Half of Japanese college students are currently enrolled in the national scholarship system and most of these scholarships are loans which will need to be paid back with interest.
Imagine you borrow \120,000 every month for 4 years from the Japan Student Services Organization (JSSO). Then, in addition to the original total amount of \5,760,000, you will have to pay an interest of approximately \600,000 or 10% of the total loan. In other words, the students who use the scholarship system will have to hold a heavy burden when they go out into society. Moreover, if you are late in paying back the loan, a 5% interest charge will be added to the principle. If you stop repayments, the court will send you a bill. Even if the debtor passes away, it is possible that the bereaved are asked to pay the rest of money. There is a relief system which extends the debt due date, but it doesn’t reduce the amount they have to pay. In short, you may need to spend your entire life working to pay back the scholarship. This is the system which is provided by the JSSO which leads the scholarship enterprise of Japan.
“I don’t think that is right” said Yoshiharu Iwashige, a lawyer who specializes in scholarship problems. According to Mr. Iwashige, scholarships are little different than typical debt because you can borrow money without a realistic plan to pay it back. However, in today’s job market, there is no guarantee of stable employment, and you don’t know what will happen in the future. You might get sick, or even get in an accident. No matter what kind of situation you are in, the repayment system works automatically. Because of this, there are a lot of people who can’t escape from the scholarship debts. He calls those people “victims”. Mr. Iwashige said “Japan has expensive school fees yet the scholarship system is very weak. It means that if you want study but have no money, you have no choice but to get into debt. This is so outrageous.”
To those “victims”, he advised one thing. “If you feel like it is impossible to pay your debt back, please file for personal bankruptcy.” There are some other ways, but personal bankruptcy usually works the best in many cases. If you file for bankruptcy, all your debts will be written off though any consigner or guarantor will remain liable for your debt. People around you won’t know when you go into bankruptcy and you are allowed to keep \990,000 and some necessities. Most of us may think of people in bankruptcy as irresponsible who abandoned their responsibilities for repayment. Bankruptcy caused by a scholarship, however, is not a personal problem. It is because scholarship problems are related to school fees, parent’s incomes, and all the other social problems that Japan is going through. “Personal bankruptcy is accepted as a right in order to live an unencumbered life,” he said forcefully.
Written by Narito Tanaka, Yutaroh Kumagai, Minori Tachibana
Edited by Takeru Suzuki