Ghosts of Low Birth Rate Haunting Japanese Universities in Real Life

A private university in Japan virtually declared bankruptcy after financial difficulties arising from a lack of students. Japanese educational institutions are anxious that the rumored “university bankruptcy” scenario was becoming true.

Hagi International University, a four-year private university in Japan’s Yamaguchi Prefecture, decided in its June 20 board of administration that it was unable to manage its debts of more than three billion yen (or about 30 billion won) and will file with the Tokyo Regional Court for an application of the civil regeneration law.

It is the second time that a Japanese university requested for the application of the civil regeneration law, which was adopted to dispose of insolvent companies— the first time being last June when Dohoku Culture University in northeastern Japan’s Sendai Prefecture filed for one. Considering that Dohoku University filed due to problems arising from fabrication of documents in founding the university and embezzlement of university officials, it is a tremendous shock to Japanese institutions that Hagi University’s financial management worsened because of a lack of students.

Hagi University was founded in 1999 with two departments—international studies and management information department—pursuing to “breed personnel with an international insight,” but faced economic trouble in its first year because it failed to fill the spots. In Japan, due to the reduction of the population, the number of freshmen is decreasing, while the number of universities is growing, leading to a fierce competition for survival among the universities.

In 2004, out of 500 private universities, 29.1 percent failed to enroll sufficient numbers, which is a great increase from the rate of a decade ago of 4.7 percent.

Nihon Keizai Shinbum reported, “In two years, when all students who want to go to a university can actually go to one, this will be true. Universities that fail to get freshmen will continue to close down.”

Won-Jae Park parkwj@donga.com