> Nearly half of university students now use scholarships. Most are loan-type scholarships that must be repaid, but many working adults are suffering from unstable incomes due to the economic downturn and collections by the Japan Student Services Organization (JASSO). Prime Minister Fumio Kishida has ordered the consideration of a “career-payment type,” but the substance of the program is yet to be determined. Some experts say that the problem is the structure of the system, which assumes that students will continue to repay their loans. From the standpoint of measures against the declining birthrate, an urgent review may be necessary, including the expansion of the benefit type. (Haruka Osugi, Special Reporting Department)
>
> **◆Payments until age 40: “I can’t think of getting married.”**
>
> ”I used to have a concrete plan for my life, but now I can’t even think about getting married and having children because I have to pay until I am around 40 years old.”
>
> POSSE, a Tokyo-based nonprofit organization that addresses issues of poverty among young people, conducted an online survey on scholarships in mid-July.
>
> The burden of repayment may affect the future of the next generation. One respondent said, “My older son is now in high school, and I’m worried that I won’t be able to send him to the school I want him to go to because of my scholarship payments.”
>
> Some students pointed out that they were afraid of the business-like collection of the scholarship.
>
> Some POSSE members also have young people who are struggling to repay their loans. For example, a 25-year-old woman who borrowed a total of 4 million yen from JASSO to go to a private university and obtain a teaching license. She plans to repay the 17,000 yen per month over 20 years, and says, “I’m in trouble, I want to pay it back as soon as possible.”
>
> After graduation, she found a job at a private high school, but the work environment was so bad that she was forced to leave after only one year due to health problems. He then worked as a receptionist for a company as a contract employee, but this was terminated at the end of June because of the Corona disaster, which increased the number of telecommuting jobs.
>
> He has applied for a reduction in the amount of his repayment, but it is not expected to be reduced until September. “The scholarship is tough, and working is tough, too,” he said. Since I became a working adult, I realized that everything in life is hard. I have four siblings, and we owe a total of more than 10 million yen. We are under a lot of pressure to repay the loan,” he said.
>
> **◆College enrollment rates are rising, tuition fees are soaring…but parents’ wages are not rising.**
>
> It’s an “impossible game,” as Hiroto Watanabe, 34, executive director of POSSE, describes the situation for borrowers.
>
> Although they manage to repay their loans, young people’s employment is becoming unstable, and they also face unexpected expenses such as caring for a family member or being hospitalized. The burden of child-rearing and educational expenses is also heavy and limited. The company plans to compile the results of the survey and ask JASSO and other organizations to cancel the debt and improve the system.
>
> According to OIST’s “Survey of Student Life” (FY2020), the percentage of scholarship recipients is 49.6% for daytime college students; until the mid-1990s, it was around 20%, but it has doubled in the past 30 years.
>
> Why has there been such an increase? First of all, the percentage of students going on to university is increasing. Last year, the percentage was approximately 60%, including junior colleges, an increase of more than 20 percentage points in 30 years. The number of universities was 803 last year (77% of which were private), a 35% increase in 30 years. Although the number of students going on to college has increased, the cost of tuition has skyrocketed. The average total of annual tuition and enrollment fees (FY16) was approximately 820,000 yen for national universities and 1,130,000 yen for private ones, doubling for national universities and 1.5 times for private ones over the past 30 years. Nevertheless, parents’ wages have not increased. A situation has emerged in which students cannot go to college without relying on scholarships.
>
> The majority of the scholarship business in Japan is handled by JASSO, with the total balance of scholarship loans amounting to approximately 9.6 trillion yen.
>
> Last fiscal year, approximately 1.16 million students received scholarship loans from JASSO; 320,000 students used the benefit-type scholarships introduced in fiscal 2008 due to income restrictions, making the loan type by far the most common type of scholarship.
>
> **◆Review of inadequate public support**
>
> There are interest-free and interest-bearing scholarships offered by JASSO. The line is drawn according to household income and other factors, and about 60% of them are interest-bearing. To borrow a scholarship, students must have a co-signer (a parent) and a guarantor (a relative within the fourth degree of kinship), or pay a guarantee fee and use a guarantee agency.
