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Home > Policy > White Paper, Notice, Announcement > White Paper > JAPAMESE GOVERNMENT POLICIES IN EDUCATION,SCIENCE AND CULTURE 1990 > PART1 Chapter2 2 6

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PART 1 Issues and Perspectives ofHigher Education
Chapter 2 Current Status of Higher Education and Issues Involved
2 Current Status and Issues of Expanded Higher Education, and Its Improvement and Enhancement
6 Improving and Strengthening Financial and Physical Resources for Higher Education



(1) Financing of higher education
1) Status of higher education finance
a Present situation

Educational expenditures for institutions of higher education are derived from tuition and other student fees, hospital income and other institutions' income, donations, and national and local government funds.

At the national level, there is a Special Account Budget for National Educational Institutions. The larger part of the budget for this special account is derived from a transfer from the budget of the Ministry of Education. Science and Culture in general account. (In 1990, this transfer amounted to 1,199.8 billion yen, accounting for about 60% of the total budget for the special account for national educational institutions.) Public funds for local public institutions of higher education include, in addition to local government funds, part of the Local Allocation Tax grants and national subsidies to medical universities (3,764 million yen in 1990). The Ministry of Education, Science and Culture provides private institutions of higher education with subsidies as well. The major part of the subsidies is those for current expenditures, but they also include those for unique and distinctive projects and for educational and research equipment. (The total subsidies to private institutions amounted to 261.9 billion yen in 1990 including non-recurrent subsidies. In 1988 the total amount of national subsidies for current expenses accounted for 16.0% of the total current expenditures of private institutions.)(A more detailed explanation will be given in (2) below for the Special Account for National Educational Institutions, and in Section 5 of Chapter 2 for national subsidies to private institutions.)

In addition to the above national expenditures for institutions of higher education, the national government expenditures related to higher education include grants to university teachers and researchers for their scientific research projects (total budget for these grants amounted to 55.8 billion yen in 1990) and national funds for the student aid programs of the Japan Scholarship Foundation (government advances to the Foundation totaled 78.3 billion yen in 1990 and national funds under the "Fiscal Investment and Loan Program" for student loans bearing interests totaled 35.6 billion yen in the same year.)

The proportion of the Ministry's total budget in 1990 spent on higher education is shown in Chart 1-2-20.

Chart 1-2-20 Budget for the Ministry of Education, Science and Culture, 1990

The total expenditures spent for the operation of institutions of higher education amounted to 4,330.8 billion yen in 1986 (1,951.1 billion yen for national and local public institutions and 2,379.7 billion yen for private institutions). Of this total, 2,055.7 billion yen was paid by national and local governments. (Of these public funds, 1,782 billion yen was spent on national and local public institutions and 273.7 billion yen on private institutions.)

The share of national and local public expenditures for higher education in national income is 0.8%. This percentage is lower than those in many European countries and the United States, although a superficial international comparison might be misleading because the structure of educational finance and other backgrounds vary among different countries. (See Table 1-2-24.)

Table 1-2-24 Higher Education Expenditures and Government Funds- An International Comparison

The proportion of higher education expenditures derived from student fees is 34% in Japan. This percentage is relatively high as compared with some selected countries in Europe and North America. (See Chart 1-2-21.) In Japan the greater part of expenditures for private institutions is derived from student fees (53.7%).

Chart 1-2-21 Percentage Distribution of Higher Education Expenditures by Source- An International Comparison


b Major issues regarding the financing of higher education

If institutions of higher education are to carry out relevant reforms and to fully fulfill their expected functions, it will be most important to help reinforce their financial basis as a basic prerequisite for enabling them to do so.

Since the l980's the national government has adopted a policy of restraining an increase in the total amount of the national budget, with the aim of financial reconstruction. While the provision of higher education in Japan is largely dependent on private institutions, a very large portion of the expenditures of these institutions is supported by tuition fees and other payments on the part of beneficiaries.

It is due to these circumstances that, as mentioned above, the proportion of higher education expenditures supported by public funds is rather low in Japan, as compared with some European and North American countries. Further, the over-all level of the financing of higher education including private funding in Japan is also lower than that in some other countries in Europe and North America. It has been pointed out that institutions of higher education in Japan face a critical situation with regard to the level of financial and physical resources for education and research, in terms of facilities, equipment and research funds allocated.

