Student Aid Policy and the Opportunity of Higher Education

Abstract

This paper aims to show the trend of educational opportunity in Japan's contemporary higher education, as well as the reason for the increase of students from low-income families since 2002. In recent years, countries have had difficulty in financing higher education for several reasons. One response to this crisis is to increase the scale of private funding. For example, in some European countries, tuition fees have increased and grants were replaced by student loans. By these political changes, students from low-income families have shouldered a larger burden than students from high-income families. Similarly, Japan's higher education, which has a large private sector, has suffered from financial constraints and tuition fees have been increasing. Therefore, access to higher education for students from low-income families may diminish due to the rising tuition fees. Using "Survey on Student life" data collected by the Ministry of Education, I examined the recent trend of educational opportunities for higher education. In the 1990's, differences in participation rates between low-income students and high-income students have increased. However, we surprisingly found that access from low-income families has improved and that class differences in participation reduced in the private sector after 2002. Next, I explored the reason for an improvement in access from low-income families, in spite of the rising tuition fees. Our data indicated that students have been more and more dependent on student aid after the expansion of "scholarships" in 1999 by the Japan Scholarship Foundation. Moreover, empirical analysis showed that the rate of students receiving the "scholarship" grew rapidly in low-income students who attended private college and university. Thus, I concluded that the new student aid scheme contributed to equalizing the opportunity for higher education. In Japan, the term "scholarship" does not mean grant but loan. So students must pay back the loan after graduation. So far, parents have paid for their children's education and now the student himself must share his expense for education by making use of a student loan. Because the debt is larger for the student from low-income families, it may cause them to become reluctant to go on to college or university, because of debt-aversion in the near future. Therefore, we must consider to what extent and how we should pay for higher education.