Japan's Student Shortage Forces Colleges to Recruit in China

Oct. 10 (Bloomberg) -- Yonosuke Fukuda succeeded his father as chancellor of Tohwa University, a private engineering college on Japan's Kyushu island, five years ago. He plans to close it down when the current crop of students graduates in 2009.

``There is no bright future'' for Japanese universities, said Fukuda, 38, who had 140 student applications for 160 slots this year. ``It's time to quit before things get even worse.''

Japan's 550 private universities are running out of students as the country's birthrate declines. About 40 percent of colleges failed to meet their enrollment targets this year and a quarter are in the red, according to the Education Ministry.

The shortage is forcing some colleges to recruit students from overseas, especially China, with its large population, proximity and linguistic similarities. Others are creating programs that appeal to the swelling ranks of retirees.

``It's a life or death situation,'' said Makiko Yoshimura, a credit analyst at Standard & Poor's in Tokyo, who studies college finances. ``Fewer students means a cash-flow problem.''

While 52 percent of Japanese 18-year-olds are attending college this year, up from 46 percent a decade ago, their numbers dropped to 1.4 million in 2005 from 2.1 million in 1992, according to the Education Ministry.

Japan's population shrank last year for the first time, with 21,266 more deaths than births.

Ten years ago, only 3.8 percent of private universities failed to enroll enough students, according to the Promotion and Mutual Aid Corporation for Private Schools.

New Competition

``Japanese universities never had to compete like this,'' said Yasuhiko Nishii, a division manager at the corporation.

Private colleges expanded faster than their public counterparts as the population grew after World War II. Some 478 private universities served 74 percent of Japan's students in 2000, up from 105 with 52 percent of enrollment in 1950, ministry figures show.

Japan's 87 state-run universities aren't immune from student shortages, said Norihito Hisada, who tracks college finances for the ministry. Mergers have pruned their ranks from 94 two years ago, he said.

Some students may benefit from the crunch. Many colleges are relaxing acceptance requirements, making career-defining entrance exams less stressful, said Keigo Nakano, a spokesman at the ministry's college-entrance section.

Many private universities will have to merge to survive, said Kazuhito Miyamoto, an administrator at Johnan Academic Preparatory Institute Inc. in Tokyo, which helps students prepare for college entrance exams.

``Old students and the foreign students may influence their revenue to a certain extent,'' Miyamoto said. ``But I doubt it will significantly contribute to their bottom line.''
Tailored to Seniors

At 55, Yasuju Sato may be a poster man for change. The president of Ginseido Ltd., which rents office buildings in Tokyo, is taking a master's course tailored to seniors at Tokyo Keizai University.

Sato wasn't required to take an entrance exam and has four years to complete his degree in economics instead of two. ``It's very important to keep exercising your brain,'' he said.
So far, Sato is the only student in the senior program, said Katsuya Sasagawa, a university spokesman.

Efforts to lure overseas students also are meeting with mixed success. Japan hosted 121,812 such students as of May 1, 2005, more than double the number in 1995, Education Ministry figures show. China accounted for 80,592 students, followed by South Korea with 15,606, Taiwan with 4,134 and Malaysia with 2,114. There were 1,646 U.S. students.

China's Growing Wealth

By comparison, 44 percent of the 572,509 overseas students in the U.S. came from China in 2003-2004, according to the U.S. Department of Education.

While growing wealth in China is allowing some parents to pay for their children's overseas education, Xu Liang and Cheng Shuai said they needed financial help to attend Waseda University in Tokyo, one of Japan's two leading private colleges.

Getting a scholarship to Waseda was easier than winning one in the U.S., said Xu, 23. The son of a police officer and a school teacher from Jiangsu province, he is pursuing a doctorate in international politics.

Cheng, whose father is a coal miner in Shanxi province, is completing undergraduate degrees in international politics at Beijing University and international relations at Waseda.

``In Japan, the prices are very, very high,'' said Cheng, 20. ``But Japanese is easier than English because of Kanji.'' Kanji script, one of three used to write Japanese characters, is derived from Chinese.

Losing the Fight

State-run University of Tokyo charges 535,800 yen ($4,545) a year for tuition, plus a one-time admission fee of 282,000 yen. Waseda's tuition is 732,000 yen and admission is 290,000 yen.

In southwestern Japan, Hagi International University is losing the fight. The private college opened in 1999 with local government backing, advertised in China for students and added an 18-hole golf course, said spokesman Ryosuke Okano.

The moves didn't work. Hagi filed for bankruptcy protection in June 2005 with 3.7 billion yen of debt, the first university to do so.

Chancellor Fukuda of Tohwa University said he doesn't regret deciding to close. The financial drain was starting to imperil his high school and junior college, both of which are profitable.

``It's a positive step,'' Fukuda said.

To contact the reporter for this story: Tak Kumakura in Tokyo at tkumakura@bloomberg.net . Last Updated: October 9, 2006 11:30 EDT

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