1. R2020 Financial Management and Achievements

(1) Development of Student Learning Environment

Under R2020 we undertook expansion and development of educational conditions in accordance with the basic objectives of educational quality enhancement, learner-centered education, and comprehensive learner support. In addition, the Co-Creation Policy that bridged R2020 and R2030 involved initiatives to respond to the learning needs of diverse students, including the appointment of international coordinators, establishment of the SSP, and expansion of financial aid scholarships. These initiatives have been followed through with the emergency support measures for continuity of learning during the COVID-19 pandemic, and improvements such as the provision of academic enhancement budgets for the post-COVID era, which give concrete form to the ideas and needs of each college and graduate school.

Below we outline achievements made in development of the faculty personnel organization and facilities and infrastructure, which are the most fundamental requisites for education and research activity. How best to utilize these fundamental resources in the various R2030 programs is a key question that is also closely connected to the idea of transforming approaches to education and research. We believe that the expansion and development initiatives undertaken during the R2020 period will provides a crucial foundation for the further advancement of academic activities and student support in the context of the more diversified modes of learning, teaching, and student life that have emerged through the COVID-19 pandemic.

(i) Enhancement of learning and teaching environments

During the R2020 period, in order to enable diverse learning by diverse students, we worked to improve the ST ratio, a fundamental element of our educational environment.

Between AY 2010 and AY 2020, the overall ST ratio, which represents the number of students per faculty member at Ritsumeikan University, decreased (improved) from 32.4 to 25.3, thanks to an increase of 286 in the number of full-time faculty and a decrease of 804 in the overall student population, comprising a decrease of 877 in the undergraduate student population and an increase of 73 in the graduate student population. This improvement in ST ratio is a prerequisite for assuring educational quality and raising students’ sense of learning and growth.

Additionally, by expanding the availability of scholarships under R2020, we were able to advance the diversification and globalization of learning in both curricular and extracurricular settings. A further expansion in financial aid scholarship programs was undertaken in AY2020, in line with the launch of the national government’s new student financial aid scheme. In AY 2010, 1,582 students were receiving scholarships to the value of 700 million yen; in AY 2020, these figures had risen by 994 students and 800 million yen, to a total of 2,576 students and 1.5 billion yen. These developments have played a major role in supporting and realizing diverse learning and creation of an environment in which students have the security they need to continue their studies.

(ii) Development of campus environments

During the R2020 period we pursued a variety of campus development projects to make learning and campus life more comfortable.

Thanks to projects such as the AY 2015 establishment of OIC and the development of learning commons such as BBP, campus facility space per student increased by 5.2 m² over the decade beginning AY 2010. This represents a significant improvement in the environment and conditions for learning, exchange, and student activities.

(2) Revenue Diversification and Cost Saving Initiatives

The strengthening of revenue streams other than student fees, the streamlining of operations and the pursuit cost-cutting initiatives were positioned as top-priority issues under R2020, and we worked on financial management initiatives that would sustain and improve educational conditions while avoiding higher reliance on student fees as far as possible.

(i) Strengthening of revenue other than student fees

In order to strengthen revenue other than student fees, we pursued priority initiatives in donations fundraising and asset management. In the area of donations, major gifts from alumni enabled the construction of the Hirai Kaichiro Memorial Library at KIC (AY 2015) and the Wakebayashi International Plaza (dormitory and exchange center) at OIC (AY 2019). Efforts such as fundraising activities for the Future Human Resources Development Fund in collaboration with the Alumni Association yielded an increase in ongoing donations from alumni and other individual donors. In the area of asset management, too, we have been able to secure high levels of revenue in comparison with other universities. Moreover, partnerships and cooperation with industry, government, academia, and the local community have enabled us to secure a wide variety of external funding including competitive government grants and research commissions. We also obtained financial support from local government authorities for the establishment of OIC.

Consequently, revenue from student fees a proportion of overall revenue (the “student fee ratio”) has declined from 75.9% in AY 2010 to 73.1% in AY 2020.

Diversification of Revenue is Driving Down the Student Fee Ratio(1) (down 2.8% AY 2010-2020)

(ii) Cost savings / expenditure reviews

One other challenge for financial management “corresponding with the burden of tuition” is the pursuit of cost savings. To reduce costs, we have undertaken repeated reviews of contract pricing, content, and methods with a focus on operational outsourcing costs, which account for a major portion of ongoing general (non-academic) expenditure. As a result, we have curbed expenditure on campus management and utilities by around 1.9 billion yen, enabling us to absorb the increased expenditure resulting from the development of new campuses and facilities over the R2020 period.

Over the same period, however, we have faced considerable expenditure growth pressure, resulting from factors such as two separate increases in the consumption tax rate, the global rise in energy and materials costs, and exchange rate fluctuation. We will sustain our cost-saving efforts in on an ongoing basis rather than approaching cost-cutting as a limited-term initiative, but it is nonetheless important to be aware of the potential for these changes in wider society to have a considerable impact on the Academy’s fundamental financial position.

Cost Reduction Efforts Make Progress Year on Year, Despite Strong Upward Pressure on Expenditure due to Social Conditions, etc.

(3) Achievements of R2020 Financial Management

Enhancing educational conditions inevitably demands extra expenditure, but we were able to complete the initiatives to develop the learning environment and expand comprehensive support during the R2020 period without needing to revise tuition levels (apart from the revisions linked to rises in the consumer price index and reduction of admission fee levels).

Nonetheless, Academy finances are being impacted significantly by changes in societal conditions and government policies beyond the control of any single university, such as the decline in student fees resulting from stricter administration of admission quotas in accordance with MEXT policy, consumption tax rate increases, rising energy costs, and increasing personnel costs resulting from revised social insurance premium levels.

Backed by these trends, when viewed year-on-year, there has been a major decrease in the academic activities balance, which is calculated by subtracting educational activities expenditure—which includes personnel expenses, education/research activity expenses, and the like—from educational activities revenue—which includes student fees, government subsidies, and the like. The academic activities balance is the primary indicator of the balance of revenue and expenditure in the university’s primary sphere of activity.

The financial management policy for the second half of R2020 aims to maintain and secure a positive balance of ordinary revenue and expenditure, which is calculated by adding revenue from sources such as asset management to the academic activities balance. We have been able to achieve this aim by a narrow margin in AY 2020 despite the large-scale emergency expenditure related to the COVID-19 pandemic, as a result of securing a considerable degree of revenue from asset management. However, we can barely sustain this performance as finances are extremely stretched, even as we continue our efforts to diversify revenue other than student fees and reduce costs.

The most essential goal of financial management is to advance the R2020 Challenge Design while maintaining and securing the educational conditions currently in place. The financial foundation underpinning this sustainability of academic development is the academic activities balance: the most significant financial management challenge in R2030 will be to maintain a healthy balance and prevent it from worsening.

NEXT: Chapter III2. Continuity of Learning in the COVID-19 Pandemic