HESPs and familialism

This article traces HESP reconstruction and the related justification practices. Specifically, we analyse how the restructuring of the National Student Loan (NSL) systems in Korea and Japan has been discussed in parliament. According to Garritzmann (Reference Garritzmann2016), the NSL systems in both countries have remained almost unchanged as the only HESPs of high tuition–low subsidy regimes since the postwar period. He elucidated the policy-making mechanism from the sequence and duration of different political parties in office based on the time-sensitive partisan theory. However, both countries’ NSL systems have expanded and been heavily restructured since the late 1990s (Park, Reference Park2019). Thus, this article scrutinises the discussions about the HESPs regarding the NSL systems that have occurred in parliament since the 2000s.

In particular, we analyse the transformation of the HESPs in Korea and Japan with a focus on how familialism is embedded in the HESPs and how this familialism has changed. Familialism is the idea that the family should be responsible for its members’ welfare regarding income distribution and care provision. Theoretically, familialism was introduced in addition to conservatism, liberalism, and social democracy as a new type of welfare regime to characterise the welfare state in the Southern European region and the emerging East Asian welfare states (Esping-Andersen, Reference Esping-Andersen2009). Especially in East Asia, political, economic, and demographic modernisation as a precondition for the welfare state occurred in a compressed manner over a short period, forcing the formation of social policies in a way that accommodates familialism (Ochiai and Molony, Reference Ochiai and Molony2008; Ochiai, Reference Ochiai2010). The persistence of such strong familialism and the diversity of its development may also characterise the rapid reforms of HESPs made since the 2000s.

To distinguish whether HESPs treat young people in East Asia in a familialistic manner, we introduce three analytical scopes to reveal its diversity – namely, target groups, the position of youth, and the problem/aim, reconstructing the previous analytical methodologies used to identify different trends in youth policies (Wallace and Bendit, Reference Wallace and Bendit2009; Chevalier, Reference Chevalier2015).

First, the ‘target groups’ of HESPs are generally separated into three categories: the ‘whole generation of youth,’ ‘disadvantaged youth’ and the ‘specialized group of youth’ (Wallace and Bendit, Reference Wallace and Bendit2009). If the NSL system is accessible to all those who want to enter higher education, regardless of their grades or income, then the target of the NSL system will be the whole generation of youth. Conversely, if the target is disadvantaged youth, then certain groups, such as those from rural areas and low-income groups, are expected to be the main target group. When the users of the NSL system are those with special abilities, such as those with excellent grades, the target group becomes the specialised group of youth. This distinction by target group is a criterion for measuring familialistic tendencies, depending on whether one targets the household to which a youth belongs or the individual directly. In Korea and Japan, the target of the NSL systems tended to be families of a specialised group before the 2000s.

Second, the position of youth – whether those in the position of youth should be considered children or adults – is significant in changing the direction of a HESP. When young people are considered children, the family is responsible for supporting the education of the young people, and the NSL system sets the income of their parents (family) as a criterion for screening the usage and the interest rate. Conversely, if young people are considered adults, they can use the NSL system regardless of their parents’ (family’s) income. In both Korea and Japan, the position of youth in the NSL system has long been understood as that of children under the protection of their families, and the availability of the NSL system and its interest rates was ultimately determined by family income before the 2000s. However, we expect that this condition has transformed drastically and that both countries have experienced some reform of familialism in regard to their HESP.

Last, problem/aim refers to the focus on the significant problem and aim of the NSL system. In Korea and Japan, equality of opportunity, the debt delinquency problem and the burden of tuition fees have been highlighted as fundamental problems surrounding the NSL system since the 2000s. As with global trends, the main aim has been to reduce the burden of paying for higher education (Callender and Jackson, Reference Callender and Jackson2005; Czarnecki et al., Reference Czarnecki, Korpi and Nelson2021). However, a more discursive and ideational analysis is also required to understand how these major problems/aims were regarded as relevant policy agendas and how they changed in East Asia through the discursive process of policy-making in parliament.

The case of Korea

Korea has a presidential system, and a new National Assembly is formed every four years. Thus, the period from 2000 to 2020 was divided into five periods for analysis (the Conservative Party was the ruling party from 2008 to 2017, whereas the Liberal Party was the ruling party for the rest of the period).

First, from 2000 to 2004, several statements were made in the National Assembly about the rising tuition fees, and the main issue of discussion was that the NSL system did not adequately respond to the current situation. During this period, the NSL system was operated by a secondary supplementary formula, in which tuition fees were lent at a low interest rate through private financial institutions and the government compensated for a portion of the interest amount. Notably, the statements of National Assembly members strongly criticised the fact that the interest rate of the NSL was higher than that of private student loans of financial institutions. Several statements reflected such a concern regarding the operating conditions of the NSL;Footnote ² these concerns were shared by both the ruling and opposition parties.