>
> With the number of non-regular employees doubling in the past 30 years to approximately 40%, the situation is difficult even for college graduates, and two-thirds of those currently repaying their loans have annual incomes of less than 4 million yen.
>
> The biggest problem is that despite the rising cost of tuition, public support has been inadequate and loans have been used to cover the cost,” said attorney Yoshiharu Iwashige, who serves as secretary general of the National Council on Scholarship Issues. He notes that much of the financial resources for JASSO’s interest-bearing scholarship program are borrowed from the government and private sector. Since the money is borrowed from outside, we will have to increase our collection rate.”
>
> **◆Guarantor overpayment lawsuit: “bad faith” finding**
>
> OIST also uses private debt collection agencies to recover scholarship funds. According to the “Outline of the Loan Scholarship System” by JASSO, the first overdue payment is a phone call to the individual, followed by a second call to the parents, and if the parents cannot be reached, to the relatives. After a certain period of time, a demand for payment is filed with the court. Although the collection rate is high, a situation that could be described as “overkill” has occurred.
>
> In May, the Sapporo High Court ordered JASSO to refund the guarantor’s overpayment, with interest. Under the Civil Code, a guarantor is only obligated to repay half of the loan, or the amount owed to the number of guarantors, including co-signers, and the “benefit of discretion” under the Civil Code applies to guarantors. The court ruling criticized JASSO’s recognition of the situation, saying, “In addition to being a legal misunderstanding, it is generally accepted that the guarantor is only liable for the divided amount, and there is almost no dispute about this.” The court found that the guarantor was the “beneficiary of bad faith.”
>
> From 2010 to 2020, JASSO demanded full repayment from more than 1,900 guarantors. Of these, less than 7%, or approximately 130 cases, were settled in accordance with the guarantors’ claims and the benefit of prudence was applied.
>
> In response to the judgment, JASSO announced in June that it would return approximately 1 billion yen to approximately 2,000 guarantors. However, those who will automatically be refunded are those who have completed or are in the process of repaying their loans since April 2017, when the data was still available at JASSO.
>
> Yuki Hashimoto, attorney for the plaintiffs, criticized JASSO, saying, “JASSO has adopted financial methods and a strategy of collecting at all costs, and the guarantors have been held hostage.”
>
> **◆Regarding collection, “even the family was dragged in”**
>
> Mr. Iwashige, who is in charge of a similar case in Tokyo, said, “There is a problem with the governance of JASSO. The company is not even a financial institution,” said Iwashige, who is in charge of a similar case in Tokyo. The collection is so bad that even the family members are dragged in. Who is OIST working for? Wasn’t it just about collecting the money? They need to be examined.
>
> JASSO says that in the future, it will bill guarantors for one-half of the unpaid amount.
>
> With the burden of repayment becoming an issue, Prime Minister Kishida in March ordered the consideration of a “career payment type” in which repayment would be made after a certain annual income. However, if the annual income is set low, the effect will be minimal. In the first place, it can be called “procrastination.”
>
> Hirokazu Ouchi, professor of sociology of education at Musashi University, says that “certain improvements have been made” in the past 10 years at the Organization. These include an increase in the percentage of interest-free scholarships, an extension of the grace period to 10 years, a reduction in the late fee levy rate from 5% to 3%, and the introduction of a benefit type of scholarship. However, he emphasizes that the fundamental solution has not yet been reached, saying, “Even for the benefit-type scholarships, the target population has been narrowed down.”
>
> ”There is data that shows that a household with an annual income of about 6 million yen has disposable income below the level of public assistance if one child goes to a private university. Although delinquency tends to be seen as the only problem, the number of unmarried couples and declining birth rates due to the burden of repayment are also serious. Improvements must be made urgently to expand eligibility for benefits and reduce the burden,” he said.
