DEVRY INC, S-3, 1997-02-27

DEVRY INC
S-3, 1997-02-27
EDUCATIONAL SERVICES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 1997
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DEVRY INC.
------------------------
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
Delaware 36-3150143
(State of incorporation) (I.R.S. Employer Identification Number)
</TABLE>

ONE TOWER LANE
OAKBROOK TERRACE, ILLINOIS 60181
(630) 571-7700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES)

MARILYNN J. CASON
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
ONE TOWER LANE
OAKBROOK TERRACE, ILLINOIS 60181
(630) 571-7700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:

<TABLE>
<S> <C>
PHILIP J. NIEHOFF LAWRENCE D. LEVIN
MAYER, BROWN & PLATT MARK D. WOOD
190 SOUTH LASALLE STREET KATTEN MUCHIN & ZAVIS
CHICAGO, ILLINOIS 60603 525 WEST MONROE STREET
CHICAGO, ILLINOIS 60661
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED TO BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value)....... 2,300,000 shares $24.75 $56,925,000 $17,250
=================================================================================================================================
</TABLE>

(1) Includes 300,000 shares to be offered upon exercise of the Underwriters'
over-allotment option.
(2) Estimated solely for purposes of determining the registration fee, based on
the average of the high and low sales prices on the New York Stock Exchange
Composite Tape on February 25, 1997.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED FEBRUARY 27, 1997

PROSPECTUS

2,000,000 SHARES

DEVRY LOGO

COMMON STOCK
------------------

Of the 2,000,000 shares of common stock (the "Common Stock") offered
hereby, 1,000,000 shares are being sold by DeVRY INC. (the "Company") and
1,000,000 shares are being sold by certain stockholders of the Company (the
"Selling Stockholders"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholders. See "Principal and Selling
Stockholders."

The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the trading symbol "DV." The last sale price of the Common Stock as
reported on the NYSE on February 26, 1997 was $23.38 per share. See "Price Range
of Common Stock and Dividend Policy."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=======================================================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share............................. $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3).............................. $ $ $ $
=======================================================================================================================
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933. For information regarding
indemnification of the Underwriters, see "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $250,000.

(3) The Company and a Selling Stockholder have granted the Underwriters a
30-day option to purchase up to 200,000 and 100,000 additional shares of
Common Stock, respectively, solely to cover over-allotments, if any. See
"Underwriting." If such option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions, Proceeds to Company and
Proceeds to Selling Stockholders will be $ , $ , $ and
$ , respectively.

------------------

The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
March , 1997 at the offices of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001.

------------------

Smith Barney Inc.
ABN AMRO Chicago Corporation
Alex. Brown & Sons
Incorporated
Credit Suisse First Boston

March , 1997
<PAGE> 3

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE CHICAGO STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE COMMON STOCK IN ACCORDANCE WITH REGULATION M UNDER THE
SECURITIES EXCHANGE ACT OF 1934.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Seven World Trade Center, New York, New York 10048 and at
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can also be obtained upon written request addressed to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates, or from the Commission's worldwide web site at
http://www.sec.gov. Such reports and other information concerning the Company
can also be inspected at the offices of the New York Stock Exchange, Inc.
("NYSE"), 20 Broad Street, New York, New York 10005 and the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60605.

The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act"), with respect to the shares of Common Stock offered hereby. This
Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain items of which are contained in exhibits
to the Registration Statement as permitted by the rules and regulations of the
Commission. Statements made in this Prospectus as to the content of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the Registration
Statement, which may be inspected and copied in the manner and at the sources
described above.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:

(1) The Company's Annual Report on Form 10-K for the year ended June 30,
1996;

(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996 and December 31, 1996; and

(3) The Company's Current Reports on Form 8-K filed July 3, 1996, as
amended by Form 8-K/A filed August 30, 1996, and on August 23, 1996.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents.

Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in any
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits thereto, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to the Company's principal
office: DeVRY INC., One Tower Lane, Oakbrook Terrace, Illinois 60181, Attention:
Secretary (telephone: (630) 571-7700).