During this period, it was normal for parents to pay for students’ tuition fees and living expenses; politicians often mentioned the suffering of parents rather than students. Furthermore, the NSL system required a joint guarantor, and the loan amount did not include expenses other than tuition fees, thereby making it difficult for students to enter college without family support, even if they used the NSL system. Thus, the position of youth in this period was to be treated as if they were children under the protection of their families. Additionally, the main aim of this period was to guarantee equal opportunities for higher education by lowering the interest rate and increasing the loan amount, and the disadvantaged groups (low-income families and students from rural/remote areas) were still the main targets.

From 2004 to 2008, tuition fees continued to rise, and the issue of tuition fees became a social problem.Footnote ³ Politicians also began to pay attention to this issue and mentioned media reports such as ‘parents committing suicide’Footnote ⁴ and ‘parents engaging in illegal activities such as organ trafficking’Footnote ⁵ to pay for their children’s tuition. Because of this situation, the debate in the National Assembly on the expansion of the HESP, such as through the ‘reduction of tuition fees’, ‘post-payment of tuition fees’ and ‘limiting the rate of tuition increase’, was progressing in a more specific direction.Footnote ⁶ Particularly, to reflect public opinion, the opposition party made a campaign promise of ‘half-price tuition’ and actively promoted the expansion of the HESP.Footnote ⁷ Although these discourses came from the opposition party, the ruling party also recognised the necessity of expanding the HESP in response to popular opinion, which means that the main objective during this period was to relieve the burden imposed by tuition fees.

Consequently, the government started running the NSL system directly, and the guarantor system was abolished in 2005. Additionally, lending decisions fell to the government and colleges instead of to financial institutions, and the selection process became less strict. Above all, the system was improved to allow various reasons for loans, to increase the amount that can be loaned (depending on one’s major, etc.) and to lengthen the loan period/redemption period (freely selectable). Thus, active discussions in the National Assembly affected the reform of the NSL system, and the position of youth changed from being seen as children under the protection of their families to adults who are generally considered independent of their families. However, the NSL system remained targeted only at low-income families without undergoing any expansion.

Furthermore, the period from 2008 to 2012 was characterised by a growing number of social movements, especially among students, calling for the expansion of the HESP (Shin et al., Reference Shin, Kim and Jeong2018). In this period, the government’s main aim was to respond to students’ demands and fulfil its own campaign of ‘half-price tuition’; the establishment of the new NSL system called KOSAF (Korea Student Aid Foundation) in 2009 was the most important policy to enforce such aims. Simultaneously, the ruling party argued in the National Assembly that KOSAF could essentially cut the burden of paying for higher education imposed on students in half through the introduction of the income-contingent loan (ICL) system and grant-type scholarships.

However, while both parties shared a common opinion on expanding the HESP to respond to public opinion, they disagreed on whether it would be sufficient to establish a KOSAF.Footnote ⁸ Especially in 2011, when social movements led to large demonstrations, politicians from the opposition party who participated in these demonstrations brought students’ opinions on the issue of tuition fees directly to the National Assembly for further discussion. Here, the intention was to justify the further expansion of the HESP by listening to the opinions of the people (students). However, since the global financial crisis in 2007, both low- and middle-income families have suffered economic hardships; thus, there has been a demand for a significant loosening of standards on the income level required to qualify for student loans and the expansion of the HESP to include middle-income families.Footnote ⁹

Consequently, there were repeated revisions and expansions of the NSL system, especially the ICL system. Discussions in the National Assembly began to fully reflect the opinions of students (social movements) and social conditions (the worsening economic situation of middle-income families), and youth were repositioned as adults who would take responsibility for their own higher education. Additionally, the target of the NSL system became more comprehensive, including both low- and middle-income families. These institutional changes suggest that the target group was extended to include the whole generation of young people.

From 2012 to 2016, the implementation of ‘half-price tuition’ continued to be a key issue in the National Assembly. The ruling party was initially reluctant to respond to opposition parties who questioned the fact that tuition fees had not actually decreased.Footnote ¹⁰ Although the HESP had been expanded, it remained insufficient; therefore, the aim of this period was to develop more sustainable and innovative policies.Footnote ¹¹

Additionally, the public amount of attention given to the situation of young people suffering from tuition problems did not abate. Media reports were mentioned often in the National Assembly – for example, the case of ‘college students committing suicide’ and ‘students suffering from student loan repayments’Footnote ¹² because of the burden of paying tuition fees. The opposition parties began to focus more on youth support policies. Particularly, by discussing the issue of the HESP together with other welfare policies such as free school lunches, the opposition party attempted to get the support of the public for expanding welfare policies.Footnote ¹³ In response, the ruling party changed its passive stance, and with the presidential election coming up, it once again pledged to implement ‘half-price tuition’.

