Regulations needed for overseas study
Written by Writer on Thursday, October 30th, 2008
Regulations needed for overseas study
Naohiro Yoshida / Yomiuri Shimbun Staff Writer
Damage caused by the bankruptcy of Gateway21 Co., a major private company that acted as an intermediary between people wishing to study abroad and host families and language schools, was exacerbated by a lack of regulations on such agents.
On Oct. 8, Gateway was notified by the Tokyo District Court of its decision to start bankruptcy proceedings against the company.
Gateway failed to remit to host families and language schools about 950 million yen collected from about 1,300 people wishing to study abroad. Instead, it used most of the money for office expenses and employees’ salaries.
Gateway’s failure has left many people in the dark as to where–or whether–they will be able to study abroad, as initially planned. The likelihood of these individuals recovering their money is slim.
A third-year vocational school student said he would have to find another job to save anew the money required to study abroad.
A company employee in his 30s said he had already submitted his resignation and begun training a colleague to take over his job in preparation for studying overseas.
According to a lawyer appointed by the court as a bankruptcy receiver, Gateway has faced problems procuring funds over the past three years or so.
The firm was collecting money from people planning to study abroad until shortly before it went belly-up. However, its business base was not particularly weak.
According to the Education, Science and Technology Ministry, about 83,000 Japanese left Japan to study at universities or language schools in 2004.
Many students are believed to have used middlemen to draw up documents and help communicate with host families before departing.
A former employee of a Japanese branch of a language school said only about 10 percent to 20 percent of students wishing to study abroad apply directly to foreign universities and language schools.
According to the National Consumer Affairs Center of Japan, in fiscal 1995, there were 119 cases in which people sought advice from the center about problems with agencies for overseas study. This figure jumped to 628 in fiscal 2007.
Most callers needed help resolving problems related to contracts, with some saying they had not received such documents, while others complained about high cancellation fees, according to the center.
Yukio Motohashi, a foreign study consultant, warned that companies in dire financial straits often ask customers to pay expenses early for studying abroad or pressure them into signing contracts quickly so the funds can be used to run their operations.
The absence of a law regulating middlemen is thought to underlie such problems. Currently, no ministry or agency supervises or oversees such agents.
Gateway had been registered with the Tokyo metropolitan government as a travel agency.
Despite having received complaints about Gateway’s handling of matters related to studying abroad, the metropolitan government did not issue improvement orders or inspect the company, saying that brokering activities for studying abroad were not subject to its regulations.
There have been some cases in which companies without expertise in the field of overseas study have attracted customers via online advertisements and failed to remit customers’ money to host language schools and families, while giving their customers fake letters of acceptance to language schools.
Further, there are no overseas-study organizations with criteria for membership so it is difficult to weed out problematic companies.
Many people trusted Gateway and signed contracts after seeing the firm’s online advertising.
An estimated 300 to 800 overseas-study middlemen operate across the country. However, the government is reluctant to rein in such companies. A Construction and Transport Ministry official said procedures for studying abroad differ from those found in the travel business.
An education ministry official said intermediary companies such as Gateway lie beyond its jurisdiction as they are not educational organizations.
Under these circumstances, it is difficult for people to find trustworthy middlemen to help them realize their dreams of studying abroad.
To prevent similar problems from reoccurring, the establishment of a legal registration system and an organization charged with regulating overseas study should be considered.
(Oct. 30, 2008)
