The Finance Ministry considers it inappropriate to make higher education in Japan free without exception, informed sources said.

The ministry now believes the proposed program, as part of Prime Minister Shinzo Abe's initiative to support child-rearing families and cut tuition to zero, should screen eligible institutions and students, the sources said.

Otherwise, Japan's fiscal health, will deteriorate even further amid its ever-growing social security costs, they explained.

Also, the ministry cannot give the nod because any indiscriminate tuition-free program could end up becoming mere financial aid for private universities and colleges hit hard by the declining birthrate, the sources said.