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Tuesday, Nov. 22, 2005

Perks elude foreign campuses in Japan

College branches pass on costs amid struggle for recognition, tax breaks

Staff writer

Sara Meshino goes to Temple University Japan Campus in Minato Ward, Tokyo, and takes classes in English, paying 472,500 yen for nine credits this semester from September to December.

The 22-year-old wants to acquire English skills and attend the school's main campus in Philadelphia, and thinks the expensive tuition is worth it.

But then she learned the fee included 22,500 yen in consumption tax, which students at Japanese universities are not obliged to pay, and that stuck in her craw.

"(The 22,500 yen) is a lot," said Meshino, who pays her entire tuition by herself.

To reduce the burden on students like Meshino, the few remaining schools in Japan affiliated with foreign universities are increasingly urging the government to offer them the same tax exemptions Japanese institutions receive. TUJ Dean Kirk R. Patterson said the government should give the campuses the favorable tax treatment Japanese universities and colleges have long enjoyed so they can provide a diverse system of higher education and human resources.

But the ministry has not been obliging.

Branches of foreign universities have not been recognized as institutions of higher education by the Education, Culture, Sports, Science and Technology Ministry.

Last December, however, the ministry began offering the status Foreign University Japan Campuses if the institutions' academic programs are the same as the equivalent degree programs at the parent institutions overseas.

The official recognition was in response to the schools' requests and the ministry's goal of providing diverse education, a ministry official said.

With the recognition, for example, students at foreign-affiliate institutions can receive commuter pass discounts, transfer credits to Japanese universities and apply for Japanese graduate schools.

In addition, students from overseas can get student visas enabling them to study here for more than a year. Campuses without such recognition can only sponsor cultural activity visas valid for 12 months.

TUJ, which was established in 1982 and has some 2,200 students in Tokyo, Osaka and Fukuoka, gained the official recognition in February. Four other schools, including Wisconsin-based Lakeland College Japan Campus, with 300 students, are applying for the recognition.

However, status as a Foreign University Japan Campus still excludes favorable tax treatment, thereby not reducing the burden on students, Patterson said.

Japanese universities that have "gakko hojin" (academic juridical person) status under the Private School Law receive favorable tax treatment because they meet the ministry's requirements. Their students are exempt from paying the consumption tax on tuition and universities are exempt from paying taxes on income and donations.

Andrew Conning, assistant dean of Lakeland College Japan Campus, said ineligibility for tax breaks makes foreign university tuition more expensive than their Japanese counterparts.

"I think it's a big barrier" for other foreign universities and colleges to enter Japan and offer education programs, he said.

A hard requirement is schools must own their buildings and land, Patterson of TUJ said. His campus rents both.

Even if the university clears that hurdle, other problems remain, he said.

"(The criteria) also brings many restrictions that would make it difficult to continue operating (TUJ) like a U.S. university," he said.

For instance, the school must gain approval from the education ministry when it launches a new course, and the number of credits for graduation must be 124 or more. TUJ sets a minimum of 123 credits for students in eight majors.

The branch cannot change the number because it needs to have the same program as the U.S. campus, Patterson said, explaining that TUJ students often take classes in Philadelphia and students there also study at the Japan branch.

Patterson said the ministry should create a new status for foreign university branches so they can get tax breaks and maintain their programs.

But Kiyoshi Saito, vice chief of the ministry Higher Education Bureau's student services division, said he does not see an urgent need for a new status, because only four foreign university branches are currently applying for the ministry's recognition.

There are only some 10 foreign schools operating in Japan, compared with around 30 in the late 1980s and early 1990s during the bubble economy. Many failed to gain enough students and closed because they were not officially recognized and their tuition was higher than Japanese universities.

The declining number of high school graduates is another factor. The shrinking pool means all universities, domestic or foreign, have fewer potential recruits.

Saito said TUJ may be able to get tax breaks by gaining local-government recognition as a vocational or "miscellaneous" school because the criteria for such status are more relaxed.

TUJ is now applying for Tokyo Metropolitan Government recognition as a miscellaneous school.

However, Hiroyuki Fukuda, an official at the metropolitan government's private school administration section, said owning the school buildings and land is an important factor to gain the status, because financial problems could force schools renting their facilities to close down. And this in turn would leave their students out in the cold.

But Patterson noted that ownership is no guarantee of stability, pointing out that some Japanese universities have gone bankrupt.

"A good program will attract students who are willing to pay tuition, and that is the best guarantee of long-term stability," he said.

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