Based on data by Japan Student Services Organization (JASSO), there are about 6.9 million students in high school, university, and graduate schools in fiscal 2011. 1.29 million of these have taken out student loans to finance their studies. Unfortunately, 330,000 failed to repay their debts in 2011, leaving 475.5 billion yen (approx. $5 billion) in arrears. This was mainly attributed to lower incomes because of the country’s prolonged economic slump.
Last month, in a survey conducted by the Japan Federation of Bar Associations of people who have outstanding student loans, it was discovered that of 332 cases, half intimated that they could not repay their loans due to lack of jobs or low income. The fact that university tuition fees have ballooned just made things even worse. The Education, Culture, Sports, Science and Technology Ministry said that, currently, the average annual tuition in private universities is some 860,000 yen ($9,000), while for public universities it’s 540,000 yen ($5,700)—that’s 160,000 yen to 220,000 yen ($1,700 to $2,300) more than they were 20 years ago.
University of Tokyo’s Professor Masayuki Kobayashi, an expert in the public loan system, said that it is important to create a system in which the student will not have a hard time paying back the loan he took out. In line with this, JASSO has launched a scheme wherein the monthly repayment amounts could be lessened if the period to pay them is extended. Even more generous perhaps, is a system in which those who earn less than 3 million yen ($31,600) are indefinitely exempted from repayment. An education ministry official was also quoted as saying, “In addition to the scholarship program that doesn’t require repayment, we’ll consider how to improve financial assistance to students.”
[via Asia One]