Japan's Private Universities Awash in Red Ink

Nearly a quarter of all private universities in Japan lost money in 2001, according to a report released last month by a quasi-governmental agency. As a result, many institutions have been forced to close.

The situation for Japanese junior colleges was even worse: Nearly half of the operators of those institutions reported losses. And in 2002, for both private universities and junior colleges, the conditions that brought about the losses only grew worse.

Shigeru Tsukada, an administrator with the Promotion and Mutual Aid Corporation for Private Schools of Japan, which prepared the report, said the poor economic performances of the institutions resulted mainly from decreasing enrollments because of a falling birth rate and a decade-long economic recession.

A steady increase in the number of new institutions has also hurt private universities, says Ichiro Nishida, vice president for general affairs at International Christian University, in Tokyo. More than 60 percent of the revenues of private universities and junior colleges is derived from tuition and student fees, according to the corporation.

Closing Doors

The number of students in junior colleges -- 90 percent of whom are women -- plummeted to 267,114 in 2002, from 446,750 in 1997. The number of those institutions in 2002 stood at 475, down from 504 in 1997. More of them are expected to close.

"The conditions were like a sleeping bear," said Mr. Nishida. "Now the bear is awaking, and we are feeling the crisis."

Many of the private universities that have remained successful started planning more than 10 years ago to find ways to attract students from the shrinking prospective-student pool as well as to bring in nontraditional students.

"Successful universities have changed their curriculums to attract new students and have come up with ways to meet the social needs of the community," said Yuichi Nakano, an administrator at Kokushikan University, in Tokyo.

"In the early 1990s, we actively welcomed enrollment of businesspeople, homemakers, and retired people to our education programs, and it has contributed to our financial stability," said a spokesman for Tamagawa University, in Tokyo.

Takayoshi Kobayashi, an official of Kanagawa University, in Yokohama, said his university, had also opened its doors wider and was offering a greater variety of certificate programs. He added that it had remodeled its campus to make it more attractive.

Mr. Nakano said Kokushikan had not gone that route. "If we had built new buildings in the 1990s, we would be on the verge of bankruptcy. But we were cautious and didn't incur borrowing costs."

"Private universities must cut costs," said Mr. Nishida. "We have to cut the salary levels of teachers and reduce the number." Faculty salaries account for 60 to 70 percent of the cost of operating a private university in Japan, he said.