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The Finance Ministry is refusing to provide the funding needed to implement a new law extending compulsory education to 12th grade, the Knesset Education Committee said yesterday.

Until now, students have been allowed to drop out after 10th grade. The new law, however, requires them to stay in school two more years. Should students wish to leave before then, the government must find them an alternative educational framework.

Education Ministry Director General Shlomit Amichai told the committee that the law's implementation is being delayed because "there are no [alternative] frameworks; they need to be established. And that, of course, requires funding" - which has not been forthcoming, she said.

Amichai said the ministry has also not been given the funds to hire additional truancy officers, who are supposed to supervise the law's implementation.

In response, Finance Ministry representative Raviv Sobel said the treasury had never promised such funding.

But if the compulsory education law is being delayed, other reforms are moving forward: Next year, more than 250,000 students in some 760 schools will participate in the Ofek Hadash ("New Horizon") program, Education Minister Yuli Tamir said.

"For the first time, the education system is implementing a substantive system-wide change. This is not another pilot, implemented in a small number of schools, but a fundamental change," Tamir told a press conference in Tel Aviv.

Ofek Hadash includes teaching in small groups, measures aimed at strengthening student-teacher connections and putting more emphasis on poor and outstanding students rather than teaching strictly to the average.

According to the Education Ministry, the program has a budget for around 900,000 hours of small-group instruction. An additional 200,000 hours of such instruction will be provided under new agreements signed with the teachers' unions.

Originally, the ministry had hoped that some 700 schools would join Ofek Hadash next year, on top of the approximately 310 schools that participated this year. But it now seems that only around 450 will join.

This is in part because the raises given to all teachers under the new agreements with their unions reduced the incentive to join Ofek Hadash, which offers an additional raise. Schools can only join if 50 percent of the teachers consent.

In addition to expanding Ofek Hadash, the ministry plans to reduce class sizes to a maximum of 32 students at some 600 schools next year - 200 elementary schools, 200 junior highs and 200 high schools. The goal is to reduce all classes nationwide to 32 students, which the ministry estimates will take 10 to 12 years.

The criteria for choosing the 600 schools to join the program next year include the students' socioeconomic background; the school's location, with preference going to schools in outlying areas; and whether the school has the physical capacity to accommodate additional classes. But the selection process is being hampered because the ministry's data on the schools' physical condition is highly out of date, having been amassed back in 1993.

Also yesterday, the Secondary School Teachers Association slammed the decision to include elementary schools in next year's program and vowed to appeal it to Prime Minister Ehud Olmert and Finance Minister Roni Bar-On.

Noting that elementary schools are already less crowded than secondary schools - and a ministry panel therefore advocated starting the class-size reductions at junior highs - SSTA Chairman Ran Erez said Tamir had no authority to single-handedly overrule the advisory panel.