Behind the Scenes / Education costs put burden on households

The Yomiuri Shimbun

Children listen as a picture book is read to them at a nursery school in Tokyo.

By Yohei Fukumoto and Sachiko Asakuno / Yomiuri Shimbun Staff WritersThe Organization for Economic Cooperation and Development announced the results of a survey of member countries’ public spending on education in September. Among nations surveyed, Japan was found to have the lowest public expenditure on educational institutions as a percentage of gross domestic product. The survey also revealed Japanese nurseries and universities largely rely on private funding. The question of how public money should be spent on education seems likely to become a point of contention in the House of Representatives election to be held later this month.

Impact of low birthrate

Andreas Schleicher, OECD Director for the Directorate of Education and Skills, emphasized during an online press conference on Sept. 12 that money spent on education is an investment in the future, meaning Japan needs to actively invest in early childhood education.

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  • The Yomiuri Shimbun

    Prime Minister Shinzo Abe speaks at the first meeting of the Council for Designing 100-Year Life Society at the Prime Minister’s Office on Sept. 11.

  • The Yomiuri Shimbun

  • The Yomiuri Shimbun

  • The Yomiuri Shimbun

The survey encompassed 34 countries for which data is available, out of the 35 OECD member countries. It showed each country’s public expenditures in 2014 for educational institutions ranging from elementary schools to universities as a percentage of GDP.

Japan stood at 3.2 percent — far below the OECD average of 4.4 percent. In last year’s survey, Japan had finally managed to escape being dead last after languishing there for six consecutive years. However, this year, it fell to last place again.

Denmark led the ranking with 6.3 percent, followed by Norway with 6.1 percent and Iceland with 5.7 percent. Notably, the top spots were taken up by “high welfare standards, high cost burden” countries. Japan even scored lower than nations such as Britain with 4.8 percent, South Korea with 4.6 percent and the United States with 4.2 percent.

However, an official from Japan’s Finance Ministry countered, “Actually, Japan is not at the very bottom,” claiming that because of the chronically low birthrate in the country, Japan’s proportion of students as a percentage of its total population is the lowest of the OECD members. If a calculation was made on a per-child basis, Japan would stand at 23 percent — the same figure as the OECD average, according to the ministry. In other words, Japan absolutely spends a fair amount of public money per individual child.

Household budgets

Even textbooks are provided for free at compulsory education institutions in Japan, and support for students who go beyond compulsory education to high school is relatively generous as well. By comparison, it is a reality that, as a senior official of the Education, Culture, Sports, Science and Technology Ministry said, “Nurseries and universities are largely dependent on money provided by households.”

In Japan, 80 percent of 3-year-olds and 94 percent of 4-year-olds attend a day care or nursery. However, the OECD survey found that only 46 percent of the cost of early childhood education was covered by public money. That is the lowest of all OECD countries.

Also, the percentage of public spending on higher education was only 0.5 percent of GDP — less than half of the OECD average of 1.1 percent.

In fiscal 2015, enrollment fees and total tuition fees were about ¥2.4 million to complete a four-year program at national institutions and about ¥3.7 million at private ones, according to the education ministry. About 70 percent of university students were enrolled at private ones.

Scholarships in Europe, U.S.

In addition, many children in Japan attend cram schools and prep schools, further increasing the financial burden on households.

When a student attends private institutions during their entire 15-year school career from kindergarten through high school, that student will rack up an average of ¥17.7 million in educational expenses such as tuition fees and cram school fees, according to another survey released by the education ministry in 2015. That is over ¥12 million more than that same student would spend at public institutions.

The deep-rooted idea that “parents are responsible for education and should not rely on the government” is behind the low public spending on education in the country, according to Prof. Masayuki Kobayashi at the University of Tokyo, who specializes in education sociology. This culture is also found in other parts of East Asia, such as South Korea and Taiwan.

In Europe and the United States, on the other hand, the prevalent view is that financial burdens on households should be reduced to expand educational opportunities. The United States and Britain have traditionally taken an approach in which expensive tuition fees for university and other higher education institutions are covered by substantial scholarship systems. Other countries, such as Germany, have made university tuition free.

Economic disparities among households have been growing since the 2008 financial crisis. Kobayashi sounded the alarm, saying: “Households are already reaching the limit of what they can bear. There is a fear the gap between those who can afford to continue their education and those who cannot is becoming entrenched.”

Measures to ease burdens

Regarding public expenditure on education, Prime Minister Shinzo Abe proposed, just before the dissolution of the lower house, making nurseries and day cares free of charge and reducing the financial burdens of university education, thereby making such measures a point of contention of the lower house election.

At the first meeting of the government’s Council for Designing 100-Year Life Society on Sept. 11, the prime minister called for “securing the opportunity for everyone to receive a university education.” He aims to increase opportunities to enter university by expanding repayment-exempt scholarships or measures to eliminate or reduce tuition fees.

Today, nearly half of all university students use student loans. However, many struggle to repay these loans after they graduate.

The government created a repayment-exempt scholarship this fiscal year.

It is “to ensure no student is forced to abandon their higher education plan because of their family’s economic circumstances,” a senior official of the education ministry explained. However, when the scholarship is fully implemented next fiscal year, it is expected to be available to only about 20,000 students, or 2 percent of the freshman cohort, as securing financial resources is difficult.

Seeking to reduce the future financial burden, the Council for Designing 100-Year Life Society is also considering the introduction of a “career-dependent repayment system” in which graduates repay the loan depending on their income.

For early childhood education, financial burdens have been gradually reduced. The central government and municipalities provide subsidies to households with children enrolled at nursery schools depending on factors such as income. Of 1.25 million pupils of private nursery schools and others, more than 80 percent received subsidies this school year. About 120,000, or 9.6 percent, attend nursery school for free.

However, making education entirely free for all children aged 3 to 5 would cost about ¥730 billion. Even more money will be required to ease the financial burden imposed by entering universities.

Abe claims revenue from the increased consumption tax could be used to cover such costs. The pros and cons of this plan are sure to become fodder for debate in the lower house election.

“For the future of Japan, it would be effective to invest heavily in early childhood education where children are capable of absorbing a lot,” said Keio University Prof. Takero Doi, who specializes in finance. “With universities, there are some institutions that are not providing a proper study environment. We should tackle university reform before we talk about making higher education free of charge.”

(From The Yomiuri Shimbun, Oct. 3, 2017)Speech

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