The Abe administration has decided to introduce scholarships for students from low-income families at universities and vocational schools starting in fiscal 2018. Since many students rely on student loans to pay for higher education, the launch of government-sponsored scholarships, which do not need to be paid back, is a meaningful first step. But the scope of the program is too small. The government needs to expand the program so that youths with a strong academic motivation will not have to give up their studies for financial reasons.
Under the fiscal 2017 budget, a ¥7 billion fund will be set up within the Japan Students Services Organization (JASSO) to provide scholarships to students from low-income households that are exempted from paying residential taxes. Beginning in fiscal 2018, about 20,000 students will be eligible for the scholarships. Students at public universities who live with their parents will receive a monthly allowance of ¥20,000; students of such schools living away from their parents and students attending private universities who live with their parents will get ¥30,000 and students at private universities who live away from their parents will receive ¥40,000. Youths from facilities for orphaned, neglected or abused children will also get a lump sum of ¥240,000 for entrance fees. As a preliminary step, the organization will give scholarships to 2,650 students in fiscal 2017.
The government decrees that if students who have received scholarships do not perform well academically, the payment may be halted or the students will be asked to return what they have received.
It is estimated that 60,000 children from low-income households that are exempt from residential taxes enter universities each year. The planned scholarships will cover only about a third of them. In the Upper House election last July, the first Diet race since the minimum voting age was lowered to 18, both the ruling and opposition parties featured institutionalization of scholarships in their campaign promises. The program’s limited scale may come as a disappointment to youths whose hopes rested on those campaign pledges.
High schools across the country will recommend students as prospective recipients of the scholarships by taking into account their academic performance, club and extracurricular activities and motivation to study. The education ministry, JASSO and the high schools need to ensure fairness in the criteria on who gets the recommendations. They should consider that some students are unable to participate in club activities for various reasons — including having to work part-time jobs to help their families get by — which could impact their academic achievements.
The bigger problem is that the size of the scholarships will be too small to cover rises in tuitions and the cost of living. The recipients may have to additionally take out student loans or take part-time jobs, but then they would still be barely able to pay the tuition and support themselves. It’s difficult to say the scholarships will significantly ease the financial conditions of students from poor families. The government plans to eventually increase the yearly total to more than ¥20 billion, but there is no guarantee that the amount will sufficiently cover recipients’ needs.
Many university students face very tough financial conditions. Half of them rely on students loans, most of them extended from JASSO. The organization offers both interest-free and interest-bearing loans. Since the conditions for borrowing interest-free loans are tougher, most students turn to the interest-bearing version.
Students who land full-time jobs after graduation should have a relatively easy time paying off their loans. But a decline in opportunities for regular full-time jobs is forcing many graduates to settle for irregular jobs and then face difficulties repaying their loans. As of the end of fiscal 2014, some 173,000 university graduates were in arrears on their loans from JASSO for three months or longer. The organization registers such delinquent borrowers with personal credit information offices. Blacklisted graduates will find it difficult to take out loans from banks. If they go too far into arrears, JASSO will ask a court to issue an order to repay the debts. It is believed that some students give up going to university in view of these difficulties.
There is widespread criticism that under the current situation, in which half the nation’s university students rely on student loans, the people’s right to receive an equal education correspondent to their ability is not fully guaranteed. Behind this situation is the fact that Japan’s public spending on education is the lowest among OECD member countries, forcing parents to shoulder a large part of the cost of their children’s education — if they can afford it. This shows all the more need for the government to improve its scholarship program.
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