Reference | FYI


State-backed scholarship program to open doors to university

by Mizuho Aoki

Staff Writer

The government will soon launch the first state-backed scholarships in an effort to make universities more accessible as more students face financial difficulties to pursue higher education.

The move is considered a big step forward in a country where the government has to date only offered student loans.

But, still, the size of the program is too small to help every student in desperate need of financial support.

Prime Minister Shinzo Abe’s administration submitted a bill relating to the new scholarship program to the Diet last week. To be launched in April, the initiative is expected to be fully implemented the following year.

Here are questions and answers about the new program:

Who is eligible to receive the scholarship?

The program is for students from low-income households such as those on welfare or exempt from paying residential tax.

Government-backed lender Japan Student Services Organization (JASSO) will provide the monthly stipends, ranging from ¥20,000 to ¥40,000 depending on the type of university students attend and their housing situation. For example, a private university student who lives away from home is expected to receive ¥40,000 a month, according to the education ministry. The support would be less for a student who attends a national university, where tuition is cheaper, and commutes from home.

The program is also expected to provide an additional ¥240,000 to cover enrollment fees for students from child welfare institutions.

In fiscal 2017, JASSO plans to provide the scholarship to some 2,800 students considered to be in urgent need of financial help, such as those from child welfare institutions and private university students who live away from their families.

The program is expected to expand from fiscal 2018 to support 20,000 impoverished students in total.

The education ministry estimates it will cost about ¥1.5 billion in fiscal 2017, to be expanded to ¥22 billion in fiscal 2021.

How many students are from low-income households? Will the monthly amount suffice?

The education ministry estimates around 61,000 people need financial support to go to university.

That means two-thirds of impoverished youths who wish to pursue university-level education cannot receive the scholarship.

The monthly stipend is also too small to even cover annual tuition fees at a national university, leaving many students with no option but to take out a student loan to cover the shortfall, experts say.

Hirokazu Ouchi, a pedagogy professor at Chukyo University in Nagoya, praised the program as a huge step forward, but added it should be expanded in the future.

“Considering that Japan currently only has a student loan program, the scholarship carries great significance,” Ouchi said. “But the number of students who can receive it is extremely small and the amount is also insufficient.”

How will the recipients be selected?

High schools will recommend students who deserve state support.

Based on the number of students from low-income households, each school will be allotted at least one recommendation. The high schools will select students who have achieved top grades or those with excellent records of extracurricular activities.

But as impoverished students tend to have lower grades and no spare time to participate in extracurricular activities as they are often busy with part-time jobs, experts say students in dire need of a scholarship to pursue higher education may miss out.

Are other scholarships available?

Yes. Local governments, businesses as well as universities also offer scholarship programs.

For example, Mitsubishi UFJ Trust and Banking Corp. offers a university scholarship of ¥35,000 a month. Waseda University in Tokyo also has several scholarship programs, including a tuition-free scholarship.

National universities also have programs where top students with financial difficulties are exempted from paying tuition. The education ministry has allocated ¥33 billion for the program in fiscal 2017, which starts April 1.

However, unlike scholarships, students are screened twice a year based on their grades and other reasons.

What is currently on offer from the government?

JASSO offers two types of student loans: one without interest and one that carries an interest rate of up to 3 percent.

In fiscal 2015, 1 in every 2.6 university students received a student loan, compared to 1 in every 4.3 in fiscal 2004, when JASSO was launched, according to its data.

Among roughly 1.3 million borrowers in fiscal 2015, 837,000 students, or 63 percent, received loans that carry interest.

However, as of Mach 31, 2015, there were 165,000 borrowers who had defaulted on their repayments for more than three months, according to JASSO.

The organization filed 5,432 lawsuits in fiscal 2015 against debtors.

Why has the number of students seeking student loans increased?

The increase is due to the nation’s sluggish economy, which has more parents struggling to fully finance their children’s university education, as well as soaring tuition fees, observers say.

According to the education ministry, average annual tuition fees for a private university increased to ¥864,384 in fiscal 2014 from ¥570,584 in fiscal 1989. As for national universities, the annual average cost was ¥535,800 in fiscal 2014 compared with ¥339,600 in 1989. Together with enrollment fees that freshmen must pay when they enter universities, students need to pay ¥1.13 million in the first year for private institutions and ¥817,800 for national ones.

Given the figures, the monthly aid under the new scholarship program is way too insufficient, Ouchi of Chukyo University said.

The welfare ministry’s statistics, meanwhile, showed Japan’s relative poverty rate among children increased to 16.3 percent in 2012 from 10.9 in 1985. The relative poverty rate among children refers to the percentage of 17-year-olds or younger whose household income falls below the poverty line, defined by half the median household income of the total population.

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