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Controversy over Prepaid Tuition

(Entry by Makoto Nagasawa)

PROPHE Summary:

Japanese courts in major cities have issued rulings on prepaid tuition fees at private higher education institutions: to be returned or not. Referring to several elite and other private institutions, the Tokyo District Court sentenced them to return the prepaid tuition to students who did not enroll, though they had been admitted. A similar judgment was made in Kyoto District Court but not in Osaka District Court, due to a university guideline articulating a non-refund policy. Seeking the most prestigious institution to which they can aspire, new entrants are often forced to prepay entrance fees and first-year tuition to multiple universities once they are admitted by the institutions.

For the full story (shown with permission), see The Chronicle of Higher Education, November 2003,"Japanese Courts at Odds on Refunding Prepaid Tuition," by Alan Brender.
http://chronicle.com/temp/reprint.php?id=2cdnu0n0kuizwcdbhkhso5azcrn8p

PROPHE Observation:

Japanese private institutions have been facing challenges stemming from the country's economic recession of more than a decade, and from a need to "sell" themselves better in a more and more competitive market. Meanwhile, Japan looks ahead to when all applicants can enter some higher education institutions (envisaged for 2008). Private institutions see a need to provide better service to get better applicants, but this sometimes contradicts the need for increasing revenue. There are problems with the prepayment requirement and risks if it is removed. The regional differences in the verdicts over returning prepaid tuition and fees are noteworthy when these funds are considered as major resources for tuition-driven institutions. Also, finding the loopholes in law for fundraising is globally common for private higher education institutions.
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