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Thursday, Dec. 12, 2002
Lawyer fights colleges' clause on nonrefundable tuition fees
By TOMOKO OTAKE
The college entrance exam season heats up next month, and many candidates are now cramming for the grueling written tests.
But this time it appears many parents may not have to fork out chunks of money to schools their children will never attend.
Thanks to Osaka-based lawyer Tadashi Matsumaru and his colleagues, private universities and colleges are finally beginning to discontinue their long-standing practice of refusing to refund tuition and other fees paid by applicants who are accepted but decide not to enroll.
Take the case of Kim Ryang, a 50-year-old father and business owner in Osaka's Minato Ward whose daughter Rimmi was accepted by both Osaka Keizai University and Kinki University in spring 2000.
The exam results at Kinki, Rimmi's first choice, were not announced until a day after her tuition and other fees were due at Osaka Keizai. So her family paid 620,000 yen as required to ensure that Rimmi wasn't aced out of that college.
After his daughter was accepted by Kinki, Kim asked Osaka Keizai officials to return the money, explaining that she would not be enrolling there. The university flatly refused, citing a clause in its brochure that says money it receives from students before enrollment "will not be returned under any circumstances."
Kim's story was similar to that experienced over the years by millions of parents across the country -- a problem that has long gone unaddressed.
Most university applicants -- or the parents who shoulder the financial burden of their children's college education -- have endured the cost, which can range anywhere from 250,000 yen to nearly 10 million yen depending on the university, presumably convincing themselves that the money ensures their children will at least have access to one school.
But Matsumaru is now waging an all-out war against the decades-old practice, and his initiative has been quick to find supporters among recession-plagued consumers who have long felt that something is not right with this arrangement.
The father of a college student himself, Matsumaru found the practice unreasonable when his daughter applied to schools a few years ago. But it was seeing a parent complaining about the practice on a TV program last spring that compelled him to act.
"I realized that I wasn't the only one who was outraged," Matsumaru said.
Within a week, he set up a hotline to hear opinions from parents, and was overwhelmed by the response -- more than 400 calls jammed the phone line in just six hours.
He then rounded up fellow lawyers and negotiated with universities on behalf of aggravated parents. Since June, the lawyers have filed a series of lawsuits against private universities that refuse to give money back. The 293 plaintiffs involved in the suits are demanding reimbursement totaling 359 million yen.
"There is no other deal like this," Matsumaru said. "How can schools deny refunds to students who do not receive their services?"
He remains undaunted by a series of rejections handed down in similar suits from 1963 through 1996. His ammunition: the Consumer Contracts Law.
The law, enacted in April 2001, is aimed at protecting consumers from various forms of fraud. It bans businesses from charging more than "the average amount of damages incurred" if their contracts with consumers are canceled.
Matsumaru argues that the amount of damages colleges suffer from a student's decision not to enroll are "either zero or at least far smaller than the amount they claim."
The lawyers' efforts to get the money back have exposed a big problem private universities face.
Matsumaru noted there is mounting concern that many private schools are suffering financial woes as the number of students of college age decreases with the continued fall in the national birthrate.
Recent moves by many universities to diversify their student-selection methods from mere written tests to those taking into consideration each applicant's background and aspirations is a disguised attempt to lure more in and thereby expand opportunities to secure funds, Matsumaru said.
Hidefumi Koide, secretary general of the Association of Private Universities of Japan, which represents 326 schools, acknowledged the financial hardships of his members.
"It is true that private universities, which play a key role in nurturing the nation's future talent, are, due to various circumstances, in dire financial straits," he said.
Koide added that, all in all, students are well aware of the schools' policy of not refunding money when applying. "We have never been engaged in what lawyers call a scam," he claimed.
Whether the practice constitutes a scam will be fully taken up in court, and the litigation will probably take years to conclude.
Meanwhile, Matsumaru has already scored a major victory. His group nudged the education ministry in May into issuing a reminder on an earlier directive, effectively banning private colleges from collecting money or setting refund-request deadlines before all public colleges announce their exam results.
Some schools have refunded some fees voluntarily. Ryukoku University in Kyoto Prefecture announced in May that starting next year it will reimburse all fees except for a 200,000 yen deposit. Applicants to the liberal arts program who do not enroll will get 430,000 yen back, while science majors will have 650,000 yen returned, according to university officials.
Now that Matsumaru has discovered the huge potential for the Consumer Contracts Law, he is combating another widespread commercial practice: the nonrefundable "shikikin" deposit money clause in housing lease contracts. He has recently spearheaded a civil suit involving 44 people who are demanding 175 million yen in refunds from landlords.