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

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

 Medical Governance Research Institute, Tokyo, Japan

The Biggest Problem: “20 Years of Low Growth Since Incorporation”

On a global scale, the University of Tokyo’s biggest problem is its lack of growth since its incorporation as a national university corporation in 2004. According to materials prepared for the “Special Research University Survey Committee of the Council for Science, Technology and Innovation,” excluding hospital revenue, the University of Tokyo’s income increased by about 20% from 154.6 billion yen in 2005 to 185.5 billion yen in 2019. In comparison, top Western universities have shown significantly more growth.

During the same period, Harvard University’s revenue doubled from 308.1 billion yen to 606.2 billion yen, the University of California, San Diego (UCSD) increased from 161.5 billion yen to 372 billion yen (approximately 2.3 times), Oxford University increased from 71.6 billion yen to 220.1 billion yen (about 3.1 times), and Cambridge University increased from 110.7 billion yen to 295.9 billion yen (about 2.7 times).

In the past 20 years, the gap between the University of Tokyo and top US universities has become decisive in terms of revenue scale. Even Oxford and Cambridge, which had smaller operating scales than the University of Tokyo in 2005, have surpassed it.

The University of Tokyo has identified the lack of donations and patent income as major issues. In the aforementioned document, 9 of the 23 pages are dedicated to strategies for increasing donations and 4 pages for increasing patent income.

However, this focus may be somewhat off-target. While it is true that the University of Tokyo’s donations and patent income are less than those of top US universities, on a global scale, they are not necessarily low. In the fiscal year 2019, the University of Tokyo received 10.4 billion yen in donations and 900 million yen in patent income, comparable to Cambridge University’s 15 billion yen and 800 million yen, respectively.

Western nations boosted tuition income by attracting international students

Where the University of Tokyo significantly lags is in tuition fee income, apart from endowment income. The University of Tokyo’s tuition fee income is around 16.5 billion yen (14 billion yen from tuition fees, 2.1 billion yen from entrance fees, and 400 million yen from examination fees). Since becoming a national university corporation, the University of Tokyo raised its annual tuition by 15,000 yen in fiscal year 2005, but it has remained flat since then. As of the 2022 fiscal year, income from tuition fees accounted for only 8% of its operating revenue (excluding hospital income).

In comparison, Harvard University derives 22%, Oxford University 14%, UCSD 22%, and UC Berkeley 33% of their revenue from tuition fees. Notably, these universities have significantly increased their tuition fee income between fiscal years 2006 and 2019. Even the smallest increase at Oxford University was 36 billion yen, while UC Berkeley’s increase was 74.3 billion yen.

In fiscal year 2006, tuition fees accounted for 17% of UC Berkeley’s revenue, well below the 30% from research income. By fiscal year 2019, this had reversed to 33% from tuition fees and 23% from research income. UC Berkeley, once considered a research university, now sees education as its core business.

Why were we able to increase tuition revenues? It is because we have increased the number of international students. The number of international students worldwide has increased from 1.6 million in 2000 to 5.6 million in 2020. In 2018, about 1 million Chinese were studying abroad. These Chinese students have brought wealth to universities. The affluent Chinese are now able to graduate from prestigious universities abroad.

These Chinese students have brought wealth to universities, as they have become more affluent and have spared no expense to obtain an academic degree from a prestigious foreign university.

This is because the wealthier Chinese did not spare any expense to obtain a degree from a prestigious foreign university.

Leading universities in Europe and the U.S. set tuition fees high for international students. According to the Organization for Economic Cooperation and Development (OECD), the average tuition for an undergraduate student at a U.S. state university is $8,780, while that for an international student is 2.8 times higher, at about $24,500. In Australia, it is 3.8 times higher, and in Canada, 4.0 times higher. The same is true of the United Kingdom. Although overall data are not published, the ratio is 2.9 to 4.1 times higher at Oxford University and 2.4 to 6.3 times higher at Cambridge University. In these countries and universities, foreign students pay high tuition fees, while domestic students' tuition fees are kept at the same level as those of Japanese public universities.

Leading universities in Europe and the U.S. have been trying to secure Chinese students. The Chinese are interested in practical studies in IT, finance, science and engineering, and medicine. These universities used the tuition paid by international students to recruit excellent faculty members from all over the world. Between 2000 and 2020, the U.S. added about 670,000 international students, Canada about 470,000, and the U.K. and Australia about 330,000. The number of Japanese university students, including graduate students, is about 3 million. This is a good indication of the importance of foreign students in Japan.

Financial resources are needed to attract top-notch educators.

Over the past 20 years, the student composition of top Western universities has dramatically changed. This summer, Risa Morimoto, a student at the University of Toronto in Canada, interned at the Medical Governance Research Institute and noted, “Half of the students are Chinese.” This illustrates the reality of the globalization of university education in Western developed countries. It can be seen as attracting the best Chinese minds along with their financial resources.

The University of Tokyo has not been able to adapt to such changes. As of 2023, it had 4,968 international students, accounting for only 3% of undergraduate students and about 30% of graduate students. It pales in comparison to universities in the US, UK, Canada, Australia, France, Germany, and many in China.

The University of Tokyo and the Ministry of Education, Culture, Sports, Science and Technology (MEXT) have likely never considered international students from a university management perspective. Tuition fees are uniformly set at 535,800 yen for both domestic and international students. Even with the recent tuition hike, there has been no discussion of differential fees. By raising tuition fees for international students, it would be possible to expand the scope of tuition exemptions.

In the increasingly globalized field of university education, how can the University of Tokyo survive? The University of Tokyo needs to reconsider its value proposition. Its primary mission is to educate students. To recruit excellent students from around the world, it must secure excellent faculty, which requires money. If top students and faculty gather, the research level will naturally improve.

To survive, the University of Tokyo must compete with top universities in the West and China, not rely on government support. It must reform its organization to offer attractive education.

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