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A bill requiring psychometric exam preparation centers to refund fees when a student cancels enrollment passed its second and third readings in the Knesset yesterday. Any such school refusing to return all or most of the tuition fees in this event would be ineligible to receive state funds given to demobilized soldiers for study.

The law also requires every such center to publish its success rate. It goes into effect immediately.

"Today, students of the psychometric [preparation] institutes are captive customers, almost to the point of slavery," the bill's sponsor, MK Silvan Shalom (Likud), said yesterday. "The centers operate without supervision and exploit the younger generation, which needs their services."

According to Shalom, those who drop out of the test preparation classes are forced to part with up to 70 percent of the fees paid.

Shalom said the problem is especially serious because most of the money for the "wide-open market" of the test prep centers comes from the state funds for educating and training discharged soldiers.

The test prep market has an annual turnover of NIS 700 million, Shalom said, of which 50 percent to 70 percent comes from the discharged soldiers' fund.

"We cannot sit with folded arms and not pay attention to the problem," Shalom said. His private member's bill was combined with that of MKs Yohanan Plesner (Kadima) and Alex Miller (Yisrael Beiteinu).

The new law stipulates that even if a student withdraws from the course up to one month before studies begin, he or she is eligible for a full refund. A 10-percent cancellation fee is to be levied for cancellation during the month prior to the start of studies, and if a student drops out within the first third of the course, he or she would pay only 40 percent of the total tuition.

The amount of the fine must be calculated according to the actual tuition paid, and not the published price list.

In addition, the centers are prohibited from adding to that amount sums for expenses such as textbooks or registration fees.

The law stipulates various requirements for test preparation centers to receive funds from the fund for discharged soldiers. They must obtain a license from the Education Ministry, provide contracts in "plain Hebrew" and observe safety regulations.

The National Center for Testing and Assessment is to publish the main psychometric test and the answers in the media, including newspapers and the Internet, in addition to publishing the success rates of each test prep center.