Rough road ahead for private universities

The expansionary policy of private universities and the establishment of new universities in an attempt to lure students has backfired.

According to the Promotion and Mutual Aid Corporation for Private Schools of Japan, the percentage of private universities whose enrollment following the spring entrance examinations failed to meet their intake quotas hit a record high of 40.4 percent, exceeding the 40 percent mark for the first time.

The environment surrounding private universities has changed significantly in recent years.
The Education, Science and Technology Ministry abolished its policy on the establishment of new universities and new departments. Joint-stock companies may now open universities in special structural reform zones.

The deregulation has resulted in many new types of universities and departments being opened around the country.

According to the Promotion and Mutual Aid Corporation, eight new universities and 41 departments were created this spring, excluding those opened by joint-stock companies and those offering only correspondence courses.

As a result, the total intake quota increased by 9,258 from the previous spring to about 440,000, which was a key factor contributing to the unmet enrollment in the survey.
The number of university applicants, however, has declined.

According to the ministry, the number of 18-year-olds dropped from about 1.73 million in academic year 1996 to about 1.33 million this year, with that population expected to fall to about 1.17 million in 2018.

Tadao Kiyonari, a university affairs consultant at Hosei University, said the phenomenon was irrational from the viewpoint of supply and demand.

Why has supply failed to reflect demand? As competition for students intensifies among universities, each university has done its best to recruit students by opening departments in popular fields, such as nursing and welfare, and primary education.

On the other hand, the number of applicants for the less popular departments, such as engineering and pharmacy, which was recently changed from a four-year course to a six-year course, declined.

A Promotion and Mutual Aid Corporation official said it is not easy for universities to integrate or scrap existing departments when they consider the interests of the professors and students in those departments.

In other words, the expansionary policies that some universities have followed and the establishment of new universities--all to recruit more students--has resulted in a vicious cycle that has aggravated the environment for all private universities.

However, with the number of applicants for the popular nursing and welfare course leveling off, the official also pointed out such courses have their limits in attracting students.

A senior official from the education ministry said the ministry had no intention of tightening controls on universities again because the deregulation is a government policy.

As such, the number of universities that will go bankrupt after failing to recruit students is expected to rise.

The ministry has already begun mapping out measures to deal with possible university bankruptcies. In May last year, the education ministry released steps to deal with financially troubled academic institutions, including a program to protect students of bankrupt universities.
In the event that a university goes under, neighboring universities will be asked to accept students of the bankrupt university, reduce enrollment fees and accept the students' credits.

Meanwhile, a group of experts from the Promotion and Mutual Aid Corporation also released an interim report in mid-July on steps to deal with bankrupt universities. They proposed the introduction of a "yellow card" system under which the corporation will offer business advice to universities confirmed to have financial troubles.

In the event that such universities cannot improve their finances, the corporation will then take "red card" measures against them, such as terminating the provision of subsidies and loans and suspending student recruitment.

Next year, the number of applicants will match the enrollment quota.

To prevent private universities from going belly up, each university has to do its best to improve its finances. The latest survey showed that small universities whose enrollment quotas were fewer than 100 students increased their enrollment rates from the previous year.

As such, some universities might have to streamline their operations by reducing their number of departments and their enrollment quota. Some of the less-popular universities have offered job-hunting assistance and unique courses for students as ways to differentiate themselves from other universities.

However, instead of seeking immediate returns by opening popular new departments, universities should carry out concrete reforms, such as improving their quality, to impress students and firms.
(Aug. 1, 2006)
http://www.yomiuri.co.jp/dy/national/20060801TDY04003.htm