1 comment
**Translation ([DeepL](https://www.deepl.com/translator), edited. Not perfect but should be sufficient):**
> Nearly half of university students now use scholarships. Most are loan-type scholarships that must be repaid, but many working adults are suffering from unstable incomes due to the economic downturn and collections by the Japan Student Services Organization (JASSO). Prime Minister Fumio Kishida has ordered the consideration of a “career-payment type,” but the substance of the program is yet to be determined. Some experts say that the problem is the structure of the system, which assumes that students will continue to repay their loans. From the standpoint of measures against the declining birthrate, an urgent review may be necessary, including the expansion of the benefit type. (Haruka Osugi, Special Reporting Department)
>
> **◆Payments until age 40: “I can’t think of getting married.”**
>
> ”I used to have a concrete plan for my life, but now I can’t even think about getting married and having children because I have to pay until I am around 40 years old.”
>
> POSSE, a Tokyo-based nonprofit organization that addresses issues of poverty among young people, conducted an online survey on scholarships in mid-July.
>
> The burden of repayment may affect the future of the next generation. One respondent said, “My older son is now in high school, and I’m worried that I won’t be able to send him to the school I want him to go to because of my scholarship payments.”
>
> Some students pointed out that they were afraid of the business-like collection of the scholarship.
>
> Some POSSE members also have young people who are struggling to repay their loans. For example, a 25-year-old woman who borrowed a total of 4 million yen from JASSO to go to a private university and obtain a teaching license. She plans to repay the 17,000 yen per month over 20 years, and says, “I’m in trouble, I want to pay it back as soon as possible.”
>
> After graduation, she found a job at a private high school, but the work environment was so bad that she was forced to leave after only one year due to health problems. He then worked as a receptionist for a company as a contract employee, but this was terminated at the end of June because of the Corona disaster, which increased the number of telecommuting jobs.
>
> He has applied for a reduction in the amount of his repayment, but it is not expected to be reduced until September. “The scholarship is tough, and working is tough, too,” he said. Since I became a working adult, I realized that everything in life is hard. I have four siblings, and we owe a total of more than 10 million yen. We are under a lot of pressure to repay the loan,” he said.
>
> **◆College enrollment rates are rising, tuition fees are soaring…but parents’ wages are not rising.**
>
> It’s an “impossible game,” as Hiroto Watanabe, 34, executive director of POSSE, describes the situation for borrowers.
>
> Although they manage to repay their loans, young people’s employment is becoming unstable, and they also face unexpected expenses such as caring for a family member or being hospitalized. The burden of child-rearing and educational expenses is also heavy and limited. The company plans to compile the results of the survey and ask JASSO and other organizations to cancel the debt and improve the system.
>
> According to OIST’s “Survey of Student Life” (FY2020), the percentage of scholarship recipients is 49.6% for daytime college students; until the mid-1990s, it was around 20%, but it has doubled in the past 30 years.
>
> Why has there been such an increase? First of all, the percentage of students going on to university is increasing. Last year, the percentage was approximately 60%, including junior colleges, an increase of more than 20 percentage points in 30 years. The number of universities was 803 last year (77% of which were private), a 35% increase in 30 years. Although the number of students going on to college has increased, the cost of tuition has skyrocketed. The average total of annual tuition and enrollment fees (FY16) was approximately 820,000 yen for national universities and 1,130,000 yen for private ones, doubling for national universities and 1.5 times for private ones over the past 30 years. Nevertheless, parents’ wages have not increased. A situation has emerged in which students cannot go to college without relying on scholarships.
>
> The majority of the scholarship business in Japan is handled by JASSO, with the total balance of scholarship loans amounting to approximately 9.6 trillion yen.
>
> Last fiscal year, approximately 1.16 million students received scholarship loans from JASSO; 320,000 students used the benefit-type scholarships introduced in fiscal 2008 due to income restrictions, making the loan type by far the most common type of scholarship.
