Introduction | Why is local government support for scholarship repayment attracting attention now?
In recent years, Japan has seen a surge in population movement, including "U-turns" (young people returning to rural areas after graduating from university) and "I-turns" (people returning to Japan from other countries). On the other hand, companies are struggling to secure talented personnel, and many industries have high employee turnover rates despite offering high salaries.
Against this backdrop, a new support system is expanding through collaboration between local governments and companies. This is the movement to "support the repayment of scholarships by company employees." By combining this with the "proxy repayment system" established by the Japan Student Services Organization (JASSO) in 2021, companies can hire students who are obligated to repay their scholarships, and the company will bear part or all of the remaining repayment amount.
This article will explain in detail why this system is attracting attention, what specific initiatives and effects it has had, and the benefits for companies, local governments, employees, and young people. It will also be useful information for those involved in regional revitalization and talent acquisition, as well as university students and graduates.
What is local government support for scholarship repayment? The "proxy repayment" system is expanding through collaboration between JASSO and companies.
The central role in student support in JapanJapan Student Services Organization (JASSO)Those who receive scholarships are obligated to repay part or all of the loaned amount. In particular, young people living in rural areas face a heavy burden of scholarship repayment due to low wage levels.
Therefore, the "proxy repayment system," established in fiscal year 2021, was launched. This system allows companies to directly remit funds to JASSO on behalf of their employees (employees who repay scholarships). As of the end of January 2026, the number of companies using the system had expanded to 4,614, and it has been confirmed that it is having a significant effect on regional revitalization and job creation.
Specific details of the "proxy repayment system"
- Direct transfer to JASSO:Companies can send part or all of the remaining balance of their employees' scholarships to JASSO.
- Example of refund amount:The average total loan amount is approximately 3.23 million yen, and the average repayment period is 15 years.
- Target students:Students who received scholarships while enrolled at university using JASSO
- Benefits for businesses:Addressing labor shortages and securing talented personnel
- Benefits for young people:Reducing financial burden, supporting settlement in the local area.
- Benefits for local governments:Promoting U-turns and I-turns, and regional revitalization.
This system is creating a chain reaction where companies support repayment, and those companies themselves receive support from local governments. It's almost as if student loan repayment can be viewed as a "corporate employee benefit program."
Examples of initiatives by local governments and specific support measures | Why are local governments participating?
In addition to JASSO's proxy repayment system, local governments are increasingly implementing their own scholarship repayment support programs. This is not simply about utilizing existing systems, but is based on a clear objective: "If young people settle in their local areas, it will lead to regional revitalization."
Akita Prefecture's initiative: "Akita Corporate Partnership Scholarship Repayment Assistance Program"”
Akita Prefecture launched this system in fiscal year 2024. Its distinguishing feature is that it targets employees who are repaying their scholarships, and the prefecture and companies jointly provide support.
- Grant amount:Up to 200,000 yen per person per year.
- Target company:People who joined a company that is registered with a scholarship repayment program.
- Number of currently registered companies:Approximately 135 companies
Aster, headquartered in Yokote City, Akita Prefecture, is a noteworthy company in the research, development, and manufacturing of high-performance motors. Although it has been struggling to recruit new graduates and currently has no employees joining in the spring of 2026, the company announced that it is preparing to utilize this system, stating that "creating industries and engaging in business in the region, and employing local people are important."
Nosegawa Village, Nara Prefecture | A small municipality with a population of approximately 300 people is also participating.
Particularly striking is Nosegawa Village in Nara Prefecture, with a population of approximately 300 people. Struggling to recruit staff, the village established the "Guidelines for Support Funds for the Repayment of Scholarships for Village Employees" in November 2025 in order to secure new graduates.
- Grant details:If a student who has received a scholarship is accepted, the village will subsidize half of their monthly repayment amount for 10 years.
- Maximum grant amount:None (varies depending on the repayment burden)
- Residency requirements:They don't have to be from the same village.