Such competition between the two parties over policies supporting young people prompted the expansion of the HESP from 2012 to 2015, and the NSL system was more universally restructured as the youth support system. In 2015, the qualifications for using the NSL system were eliminated, making the HESP available to any young people (subject to an age limit) who wanted to pursue education. Since 2015, the interest rate has been the same for both low-income and middle-income borrowers. In short, the target group has become the whole generation of young people. Additionally, the scale of grant-type scholarships has continued to expand, and the ratio of higher education expenses shouldered by the people to GDP in Korea decreased significantly from 1.9 in 2010 to 0.9 in 2015 (OECD, 2016). This means that the government is becoming the main actor in supporting higher education for young people and that the position of youth has completely shifted away from being treated as children under the care of their families.

Finally, during the period 2016 to 2020, the debate on the HESP stopped in the National Assembly. Nevertheless, the main aim remained the same – that is, to reduce the burden on students – and there were still debates over whether ‘half-price tuition’ had been achieved. There were also calls for more progressive policies, such as the demand to eliminate interest to relieve the burden on young people. In response to such a request, student loan interest rates continued to be adjusted, dropping from 7.05 per cent in 2006 to 2.0 per cent in 2020. Meanwhile, there has been no change in the position of the youth and target groups.

The case of Japan

Japan has a parliamentary cabinet system, and for a long time, the ruling party has been led by a conservative coalition of the Liberal Democratic Party (LDP) and the Komeito. Although there was a change in government in 2008, there were no major differences in attitudes toward the HESP before and after the change in government. Thus, for ease of analysis, the period from 2000 to 2020 will be divided into five periods, as previously shown in the case of Korea.

First, from 2000 to 2004, the focus of the discussions in the Diet was mainly on the privatisation of the NSL system. Several statements pointed out the need for efficiency and transparency in the Student Loan Association (Ikuēkai), which ran the NSL system at that time. This was connected to the privatisation of public services by the Koizumi Cabinet, which had been strongly promoting the privatisation of Japan Post Co. Ltd. and other public services from the late 1990s to the 2000s (Kim and Huang, Reference Kim, Huang and Taghisadeh-Hesary2021). It also called for the reform of the NSL system to require students to be self-reliant (jikosekinin) and to self-invest (jikotousi) to reduce the attendant burden on parents.Footnote ¹⁴

Ultimately, the Kibo 21 Plan was implemented; it greatly relaxed the grade and family income requirements in the NSL system and expanded the recruitment quota, whereas the repayment exemption program, which had been offered to those working in education, was reduced or eliminated (POSSE, 2016). Thus, the government’s main aim during this period was to rationalise the NSL system; however, it encouraged students to become more independent, and it positioned young people effectively as children under the protection of their families because the reason for the reform was to reduce the burden on their parents. Additionally, the target group changed slightly from the specialised group of young people – high-achieving students – to the disadvantaged groups – motivated and qualified low-income students.Footnote ¹⁵

In the period from 2004 to 2008, the high interest and delinquency problems of the NSL system became the main issue. Particularly, in 2006, when the Koizumi Cabinet’s ‘structural reform’ included statements such as ‘eliminating the 3 per cent cap on the interest rate on the NSL system’, many politicians started expressing their opinions against the NSL system.Footnote ¹⁶ There was an emphasis on the fact that the NSL system was an educational institution, not a financial institution, and there was concern that privatisation would weaken the NSL system’s role as a youth support policy.Footnote ¹⁷ Thus, there is a tendency to resist neoliberal reforms that simply regard students as consumers.

Notably, HESPs, including the NSL system, have already been positioned by the government as part of its strategy of addressing the issue of the declining birth rate. Their main aim is to reduce the burden of higher education linked to having children by expanding HESPs. There has been a distinct move made to promote the NSL system in the Diet as a policy to reduce the burden on parents, along with the children’s’ allowance, and to justify the expansion of the NSL system as a strategy to equalise opportunities for low-income families and address the declining birth rate.

At this time, young people were still treated like children, and the target was disadvantaged groups – mainly low-income families – although the interest-bearing and institutional guarantee programs had expanded their coverage.

