Shifting demands led to collapse of Geos

Behind the bankruptcy of Geos Corp., a major operator of English-language schools, are two words whose value can be recognized in any language: time and money.

Japanese studying English are increasingly using free Internet-based programs and steering clear of the high fees and rigid scheduling of traditional language schools.

“With an abundance of choices today, things are different from the days when learning English meant attending an English-language school,” said Masato Honma, who penned the book “Eigo wa Netto Doga de Minitsukero!” (Pick up English through video on the Net).

The shift in attitude among Japanese consumers was prompted by the October 2007 collapse of Nova Corp., once the largest language school operator in Japan.

The number of students attending foreign-language schools dropped from about 827,000 in February 2006 to around 336,000 this February, according to industry ministry statistics.

The decline was particularly sharp after Nova’s failure, which exposed problems concerning unpaid wages to teachers, suspected fraud and the difficulties getting refunds for canceled contracts.

Geos’ customers could feel the same sting after the company filed for bankruptcy protection Wednesday.

“I am shocked to the point where I cannot find the words,” said a 47-year-old woman from Hasuda, Saitama Prefecture, who had just paid one year’s worth of fees for her twins.

While Geos tries to deal with its nearly 37,000 students and 335 schools,, a website offering English-language lessons for free, continues to gain in popularity.

More than 1 million users are registered with, which was set up in October 2007 and offers more than 100 programs ranging from basic skills to advanced courses.

The majority of students today at language schools are workers who need English skills for their jobs and people planning to take the Test of English for International Communication (TOEIC) to improve their job prospects amid the economic downturn.

Jun Nakagawa, a spokesman for Berlitz Japan Inc., noted that many companies have reduced their employee training budgets particularly since the collapse of Lehman Brothers triggered the global financial crisis.

Now, businesspeople with no time to attend classes at schools make up a large portion of’s students.

Nakagawa also said free services may have taken away many would-be students looking to study English to enhance their image or kill time.

“The group who learned English because ‘it would be cool if I could speak English’ has disappeared from many schools,” the official said.

The trend will likely affect the hordes of native-English speakers who came to Japan for teaching jobs.

“The age when language schools could boast an abundance of native speaking instructors has ended,” said Yukio Otsu, a professor at the Institute of Cultural and Linguistic Studies at Keio University. “Some added value such as (teaching) ways of thinking, will be required.”