In order to ensure the qualitative improvement of higher education, it is necessary for the government not only to review the Standards for the Establishment of Universities and other statutory provisions and various practices in institutions of higher education, but also to strive to increase public expenditures for higher education. In increasing public funds, a more efficient and selective allocation of funds will be essential. In improving funds allocation, emphasis should be placed on: the reinforcement of the educational functions of institutions; the continuation and improvement of those educational and research activities which are of high standing by international standards; the response to people's demands for lifelong learning, etc.

Further, from the same point of view, it will be an important task for the government to incorporate innovative devices for flexible allocation of funds into the system of the Special Account for National Educational Institutions and into financial aid programs for local public and private institutions of higher education, in order to carry out government financial support to institutions of higher education efficiently and selectively, taking account of the efforts of individual institutions for ensuring the qualitative improvement of their own educational and research activities.

In this connection, the utilization of scientific research grants of the Ministry of Education, Science and Culture may deserve special attention. These grants, which are provided though national, local public and private institutions of higher education, have obtained a high appraisal because they have greatly contributed to facilitating research projects based on free ideas of researchers. It is hoped that these grants be increased substantially.

In addition, it is also important to promote the introduction of funds from the private sector into the financing of higher education institutions. The promotion of the introduction of private funds is expected to encourage self-reliant efforts on the part of individual institutions, and thus to contribute to reinforcing and strengthening the autonomous financial basis of each institution. From this point of view, it is necessary to increase and improve mechanisms for introducing funds from the private sector and to consider such new approaches as the utilization of a system of entrusting the custody and management of public sites to trust companies (which some universities have begun to consider to adopt) and the adoption of financial arrangements in which national and local governments and the private sector collaborate in supporting institutions of higher education.

2) An outline of the Special Account for National Educational Institutions.
a Special characteristics of the Special Account

The Special Account at for National Educational Institutions was set up in 1964 to separate the budgeting and accounting of national educational institutions from those of other expenditures under the responsibility of the Ministry of Education, Science and Culture. It was aimed at contributing to the expansion of national universities and other national educational institutions and at ensuring the distinctive and independent budgeting and accounting for these institutions.

The receipts of income in this special account comprise a transfer from the Ministry's general account, tuition fees, admission fees, examination fees, Hospital income, transfer from reserve funds, loans, income from the disposal of properties, donations, and other miscellaneous income. The expenditures in the special account comprise recurrent expenditures and capital outlay of national institutions, payment from donations, debt service, interests for short-term loans, etc.

The major characteristics of this special account are as follows:

l) In the case where receipts of income exceed budget estimates for particular programs, the receipts can be spent for expenditures incurred for the expansion of the programs by applying flexible arrangements provided for in the Regulations on National Budgets, so that university hospitals and other programs maybe smoothly carried out.

2) In order to promote the improvement and expansion of the facilities of university hospitals and the movement of university campuses, long-term loans can be utilized.

3) A part of the surplus funds (the excess of income over expenses) in closed accounts can be set aside as a reserve fund to be used for building costs.

4) In the case where certain properties under the custody of a national educational institution fall into disuse, the Ministry can dispose of them, and use the income from their disposal for the expansion or improvement of physical facilities for national institutions.

5) In this special account, there is a system of delegating some accounting power to the president of each national university. Under this system, the president can use a donation from some other body for any category of expenditure and in any fiscal year after the year when the donations were received.

6) So far as current expenditures are concerned, individual national institutions are allowed to spend expenses in a flexible way because a large part of current expenditures fall into such a comprehensive category of expense as "educational and research expenditures (calculated on the basis of costs per teacher)."

b Present state of expenditures in the Special Account for National Educational Institutions.

The 1990 budget in the special account reflects the Ministry's policy of selective allocation of funds into some priority areas. In the light of the current administrative and financial circumstances and the deliberations by the University Council, some reorganization and transformation of university programs and their expenditures were incorporated, placing emphasis on such urgent policy issues in education and research as 1) the expansion and reform of graduate schools, 2) the expansion of the training of manpower for areas in which there are strong demands,3) the improvement of mechanisms for accepting foreign students, and 4) the promotion of scientific research. The total budget of the special account for the 1990 fiscal year was 1,988.8 billion yen. The distribution of this total amount by category of expenditure and by receipt of income is as shown in Chart 1-2-22.