>
> **◆Review of inadequate public support**
>
> There are interest-free and interest-bearing scholarships offered by JASSO. The line is drawn according to household income and other factors, and about 60% of them are interest-bearing. To borrow a scholarship, students must have a co-signer (a parent) and a guarantor (a relative within the fourth degree of kinship), or pay a guarantee fee and use a guarantee agency.
>
> With the number of non-regular employees doubling in the past 30 years to approximately 40%, the situation is difficult even for college graduates, and two-thirds of those currently repaying their loans have annual incomes of less than 4 million yen.
>
> The biggest problem is that despite the rising cost of tuition, public support has been inadequate and loans have been used to cover the cost,” said attorney Yoshiharu Iwashige, who serves as secretary general of the National Council on Scholarship Issues. He notes that much of the financial resources for JASSO’s interest-bearing scholarship program are borrowed from the government and private sector. Since the money is borrowed from outside, we will have to increase our collection rate.”
>
> **◆Guarantor overpayment lawsuit: “bad faith” finding**
>
> OIST also uses private debt collection agencies to recover scholarship funds. According to the “Outline of the Loan Scholarship System” by JASSO, the first overdue payment is a phone call to the individual, followed by a second call to the parents, and if the parents cannot be reached, to the relatives. After a certain period of time, a demand for payment is filed with the court. Although the collection rate is high, a situation that could be described as “overkill” has occurred.
>
> In May, the Sapporo High Court ordered JASSO to refund the guarantor’s overpayment, with interest. Under the Civil Code, a guarantor is only obligated to repay half of the loan, or the amount owed to the number of guarantors, including co-signers, and the “benefit of discretion” under the Civil Code applies to guarantors. The court ruling criticized JASSO’s recognition of the situation, saying, “In addition to being a legal misunderstanding, it is generally accepted that the guarantor is only liable for the divided amount, and there is almost no dispute about this.” The court found that the guarantor was the “beneficiary of bad faith.”
>
> From 2010 to 2020, JASSO demanded full repayment from more than 1,900 guarantors. Of these, less than 7%, or approximately 130 cases, were settled in accordance with the guarantors’ claims and the benefit of prudence was applied.
>
> In response to the judgment, JASSO announced in June that it would return approximately 1 billion yen to approximately 2,000 guarantors. However, those who will automatically be refunded are those who have completed or are in the process of repaying their loans since April 2017, when the data was still available at JASSO.
>
> Yuki Hashimoto, attorney for the plaintiffs, criticized JASSO, saying, “JASSO has adopted financial methods and a strategy of collecting at all costs, and the guarantors have been held hostage.”
>
> **◆Regarding collection, “even the family was dragged in”**
>
> Mr. Iwashige, who is in charge of a similar case in Tokyo, said, “There is a problem with the governance of JASSO. The company is not even a financial institution,” said Iwashige, who is in charge of a similar case in Tokyo. The collection is so bad that even the family members are dragged in. Who is OIST working for? Wasn’t it just about collecting the money? They need to be examined.
>
> JASSO says that in the future, it will bill guarantors for one-half of the unpaid amount.
>
> With the burden of repayment becoming an issue, Prime Minister Kishida in March ordered the consideration of a “career payment type” in which repayment would be made after a certain annual income. However, if the annual income is set low, the effect will be minimal. In the first place, it can be called “procrastination.”
>
> Hirokazu Ouchi, professor of sociology of education at Musashi University, says that “certain improvements have been made” in the past 10 years at the Organization. These include an increase in the percentage of interest-free scholarships, an extension of the grace period to 10 years, a reduction in the late fee levy rate from 5% to 3%, and the introduction of a benefit type of scholarship. However, he emphasizes that the fundamental solution has not yet been reached, saying, “Even for the benefit-type scholarships, the target population has been narrowed down.”
>
> ”There is data that shows that a household with an annual income of about 6 million yen has disposable income below the level of public assistance if one child goes to a private university. Although delinquency tends to be seen as the only problem, the number of unmarried couples and declining birth rates due to the burden of repayment are also serious. Improvements must be made urgently to expand eligibility for benefits and reduce the burden,” he said.
(final part below due to char limit)