The Issue of “Tuition Fees for International Students Being Too Low” Overlooked in the Discussion of the University of Tokyo’s “Tuition Fee Hike”（1/2）

Masahiro Kami, M.D., Ph.D. President,

Medical Governance Research Institute, Tokyo, Japan

Enhancing international competitiveness requires funding. However, the ongoing debate about the University of Tokyo’s “tuition fee hike” is ignoring a crucial issue. It is true that the financial situation of the University of Tokyo is weak, and that its fund management is inferior. Yet, in recent years, the university has lagged behind the trend where top Western universities have significantly increased their tuition revenue. Why is this the case? The proliferation of dependence on governmental measures, such as the “Universities of International Research Excellence” system, has prevented the University of Tokyo from adopting a mindset of independently attracting “endowments” from other countries.

The University of Tokyo’s plan to raise tuition fees has become a contentious issue. Initially, it was announced that tuition fees would be increased by about 110,000 yen during the release of the admission selection guidelines in mid-July. However, in light of opposition both inside and outside the university, the official announcement has been delayed.

The media has been critical of this move, as exemplified by the editorial in the Asahi Shimbun on June 26, titled “University Tuition Fees: Urgent Need for Discussion on Increasing Public Spending.”

Within the university, student protests have been gaining momentum. On June 21, security guards reportedly stopped a student attempting to enter Yasuda Auditorium, leading to an incident where a guard was injured. This led to the University of Tokyo reporting the incident to the Motofuji Police Station, resulting in police officers entering the Hongo campus.

In 1969, following the Yasuda Auditorium incident, the University of Tokyo and its students agreed on a “University of Tokyo Confirmation Document,” stipulating that police power would not be used to resolve internal issues. The recent actions likely violate this agreement, further intensifying student opposition.

I believe the current debate is missing the point. Why is there a need to raise tuition fees? The purpose is to stabilize the University of Tokyo’s management. The important question is who will bear these costs. We must discuss this rationally, based on objective data, which I aim to address in this article.

Fragile Finances and Lack of Liquid Assets

First, let’s look at the current situation at the University of Tokyo. It is undeniable that the financial condition is extremely poor. According to the latest available financial report for the fiscal year 2022, operating revenue increased by 2.2 billion yen to 266.3 billion yen. However, operating expenses expanded by 9.5 billion yen to 271.5 billion yen, resulting in a deficit of 5.1 billion yen.

Although the university reported a surplus by recording 93 billion yen in “extraordinary profits” from asset revaluation at the beginning of the fiscal year, a professor at the university noted, “Next year, we also expect a deficit of about 7 billion yen, and each department has been notified of a 6% budget cut.” If the yen continues to weaken, and prices and labor costs continue to rise, the financial situation will only worsen.

The University of Tokyo’s total assets amount to 1.4698 trillion yen, but 1.285 trillion yen of this is tied up in fixed assets that are difficult to liquidate. The university has only 184.8 billion yen in liquid assets and 128.4 billion yen in cash and deposits. Continued deficits at this rate would inevitably lead to bankruptcy.

Both the University of Tokyo and the Ministry of Education, Culture, Sports, Science and Technology (MEXT) recognize this situation.

One of the rescue measures considered is the “Universities of International Research Excellence” system initiated by MEXT this fiscal year. MEXT explains, “While top-level research universities in other countries are enhancing their research capabilities with abundant funding, Japanese universities are struggling with both the quality and quantity of research papers. We will designate universities that are expected to develop internationally outstanding research and utilize research outcomes that bring about significant economic and social changes as Universities of International Research Excellence and provide grants from the university fund to support the plans they create to strengthen their research systems.”

The fund established by MEXT is worth 10 trillion yen. Ten universities, including the University of Tokyo, applied in the first call for proposals, with Tohoku University being selected. Approximately 10 billion yen will be allocated in the first year.

For the University of Tokyo, which faces a 7-billion-yen deficit, this is a welcome relief. However, the university was not selected this fiscal year. A professor noted, “The administration had high hopes for this system, but those hopes were dashed.” This is likely one reason the university is pushing ahead with the tuition fee hike despite the anticipated backlash.

Fund Management Lagging Behind World-Class Standards

Fund management is crucial for university operations, and the University of Tokyo recognizes this. A document distributed at the “Comprehensive Science, Technology, and Innovation Council: Expert Investigation Committee on Research Universities Competing with the World” in April 2021 included a section on “The Status of University Funds,” comparing the fund management of top Western universities with that of the University of Tokyo.

In the fiscal year 2019, the University of Tokyo’s fund was 14.9 billion yen, generating 245 million yen in returns. This pales in comparison to top Western universities. Harvard University’s fund and returns were 4.5023 trillion yen and 200.4 billion yen, respectively, while Yale University’s were 3.3346 trillion yen and 140.9 billion yen. Oxford and Cambridge in the UK also managed funds of 823.5 billion yen and 459.1 billion yen, respectively.

The current approach seems to suggest that individual universities like the University of Tokyo cannot manage their funds, so the government will do it instead. As long as this mindset prevails, the University of Tokyo will continue to struggle. Given the financial situation of the country and the responses of the ruling party and the Ministry of Finance, reliance on government subsidies, whether through operating grants or the National Excellence Research Universities system, will inevitably lead to a decline.

To ensure academic freedom, economic independence is essential. Western universities focus on fund management to uphold their autonomy. Even in the US, the situation for public universities is different. The endowments for the University of California, Berkeley, and the University of California, San Diego (UCSD) are 527.9 billion yen and 190.8 billion yen, respectively, which are much smaller compared to Harvard and Yale. This is likely because public funds are available in emergencies.

Even in the Meiji era, our predecessors were aware of this. In Takashi Tachibana’s “The Emperor and the University of Tokyo: The Life and Death of the Empire of Japan,” it is mentioned that stakeholders at the time debated accepting a large sum of money from the government initially and then using it as a fund, aiming to stop receiving annual subsidies to become independent.

Had the University of Tokyo chosen independence from the government at that time, the current state of Japanese universities might have been different. Instead, the University of Tokyo chose to rely on the government, and as a result, it has not been able to grow alongside the government’s financial difficulties.

 This article is a translation of Foresight published on Jul 8, 2024