Institutional mergers, a revised student loan scheme and more performance-based funding are among changes an OECD review team has called on Japan to make to its tertiary education system.

The recommendations come less than four years after Japan reformed the system to give greater autonomy to the country's more than 4,000 tertiary institutions.But the review team's report published last week says Japan has yet to make the most of those reforms because institutions, including more than 700 universities, have not changed the way they operate and the country's Ministry of Education has yet to establish its role in steering, rather than running, the tertiary education system। "At the institutional level this tendency is exacerbated by the fact that Japanese universities do not yet have a pool of academic administrators with extensive management and financial experience to take on the strategic management of more autonomous and entrepreneurial university institutions," the report says। "The result of all of this is that the rhetoric of change has been accompanied by the reality of conservatism। This is creating a worrying policy vacuum, with an attention to means rather than ends।"The report recommends the momentum of the 2004 reforms should not be lost and there should be a formal evaluation of the reforms after not less than five years. It calls for increased public investment in tertiary education but in return for continuing consolidation of institutions, more performance-based funding, increased diversity in tuition fees and institution revenues, and more efficient management.With Japan's shrinking student population, the report says private tertiary institutions will be forced to merge or downsize and the public sector should also consider "voluntary consolidation". Already, 30% of Japan's private universities and 40% of its junior colleges do not fill their current enrolment caps.The report recommends that universities be permitted greater flexibility in setting tuition fees and that undergraduate courses be permitted to vary much more widely than at present. "In our view this would be a beneficial development since it would encourage differentiation among institutions much more effectively than existing competitive grant schemes, and it would promote some differentiation in the price of courses that is sensitive to instructional costs and returns to schooling. Both of these already exist within the private sector of Japanese higher education."In terms of helping students pay those fees, the report suggests replacing the current mortgage-like student loan system which requires regular set payments, to an income-contingent system along the lines of Australia's higher education contribution scheme. This would require repayment of loans only when the students' income reached a certain level. Japanese universities receive relatively little money from fund-raising and donations and the report recommends universities do more in this area. Tax incentives should be reviewed and universities permitted to invest such funds as they see fit.The OECD also highlights increases in women's participation and employment in tertiary education but notes this has largely been caused by widening job opportunities rather than by particular changes in the tertiary education system. "In a system where only a handful of universities are known to have childcare centres - Tokyo, Ochanomizu, Tsukuba, Nagoya and Tohoku - considerable opportunities for improvement with respect to gender equity remain," it says.The report urges Japan to do more to attract international students and faculty, including provision of more student accommodation. "Given the active recruitment activities of its main competitors, it makes sense for Japan to enter especially the upper end of the international graduate student market in a more direct and effective way.""In spite of the pace and scope of change in recent years, much remains to be done," it concludes.The review was based on information obtained from Japan, including a country visit in 2006, and is the latest in a series of OECD reviews of tertiary education in member nations. It was conducted by University of Liverpool Vice-chancellor and former Higher Education Funding Council for England Chief Executive Sir Howard Newby, OECD analyst Thomas Weko, University of Virginia professor and Dean of the Curry School of Education David Breneman, former President of the Lund Institute of Technology Thomas Johanneson, and University of Oslo professor and Director of the Higher Education Development Association Peter Maassen.

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