Chart 1-2-22 Breakdown of the Special Account Budget for National Educational Institutions by Categories of Expenditure and by Categories of Income, Fiscal 1990

Regarding the receipts of income, a transfer from the general account budget amounts to 1,199.8 billion yen or 60.3% of the total special account budget, incomes from university hospitals account for 20.8%, tuition and fees 10.1%, loans 2.7%, donations and other income from external bodies 2.5%, and income from the disposal of university properties 2.2%, respectively.

The proportion of the total budget for the special account derived from a transfer from the general account budget was 82.1% in the year when this special account was inaugurated, and reached a peak (83.5%) in 1971. Then the proportion has been gradually declining. On the other hand, the proportion of the special account budget supported by institutional income such as university hospital income, tuition and other fees, income from the disposal of public properties, and donations and other income from external bodies has been gradually increasing. The increase in income from external bodies indicates that individual universities have been responding more actively to the various demands of society on their own initiative through various systems and mechanisms for cooperation between university and society; such as the acceptance of donations for educational and research purposes, joint research programs with the private sector, and contract research programs (whereby university staff can be engaged in a research project at the request of an external organ on a contract basis). (See Chart 1-2-23.)

Chart 1-2 -23 Trends in the Percentage Distribution of the Special Account Budget for National Educational Institutions by Receipts of Income

Regarding expenditures in the special account, staff salaries constitute 55.6% of the total budget, and the other expenditures 44.4%. The latter expenditures include current expenditures for education and research (17.7% of the total budget), medical expenditures for university hospitals (12.9%) and capital expenditures for educational and research facilities (4.3%). As regards the distribution of the special account budget between staff salaries and the other expenditures, the proportion of the other expenditures has been gradually decreasing. In particular, the proportion of capital expenditures, which accounted for 13.9% of the total budget in fiscal 1981,gradually declined year by year, and was 7.3% in fiscal 1990. (See Chart 1-2-24.) Regarding key current expenditures for educational and research activities, namely 1) current expense calculated on the basis of per teacher costs, 2) current expense calculated on the basis of per student costs and 3) traveling expense for staff, basic unit costs (namely, per teacher costs, per student costs, and traveling expense per teacher) remained at the same level for several years until fiscal 1990, when some increase was given to per teacher costs and per student costs, and traveling expense was also increased in accordance with amendments to the Law Concerning Traveling Expense.

Chart 1-2-24 Trends in the Percentage Distribution of the Special Account Budget for National Educational Institutions by Categories of Expenditure

In the coming years further innovative attempts will be needed with regard to the management of the special account budget with the aim of maintaining and improving the level of financial and physical conditions for educational and research activities at national institutions.


(2) Expansion and improvement of physical facilities

Japanese society today has been rapidly growing into an information intensive society, and its various sectors have rapidly been more and more internationalized. The rapid progress of advanced science and technology has also been witnessed. In this context, educational and research programs in institutions of higher education have been diversified and heightened. The Ministry of Education, Science and Culture has been striving to expand and improve physical facilities for these institutions to help adapt them to the development of their educational and research activities. To keep up with various changes in the times, further efforts for exploring new concepts and new patterns of physical facilities for higher education institutions are being required.

1) Current status of physical facilities for institutions of higher education

Until about 1960 the construction work for institutions of higher education in Japan had been focused on the restoration of war-damaged buildings and the construction of emergency wooden buildings for new universities under the post-war educational reform. In the l960's there began the reconstruction of wooden buildings into reinforced concrete ones with the aim of protecting buildings against fires and other disasters and the expansion of physical facilities required to cope with the planned increase in enrollments in science and technology departments and with the inauguration of colleges of technology. As a result, physical facilities for institutions of higher education expanded rapidly during the 196O's (See Chart 1-2-25). In the latter half of the l960's, along with the social changes in the nation, New demands for universities emerged. Additional facilities for national institutions were constructed to cope with: the creation of new medical universities on the basis of a plan for locating medical universities or faculties in all prefectures; the creation of new universities based on new concepts, such as the University of Tsukuba, universities of technology and science, and new universities of education; and the creation of national universities' joint-use research institutes. Local public and private universities also expanded their facilities along with the creation of new universities and an increase in faculties and departments. Consequently, further expansion of physical facilities for higher education has been witnessed.

