March 23, 2009
The Japan Student Services Organization (JASSO) will start blacklisting those who are in arrears with repayment of student loans in the FY 2010. Many are pointing out that this system will impose discrimination against students based on their economic status which is prohibited by the Fundamental Law of Education.
Under the new system, loan borrowers are forced to sign a paper that will allow JASSO to send their information to consumer data firms if they are in arrears with repayment of loans for more than three months.
A freshman at a private university in Kyoto said, “I can’t go to college without the student loan. I had no choice but to sign a paper.” After his parents divorced, he is living with his father, who is ill, unemployed, and on welfare. He has been using student loans, with and without interest, since entering high school.
As the reason for the introduction of the “blacklisting” system, the government and JASSO point out the 1.4 percent increase in the number of loan borrowers who cannot catch up with their repayment in the past seven years. However, the increase is due to the 1.6 percent increase in the number of loan users in the past seven years. Actually, 94 percent of all loans have been returned each year.
Many of those who are behind in their payments are having financial difficulties. 45 percent of JASSO loan users are low-income earners, and 23.5 percent are unemployed.
A 23-year-old loan borrower is required to repay 20,000 yen a month for 20 years to return a total of 4.5 million yen. Working on a one-year contract to receive 100,000 yen per month in addition to having a part-time job, his total monthly income is 160,000. “As long as you have financial problems, just because you are blacklisted doesn’t mean you will be able to repay the loan,” he said.
The “blacklisting” system was established as a measure to give shape to the basic policy for structural reform, approved by the then cabinet in July 2006. The government and JASSO are planning to impose additional measures, such as publicly releasing the names of college having many students who are behind in their payments, taking legal actions to those who are 9 months overdue, and removing the three percent ceiling on the interest rate.
One in three college students and one in two graduate students are using the student loan system. Thirty percent have no-interest loans while 70 percent pay interest on their loans.
Established to help fulfill the right to an education guaranteed by the Fundamental Law of Education, the student loan system is to prevent students from giving up on furthering their education due to financial reasons.
Students and JASSO workers are now calling on the government to provide more interest-free loans for students, create a scholarship system, and make it easier for borrowers to repay the loans.
Under the new system, loan borrowers are forced to sign a paper that will allow JASSO to send their information to consumer data firms if they are in arrears with repayment of loans for more than three months.
A freshman at a private university in Kyoto said, “I can’t go to college without the student loan. I had no choice but to sign a paper.” After his parents divorced, he is living with his father, who is ill, unemployed, and on welfare. He has been using student loans, with and without interest, since entering high school.
As the reason for the introduction of the “blacklisting” system, the government and JASSO point out the 1.4 percent increase in the number of loan borrowers who cannot catch up with their repayment in the past seven years. However, the increase is due to the 1.6 percent increase in the number of loan users in the past seven years. Actually, 94 percent of all loans have been returned each year.
Many of those who are behind in their payments are having financial difficulties. 45 percent of JASSO loan users are low-income earners, and 23.5 percent are unemployed.
A 23-year-old loan borrower is required to repay 20,000 yen a month for 20 years to return a total of 4.5 million yen. Working on a one-year contract to receive 100,000 yen per month in addition to having a part-time job, his total monthly income is 160,000. “As long as you have financial problems, just because you are blacklisted doesn’t mean you will be able to repay the loan,” he said.
The “blacklisting” system was established as a measure to give shape to the basic policy for structural reform, approved by the then cabinet in July 2006. The government and JASSO are planning to impose additional measures, such as publicly releasing the names of college having many students who are behind in their payments, taking legal actions to those who are 9 months overdue, and removing the three percent ceiling on the interest rate.
One in three college students and one in two graduate students are using the student loan system. Thirty percent have no-interest loans while 70 percent pay interest on their loans.
Established to help fulfill the right to an education guaranteed by the Fundamental Law of Education, the student loan system is to prevent students from giving up on furthering their education due to financial reasons.
Students and JASSO workers are now calling on the government to provide more interest-free loans for students, create a scholarship system, and make it easier for borrowers to repay the loans.