Mayor Yoshitsugu Yoshii is enthusiastic about "attracting talented individuals with new ideas through flagship policies," and is taking proactive measures despite the small population size. In this way, local government scholarship repayment support is being used as a tool to "attract young people regardless of population size" and "to secure employment."
Saga Prefecture | Subsidies for companies that handle repayment on behalf of others
Saga Prefecture will launch a scholarship repayment support program in fiscal year 2025. It will provide subsidies to companies that handle repayment on behalf of JASSO (Japan Student Services Organization). Considering the reality that "salary levels are low in rural areas, and young employees such as new graduates feel a heavy burden of repayment," the prefecture has stated that "there is great significance in taking on this initiative in rural areas."
Supplementary Information and Points to Note | Voices from Scholarship Banks and Experts
New services are emerging in response to the actions of local governments and companies. Active & Company, a human resources and organizational consulting firm, fully launched a service called "Scholarship Bank" in March 2024.
Features of the "Scholarship Bank"
- structure:When people using JASSO are looking for a job or changing jobs, they are introduced to job openings from companies participating in the service.
- Proxy return:For the first three years after joining the company, 10,000 yen will be repaid to JASSO each month on your behalf.
- Funding source:A portion of the recruitment fees will be used as the source of funds.
- Number of participating companies:Approximately 300 companies
Kyowa Kiden Kogyo, located in Nagasaki City, has been participating in this scholarship bank since 2026. In response to the challenge that "recently, each department has only been able to hire about half the number of people they want," the company says, "We want to let many students know about our company through the scholarship bank, and for our new graduate recruitment in 2027, we want to attract talent from all over the country."
Expert Opinions | Advantages and Challenges
Seiko Kojima, a part-time lecturer at Musashino University, states that "support for scholarship repayment will encourage people to find employment in regional areas." At the same time, she adds that "to retain employees after hiring, it is also necessary to devise ways to foster loyalty through interactions within the organization."
This is an important point. It suggests that it's essential not only to reduce the financial burden, but also to create an environment where employees want to stay with the company for the long term.
Summary | A new system that achieves a "win-win-win" situation for regional revitalization and talent acquisition.
The scholarship repayment support program, which is expanding through collaboration between local governments and companies, is a system that harmonizes three elements: "retaining young people in rural areas," "securing employment," and "reducing financial burden." Since each element has different benefits, it can be called a "win-win-win" situation.
Value for a company
This allows companies to secure top talent. Even with lower salary levels, student loan repayment support reduces the risk of employee turnover and improves retention rates. This support has been confirmed to be a particularly important tool in recruitment efforts in rural areas.
Value for local governments
Promoting U-turns and I-turns (returning to one's hometown or moving to a rural area) is an effective measure against declining regional populations. In areas with lower wage levels, young people feel a greater burden of repayment, making the use of such systems particularly meaningful.
Value for employees and young people
Reducing the financial burden makes early repayment possible. It makes living in the local area easier, leading to settlement. In particular, linking it with initiatives aimed at regional revitalization creates a sense of contributing to the local community.
New ideas in the workplace
This initiative to support the repayment of student loans is not merely a systemic issue. More importantly, it fosters hope and confidence in the future for working people. Instead of young people harboring anxieties about the future, a relationship of trust is being built where they know society will support them.
For businesses, it's a solution to the problem of "labor shortages." For local governments, it's a countermeasure against "declining regional populations." For young people, it lowers the "barriers to working in rural areas." Problems that should be viewed from different perspectives are solved within a single system. This can truly be called "a new way of thinking about work."
Each worker must not only strive to forge their own future, but also be aware of the need to utilize social systems and local support. At the same time, it is important to shift the perspective from simply receiving to considering "what kind of cooperative relationships can be built."
The term "regional revitalization" is frequently used, but for it to go beyond being a mere slogan and actually function as a place where people live, such meticulous considerations are necessary. Not only wage levels, but concrete systems like loan repayment support will surely leave a lasting impression on workers.
Ultimately, it's about having the conviction that "you can work wherever you want" and "you can design your own life." That's the path to simultaneously achieving regional revitalization, securing talent for companies, and the happiness of workers.
