Japan Press Weekly

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2016 October 19 - 25 [SOCIAL ISSUES]

Pressed by public, burdens of student loan repayments slightly relieved

Pressed by the general public calling for reduction of the repayment of “scholarship” loans, the Ministry of Education will start a new system in April next year to allow borrowers to pay back their loans based on their incomes.

Under the existing system, former students have to repay their loans in accordance with the amount they borrowed.

The new system, however, requires even persons without an income to repay at least 2,000 yen a month. The government will grant a moratorium on repayments for those who have difficulty in continuing repaying the loan for such reasons as unexpected disasters, injuries or disease, living on public assistance, and earning an annual salary of less than three million yen. However, the authorities will limit the grace period to ten years for low-income earners. The pay-back period will last until they pay off the loans or until their deaths.

If they become dependents of someone, they have to compute the pay-back amount based on all incomes combined. This means, in effect, obliging somebody else other than loan borrowers to repay the loans in their stead in violation of the Civil Code stipulating the principle of “division of property”.

Lawyer Iwashige Yoshiharu, who is working to help establish a fair scholarship program, said that it is one step in the right direction. However, he singled out as problems the measure demanding repayments even from non-income earners as well as the measure adding breadwinners’ incomes in regard to determining the repayment amount.

Iwashige said, “The 2,000-yen figure is the amount needed for many families to live for a couple of days. The government should postpone repayments until borrowers receive enough in wages to repay their debts.” He also stressed the need to revise the government plan which virtually imposes sustainers to repay their dependents’ scholarship loans. The lawyer said, “The repayment period should be extended indefinitely until they can earn an annual income of more than three million yen, and this step should also apply to persons who currently have a hard time paying off their loans.”

He also said, “Many countries in the world employ a grant-type scholarship program which does not require students to repay. In Japan, the government finally began considering the introduction of this program. I hope the scale and details of the program will be accessible for all students in need.”

Past related articles:
> PM expresses his intention to create grant-type scholarship program[March 31, 2016]
> Young people in Japan are struggling with repayment of so-called ‘scholarship’ loans [February 23, 2016]
> JCP issues proposal calling for improvement in scholarship program [October 8, 2014]