Introduction
In recent years, higher education institutions around the world have faced increasing financial difficulties as mentioned in TORONTO STAR(2025/4/27). As a response, many have turned to the international student market as a critical source of revenue. Tuition fees paid by international students have become a vital pillar of university finances. While this strategy can offer short-term financial stability, it also carries significant risks and challenges in the medium and long term. This paper examines international case studies to shed light on these issues and then explores the current situation in Japan.
The Reality and Issues of International Student Dependency in Other Countries
United States
The United States has long been the world’s leading host of international students. Particularly in state universities, declining public subsidies have prompted institutions to rely increasingly on international students who pay higher tuition fees. Schools like the University of California, Berkeley, and the University of Michigan allocate a substantial portion of admissions to non-resident students, with international tuition forming a growing share of their income.
However, this strategy has sparked concerns regarding educational equity. Low-income domestic students face reduced access, and critics argue that universities are becoming more like “global businesses” than public institutions of learning. During the Trump administration, stricter immigration policies and pandemic-related visa suspensions caused a sharp decline in international student numbers, leading to financial losses for many universities. This exposed the vulnerability of relying too heavily on international students.
Australia
Australia is another country where higher education institutions rely significantly on tuition income from international students. At major universities like the University of Sydney and Monash University, international students account for 30–40% or more of total revenue. The Australian government even regards international education as a form of “export industry,” contributing to national economic growth.
However, when the COVID-19 pandemic led to strict border closures, the intake of new international students dropped drastically. This resulted in universities suffering hundreds of millions of dollars in losses, prompting widespread layoffs and cuts to research programs. The more dependent a university was on international tuition, the greater the financial damage—highlighting the risks of over-reliance.
United Kingdom
In the United Kingdom, cuts to public subsidies and Brexit-related uncertainties have similarly pushed universities to seek income from international students. Prestigious institutions like Oxford and Imperial College London have actively competed to attract international applicants, with many universities becoming highly dependent on students from China—in some cases, they account for over 40% of all international students.
This has raised geopolitical concerns. If UK-China relations were to deteriorate, many universities could suffer severe financial impacts. Furthermore, when revenue takes precedence over academic merit, there are growing fears of declining academic standards and the commercialization of education.
The Current Situation in Japan
Japan, too, is witnessing increasing financial strain among universities. National universities are facing reduced government subsidies (Operational Grants), while private institutions are struggling with shrinking student populations due to the declining birthrate. Against this backdrop, the Japanese government launched the “300,000 International Students Plan” in 2008, encouraging universities to proactively accept foreign students.
As of 2022, there are about 230,000 international students in Japan, with roughly half from China, followed by Vietnam and Nepal. Many enter through language schools or vocational schools before enrolling in universities or graduate programs. Japanese universities have established scholarship programs and special entrance quotas to accommodate these students.
However, Japan is also beginning to experience problems similar to those seen abroad. One major issue is dependency on specific countries. If the number of students from China were to decline, many Japanese institutions—especially those in rural areas—would face serious financial difficulties. Moreover, some students are admitted primarily for financial reasons, despite insufficient academic preparation or Japanese proficiency. This can lead to difficulties in adapting to university life and, in some cases, dropout or absenteeism.
Another concern is the socio-economic vulnerability of international students. Financial hardship has driven some students to engage in illegal employment or even go missing, raising social and legal concerns. At the institutional level, prioritizing international student recruitment for revenue generation may compromise the quality of education and student support systems.
In particular, many smaller private universities in rural areas have come to rely heavily on international student enrollment as a means of survival. While this might keep them afloat temporarily, it is not a sustainable long-term solution.
Future Prospects and Recommendations
Moving forward, universities in Japan and elsewhere must reassess their structural dependence on international students and establish more sustainable financial foundations. Several key strategies can be proposed:
- Diversify the student base: Avoid over-reliance on students from specific countries by broadening recruitment to various regions around the world.
- Strengthen academic standards and support systems: Shift the focus from quantity to quality by investing in improved academic environments and comprehensive student support.
- Ensure balance with domestic students: Public and institutional resources should be fairly allocated so that domestic students are not disadvantaged by the emphasis on international recruitment.
- Diversify revenue streams: Beyond tuition, universities should pursue funding through research grants, industry partnerships, and philanthropic donations to stabilize their finances.
Conclusion
The acceptance of international students can be a valuable means for universities to secure funding and promote internationalization. However, over-reliance on this model brings about risks such as educational inequality, declining quality, and vulnerability to political and economic changes. Japanese universities, along with their global counterparts, must go beyond viewing international students as a financial solution and instead adopt a more balanced and long-term approach. Sustainable university management requires diversity, quality assurance, and financial resilience that does not hinge solely on international student tuition.