From 2008 to 2012, delinquency became more serious, and the burden on college students, not their parents, was discussed in the Diet.Footnote ¹⁸ While referring to the situation described in the media, especially by opposition parties, as being characterised by ‘high tuition fees making life harder for students’,Footnote ¹⁹ politicians considered HESPs as groups of ‘college students’ problems’ rather than as a burden placed on families or an issue of equality in educational opportunity. Thus, the direction of the discussion on the delinquency problem gradually shifted from issues related to the moral hazards of students, and the main aim became solving the delinquency problem by strengthening repayment processes. Additionally, from 2008 onward, the NSL system started to implement the so-called blacklist program, which registers information on those who were delinquent for more than three months, with their personal credit agency and the continued implementation of other programs that strongly demanded responsibility from young people (POSSE, 2016).

This means that the Diet’s discussion focusing on students rather than parents who suffer from repayments and the NSL system strongly demanded responsibility from the users (the young people) rather than their family (parents), indicating that the position of youth had shifted away from that of being treated as children to adults who must take responsibility for their own education expenses. However, the target group remained low-income families, and there was no move to expand the target.

The period from 2012 to 2016 was characterised by an increase in mentions of harsh repayment methods and social circumstances, with terms such as ‘ruthless repayments’Footnote ²⁰ and ‘debt hell,’Footnote ²¹ present in the Diet; the interest in young people struggling to repay their student loans increased. The main aim was also revised to relieve student burdens instead of demanding strong self-responsibility; furthermore, various programs of repayment began to be relaxed in 2014. Notably, the activities of lawyers supporting students suffering from delinquent loans and the discourses in social movements such as black student loans were also mentioned in the Diet.Footnote ²² Thus far, there has been no mention of action taking place in the Diet by actors other than bureaucrats and experts (scholars), such as NPOs, who play a significant role in advocating and supporting activities to help young people.

Additionally, starting in this period, the NSL system began to be more strongly discussed as an issue for the younger generation (students) than for the older generation (parents). Comments such as ‘We need to expand the NSL system as social security for youth’Footnote ²³ ; ‘Student loans are not only applicable for low-income families but also extend to middle-income families’Footnote ²⁴ and ‘We need grant-type scholarships, and Japan is the only country in the OECD that does not have such scholarships’Footnote ²⁵ were expressed in the Diet, thereby calling for a more inclusive strategy to support youth.

Nevertheless, there was a significant difference in opinion between the ruling and opposition parties on ideas regarding an inclusive strategy. The only policy that gained consensus from both parties was the establishment of a grant-type scholarship as an expansion of support for low-income families. Additionally, the eligibility rule (grades) was made less strict from the previous requirement of ‘those who are willing and qualified’ to receive grant-type scholarships. However, it remained selective in terms of who was eligible for support, saying that help should only be given to ‘those who truly needed public assistance’.Footnote ²⁶ The NSL system implemented various mitigating policies regarding repayment, such as deferring or reducing the amount of repayment for low-income families from 2014, and preparations were made for the adoption of grant-type scholarships and an ICL system for low-income families. This implies that there is still no consensus within the whole generation of young people as to the target of support, and only the disadvantaged groups are considered the target group who deserve support.

Thus, the position of youth in this period remained the same as that seen in the previous period; as for the target group, although there were arguments on the part of social movements and opposition parties that all young people should be targeted more widely, the government could not be persuaded, and low-income families remained the only target.

From 2016 to 2020, there were significant changes made in the NSL system, beginning with the implementation of grant-type scholarships and the ICL system for low-income students in 2017. Looking at the statements in the Diet, remarks that attempted to position the expansion of the NSL system as a social investment rather than a welfare policy stand out: ‘We want to make the NSL system not just a welfare policy, but a system where people can be proud of getting loans’,Footnote ²⁷ ‘contributing to society in the future’Footnote ²⁸ and ‘it is important to consider education as an investment in the future’.Footnote ²⁹ These statements are in harmony with the campaign of the ruling party to justify the expansion of youth support as a strategy to counter the declining birth rate; however, it is different from the situation in Korea, where the NSL system is positioned as a welfare policy.

It was also during this period that discussions about the issue of free higher education began to take place. As in the case of grant-type scholarships, this issue was also fiercely debated between the ruling and the opposition parties. The ruling party argued that free education should be limited to a few low-income families, saying they should be ‘ensuring that free higher education is provided only to children who truly need it’Footnote ³⁰ to which the opposition countered, ‘By the word ‘truly,’ I think you mean selectively, not for all low-income people, so why not for all?’Footnote ³¹

Consequently, a twofold support system was finally established: support for low-income families was provided from the new system for supporting the study of higher education, which either exempts or reduces tuition fees and provides grants, and support for everyone else continued to be provided through the NSL system. Thus, although the overall target of the HESP has been expanded, it has now been effectively divided into low- and middle-income families – each of which is given a different type of support. Additionally, because the main criterion of classification is household income, young people are still closer to being treated as children and not adults, and the traditional way of supporting them through their families is maintained.