That this is news--that someone is suddenly realizing this, or realizing it's newsworthy--is surprising.
At my school (lower end of the scale--small, private, bottom-ranked, well outside of kanto/kansai), this was at least mentioned/discussed back in the 90s. Back then, since it was a 'fall back' school for applicants who didn't make it into their first choice of schools, the ratio of applicants to acceptees was quite high, something like 10:1. (and this was a significant revenue stream due to application fees)
The situation is now different, and almost everyone who applies is accepted. And there are non-traditional entry paths (no test, instead show some other achievement such as sports, speech contest, eiken/TOEIC score, etc). The school also lowered tuition, and tried reorganizing/renaming departments and 'revitalizing' curriculums to increase appeal. And this is as of at least 8 years ago, when I retired. Schools with attached secondary schools (high schools and maybe JHS) use those to fortify their applicant pool early on (like an economic 'moat'), assuring parents that once into their system, later uni admission is all but guaranteed.
My school also controlled costs, mostly salaries. Bonuses became optional, and were reduced from multiple months to fractions of a month (tho that later returned to ~3 months/yr). The salary chart (in the 規則) was revised so that any new hire started lower, and stayed lower forever (also any severance/退職金 became far less generous). And tho the salaries of legacy hires couldn't be reduced (many 正社員 as both faculty and admin), yearly raises became trivial. My last years there I got maybe a ¥500/month raise. Other things that were once paid extra, some kind of 手当金, became unpaid and just a part of the normal workload. I did entrance exam writing for a number of years, which was very lucrative until it wasn't. Supplemental tutoring during breaks, once paid extra, then wasn't. (These, along with comments like, "list it on your self-evaluation, 自己評価, and we'll consider it when deciding bonuses.")
The ministry in charge, 文科省, has control over how many students a school can accept. This prevents cutthroat competition among schools in an area, which might cause too-rapid a change in one or another school's numbers of matriculating students. The pain of declining numbers is spread equally.
Tho it has been shut down now, my school developed a 2+2 system with chinese universities. By sharing/inviting faculty from those schools, students could come to study and get two degrees after four years--one from their chinese uni, and one from ours. Our school was also an early host of a Confucius institute, and (leaving aside the issues there), there was some extra government money for 'internationalizing', besides all the extra tuition-paying students (their side funded by the chinese govt). I taught some classes for these students, who could take elective english classes in their 4th year once they'd passed N1. Interesting, since they were all great students, also culturally/behaviorally different than Japanese, and also brought me (in a sense) full circle, since in the early 80s I'd spent a year teaching in beijing.
www.newsweek.com
www.japantimes.co.jp