Chart 1-2-25 Trends in Floor Areas of Building for Universities, Junior Colleges and Colleges of Technology

As a result of the expansion of physical facilities mentioned above, institutions of higher education held buildings of approximately 45,131,000m2 in May 1989.

Today, however, universities are required to repair and rebuild those obsoletebuildings which were built during the first half of the 1960's when a dramatic quantitative expansion was achieved for higher education. Due to the severe budgetary restraint of the national government since the early years of the 198O's, building expenditures for national institutions of higher education have been reduced to one-half of those in the late 1970's. This decrease in building expenditures has made it difficult for universities to respond adequately to more diverse and more advanced demands for their educational and research activities. About 40% (as of May 1989) of the total floor areas (approximately 16,897,OO0m2) of the buildings of national institutions are twenty or more years old. The repair and reconstruction of these obsolete buildings are among the current major tasks of the government.

2) Facilities adapted to diversified and advanced educational and research activities

The Ministry of Education, Science and Culture is promoting the development of the "intelligent campus" concept with the aim of developing humane university campuses with various functions and with comfort and attractiveness enough to meet demands for making universities' educational and research activities more diversified, more advanced and more information-intensive. From this point of view, national universities have been striving to develop educational and research facilities equipped with "intelligent" functions. They have also been engaged in: the creation of international houses and other living accommodations for foreign researchers and students to cope with the internationalization of universities; the development of university information networks to cope with the information age; the construction of most advanced research facilities to positively promote key research projects for which there is a strong demand from society; and the creation of cooperative research centers to promote joint research projects between higher education institutions and industry. Meanwhile, there are a growing number of local public and private universities which are striving to develop and improve distinctive high-level facilities and equipment with a view to meeting educational and research needs which are becoming more diverse and more advanced, and with a view to making the university more attractive.

With the aim of helping make institutions of higher education more information-intensive, the Ministry or Education, science and Culture conducted studies on the planning and designing of information-intensive facilities for universities, and published reports on the basic concepts and principles regarding information-intensive facilities and on some case studies of such facilities.

3) Redevelopment of university campuses

Due to their obsolete and overcrowded facilities many universities find difficulty in carrying out sufficient educational, research, medical and other activities relevant to the 21st century.

For this reason, an increasing number of universities have been striving to revive enriched and functional environment and redevelop the whole campus so that they may cone with any changes in university functions which may take place in the coming years.

There are many national institutions carrying out such redevelopment work. They include the Electro-telecommunication University and the Hospital Attached to the Faculty of Medicine, Tokyo University of Medicine and Dentistry. In addition, there are some local public and private universities attempting to utilize their own sites more effectively and diversely. For example, Kogakuin University has rebuilt its former buildings into more unique and functional "intelligent" buildings.

4) The moving and consolidation of university campuses

Some universities have too small a campus in an urban area to carry out sufficient educational and research activities or to attempt their further development in the future. Some other universities find difficulty in carrying out a sound management of institutions, as well as sound activities for education and research, because their campuses are scattered. Many national universities located in urban areas are planning to move their campuses to suburban areas or to consolidate their scattered campuses into a single campus in a suburban area, with a view to securing a good educational and research environment with adequate comfort and attractiveness. At present, Osaka University of Education, Hiroshima University and Kanazawa University are formulating specific plans for moving or consolidating their campuses. Some local public and private universities located in urban areas are planning to move either all or part of their faculties into suburban areas so that they may easily accommodate additional faculties and departments and secure better conditions for their educational and research activities. Such institutions include Doshisha University and Tokyo Metropolitan University. It should be noted that Now interest long-term loans from the Japan Private School Promotion Foundation are available to those private universities which are located in certain designated urban districts either in the Tokyo Metropolitan area or in the Kinki Metropolitan area and plan to move outside the districts without expanding faculties or departments.


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