSO). Including the repayment moratorium period, it was the 24th year since I left graduate school. I was not employed in a full-time position for a long time after leaving graduate school, but fortunately I obtained a position at Chuo University and was safely able to complete the repayment. But supposing that even now I had not been able to find a full-time position and had to struggle to earn a living as a part-time teacher, I might not have been able to complete the repayment without any problems.

Lecture meeting on the scholarship problem

I felt this probably because we held a lecture meeting last fall in Chuo University inviting the lawyer Yoshiharu Iwashige, who is the Secretariat of the Nation Conference on the Scholarship Problem. In the lecture, a number of specific examples were given of people who are suffering due to the burden of having to repay their scholarships, and the problems in Japan’s scholarship system were explained in an easy-to-understand manner. Scholarships from JASSO (formerly, the Japan Scholarship Foundation) constitute the large majority of scholarships in Japan, but compared to the past, the collection of repayments has been made tougher and we are seeing cases of forcible collection that do not take into consideration individual circumstances.

Many of the people who are having problems repaying their scholarships earnestly want to repay them. When people who are doing their absolute best even if their lives are not going the way they expected due to various reasons, such as illness or unemployment, have no option but to try to use the procedure to postpone repayments, they may fall into a situation where they cannot use the postponement system because their late repayments have already increased to too large an amount. Also, even if they are able to repay it on time, in a situation in which they are finally able to repay it from within the small income they are earning, there are quite a few cases where economically they are not able to think about getting married or having and bringing up children.

Changes to the environment surrounding students and scholarships

As you know, many scholarships in Japan are not of the type that are given without a repayment obligation, but rather are basically loans. In Japan, scholarship is generally understood as something that students “borrow,” but not many people recognize that this understanding is unique to Japan and that internationally scholarships are not understood in this way. Additionally, the cost of studying is rising too. There are probably parents of today’s students or older generations who say that if they do not have the economic ability to pay the course fees for a private university, the children can just go to a national or public university. However, while the course fees when I entered a national university in 1979 were 144,000 yen, today this figure is 535,800 yen. While this is still inexpensive compared to a private university, it is a dramatic increase. On the other hand, according to the “Survey of Household Expenditure on Education for First-year Students of Private Universities” (Tokyo Federation of Private University Faculty and Staff Unions), parents’ incomes are decreasing and the annual income of parents of new students has decreased by 1.7 million yen compared to its peak in 1993.

If there was a clear path to finding employment even without going to university, then it might be better to advise students not to unnecessarily continue on to university. However, as this is not the case at the present time, students are aiming to continue on to university even it is very difficult to do so, and their parents also want somehow for their children to go to university. But even if they graduate from university, today it is not easy for them to find stable employment. The scholarship is repaid over 15 years, but is it possible to say with confidence how many of this year’s university graduates will still be working in 15 years time at the same place that will employ them this spring? In an age when economic growth was taken for granted, once they graduated from university many people were able to find stable employment. So it is likely that even if they had a scholarship, they did not have to worry too much about having difficulties in repaying it. But today, when unstable employment is increasing, this is no longer the case.

A new problem for scholarship repayments

The homepage of JASSO includes a “repayment simulation” page. In the current situation, if we consider a scholarship to be a “loan,” then it seems necessary to think seriously about “repayment” when “borrowing” it. If I look back on my own situation, I remember that when I applied for the scholarship I did not think that seriously about how I would repay it. I imagine that students today are a little stricter when it comes to money, but it is difficult for them to imagine continuously repaying tens of thousands of yen or thousands of yen each month. The simulation on the JASSO website is likely to offer students a clue about how much they will have to repay in the future, even it is impossible for them to simulate how much can be repaid according to their future income. But if this simulation ends up discouraging those people who originally would have naturally considered applying for a scholarship from applying for one, then this runs counter to its original purpose. It should not result in students deciding not to apply for a scholarship as they are worried about repaying it or in them working too hard in a part time job to the extent that they cannot concentrate on their studies.

In recent years, JASSO has appealed to each school to strengthen its guidance to students on repayments. Further, I have heard of a movement toward publically announcing the late payment situations of the graduates of each school. It is not clear how this would be reflected in the actual operations of the scholarship system, but if a situation should arise in which the fact that there are many graduates behind in their payments affects the provision of scholarships to current students, this might become an unreasonable measure that forces people who are not responsible for the problem to assume responsibility for it. In this way, the scholarship system, which is intended to be a system of financial aid, is likely to have the opposite effect in that it turns away the very people who most need financial aid.

Sweeping reforms of Japan’s scholarship system!

Based upon the various problems previously described, it is certainly the case that JASSO has been improving its scholarship system. It has reduced the interest on late repayments from 10% to 5%, and the repayment moratorium period has been extended from five to 10 years. It has introduced a system of income-synchronized no-interest scholarships for some students. Moreover, it has increased the number of students to whom it loans interest-free scholarships. Even so, a fundamental solution to the problem is still likely a long way in the future. The tuition fee halving policy of South Korea might also be of reference, but I sincerely hope that first of all, Japan seriously investigates establishing a benefit-type scholarship system.

Takeshi Hamaoka
Professor, Faculty of Economics, Chuo University
Area of Specialization: Greek philosophy

Takeshi Hamaoka was born in Hyogo Prefecture in 1960. He graduated from the Faculty of Letters, Kyoto University, in 1983. He completed the master’s course of the Graduate School of Letters, Kyoto University, in 1986. He withdrew from the doctoral program of the Graduate School of Letters, Kyoto University in 1990, after completing the required course work. After working as Assistant Professor in the Faculty of Economics, Chuo University, he was appointed to his current position in 2004.
His specialty is Greek philosophy, especially Aristotle. Currently, he is preparing to translate History of Animals (co-translator), and On the Parts of Animals for New Edition of the Complete Works of Aristotle [Shimban Arisutoteresu Zenshu] (Iwanami Shoten). His main publications include “Aidos (Shame) in Aristotle’s Ethics” (The Annual of the Institute of Economic Research, Chuo University, 2013) and On the Banks of the Ilisos [Irisosu no Hotori], (coauthor, Sekaishisosha, 2005), in For Students of Environmental Thought [Kankyo Shiso o Manabu Hito no Tameni] (collaboration, Sekaishisosha, 1994).