A growing number of Japanese companies now offer student loan support to their employees. A special loan payment system introduced in fiscal 2021 allows both parties to lower their tax burden. Consequently, firms aim to secure talented individuals in a competitive labor market. Young employees struggling with rising prices and higher interest rates benefit the most.
Yuta Hashimura, 29, borrowed ¥2.8 million for his college education. He had to repay about ¥20,000 every month. Hashimura joined Silver Life Co., a Tokyo meal delivery service, in 2019. During his third year, Silver Life launched a student loan support program. Furthermore, the program fully covers employee loan payments over seven years. The company has shouldered about ¥40 million in total loans for roughly 40 employees. Arisa Izumi, a human resources manager, wants employees to feel secure and work long term.
Moreover, the Japan Student Services Organization administers the national financial aid program. In fiscal 2024, roughly 1.15 million students utilized some form of financial aid. About 620,000 of those students took out interest bearing loans. The typical total loan amount reaches ¥3.36 million per student. Repaying these loans usually takes about 17 years on average.
A fixed rate loan jumped to 2.42 percent in March of this year. That rate stood at just 0.07 percent in March 2020. Therefore, a ¥3.36 million loan would require ¥4.23 million in total repayments today. The same loan would cost only ¥3.38 million based on the 2020 rate.
In fiscal 2021, JASSO established a system for employer loan payments. Before this system, companies added support to employee salaries directly. That approach increased workers’ income taxes substantially. Using the JASSO system allows companies to write off the amounts instead. This reduces corporate tax burdens while also cutting employee taxes. Major security provider Alsok Co. introduced the program in 2024. The company pays up to ¥1.08 million per person over five years.
Local governments have also adopted similar student loan support measures. The Yamagata prefectural government pays up to ¥1.248 million to eligible individuals. Recipients must live and work in the prefecture for at least five years after graduation. According to a Cabinet Secretariat survey, all 47 prefectures now offer such programs. Furthermore, 876 municipalities had introduced similar measures as of June 2025.
JASSO reported 320 payment system cases in fiscal 2021 involving companies or local governments. That number jumped to 4,852 cases in fiscal 2025. About 26,000 employees have received this financial support to date. A Mynavi Corp. survey found that 22 percent of recent graduates said loan payment programs affected their employer choice. One woman in the survey applied only to companies with student loan support.
