The Japan Student Services Organization is in active pursuit of delinquent student loans, having filed 4,233 lawsuits in fiscal 2009 demanding repayment, as the number of borrowers defaulting on repayment continues to rise.

The number of lawsuits filed by JASSO was 2.8 times greater than in fiscal 2008, and about 70 times higher than in fiscal 2004, when the Yokohama-based independent administrative institution was founded.

JASSO was established through the unification of the Japan Scholarship Foundation and other organizations providing assistance to domestic and foreign students.

The number of people in arrears on student loan repayments is increasing, partly due to the recession, and is expected to rise further, JASSO said.

According to JASSO, in fiscal 2009 about 336,000 people failed to make payments worth a total of 79.7 billion yen (S$1.3 billion), or about 20 percent of the total amount outstanding across all JASSO student loans.

The number of borrowers who fell in arrears by three months or more was 211,000, up 28,000 from five years earlier. Those borrowers' combined debt amounted to as much as 262.9 billion yen, up 84.2 billion yen from fiscal 2004.

JASSO regards loans for which repayments have not been received for three months or more as likely to be irrecoverable.

If borrowers in arrears by a year or more ignore a reminder to make repayments, a summary court can authorize seizure of assets or other means of forcible collection by JASSO.

If borrowers object to forcible collection, their cases go to court.

JASSO filed 58 lawsuits seeking repayment in fiscal 2004, and 1,504 in fiscal 2008.

Student loan programs rely on funds borrowed from the government. In December 2006 the government's Administrative Reform Promotion Headquarters called on JASSO to improve its debt collection rate, and in June 2008, a JASSO panel proposed making greater use of the legal system.

In October, JASSO initiated action through summary courts against all borrowers who were in arrears by nine months or more. Since then, the number of lawsuits filed by JASSO has surged.

The organization plans to introduce this fiscal year a system to help borrowers avoid defaulting on their loans. Under the new system, people with annual income of 3 million yen or less who are experiencing economic difficulties will be able to have their monthly payments halved for up to 10 years.

"We can consider the circumstances [borrowers] are facing. We hope they'll contact us," a JASSO official said.

Masayuki Kobayashi, a University of Tokyo professor who specializes in the sociology of education, was a member of the panel that advised JASSO to take legal action against more borrowers.

"JASSO should discuss reducing installment amounts for those suffering economic hardship, or forgiving their debts," he said.

"However, a strong legal response is needed against shameless delinquents who don't repay loans even though they can," he said.