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including notes thereto,
appearing elsewhere in this Prospectus. Unless indicated or the context requires
otherwise, references to years refer to the Company's fiscal years then ended,
and references to share and per share amounts have been restated to reflect the
Company's two-for-one stock splits, each in the form of a 100% stock dividend,
effective June 21, 1995 and December 18, 1996. Unless otherwise indicated, all
information in this Prospectus is based on the assumption that the Underwriters'
over-allotment option is not exercised.

THE COMPANY

The Company, through its wholly-owned subsidiaries, owns and operates the
DeVRY Institutes of Technology (the "DeVRY Institutes") and the Keller Graduate
School of Management ("KGSM"), which collectively form one of the largest
private degree-granting higher education systems in North America. The Company
also owns and operates Becker CPA Review ("Becker"), which prepares candidates
for the Certified Public Accountant ("CPA") and Certified Management Accountant
("CMA") professional certification examinations, and Corporate Educational
Services ("CES"), which provides customized, on-site technical education and
training services to corporations and government agencies. The Company's
operations serve both full and part-time students, providing a full range of
educational alternatives to address all stages of an adult's postsecondary
professional life. The DeVRY Institutes' operations accounted for approximately
93% of the Company's revenues in fiscal 1996. In the first half of fiscal 1997,
which period for the first time includes the operations of Becker, the DeVRY
Institutes' operations accounted for approximately 88% of the Company's
revenues.

The DeVRY Institutes were founded in 1931 and for more than 65 years have
provided career-oriented technical education to high school graduates in the
United States and Canada. KGSM, founded in 1973, employs a faculty of practicing
business professionals to teach master of business administration ("MBA"),
master of project management ("MPM"), master of human resource management
("MHRM") and master of telecommunications management ("MTM") degree programs to
working adults in the United States. The DeVRY Institutes and KGSM are each
accredited by the Commission on Institutions of Higher Education of the North
Central Association of Colleges and Schools, the same agency that accredits
other four-year publicly supported and independent colleges in the North Central
region. Becker, which was acquired by the Company in June 1996, was founded in
1957 and has become a leading CPA review course, which is administered
nationally and internationally.

The DeVRY Institutes are located on ten campuses in the United States and
four campuses in Canada. At the beginning of the fall 1996 semester, 30,585 full
and part-time students were enrolled in the DeVRY Institutes' diploma, associate
and bachelor's degree day and evening programs in electronics, electronics
engineering technology, computer information systems, accounting, business
operations, technical management and telecommunications management. KGSM classes
are offered at 19 locations nationwide, with a total enrollment of 4,011
students as of the beginning of the November 1996 term. More than 20,000
students annually attend Becker CPA review courses at approximately 140
locations in the United States and 10 locations internationally.

COMPANY STRATEGY

development of new programs and delivery formats for part-time and evening
students and (iv) the expansion of recruiting efforts in selected regions. In
order to increase market penetration and operating leverage and to capitalize
more extensively on economies of scale realized through local marketing and
national advertising efforts, the Company plans to continue to upgrade and
expand certain existing school facilities and open new schools. The Company
believes that it is strongly positioned to capitalize on projected demographic
and market trends, including the projected increase in the number of U.S. high
school graduates, the expected increased demand for technical curricula and the
projected increase in the number of adult students entering the postsecondary
education system.

DeVRY Inc. was incorporated under the laws of the State of Delaware in
1973. Its principal executive offices are located at One Tower Lane, Oakbrook
Terrace, Illinois 60181, and its telephone number is (630) 571-7700. The
Company's worldwide web location is http://www.devry.com.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.......... 1,000,000 shares
Common Stock offered by the Selling
Stockholders............................... 1,000,000 shares
Total................................... 2,000,000 shares
Common Stock to be outstanding after the
Offering(1)................................ 34,292,194 shares
Use of proceeds by the Company............... The net proceeds to the Company from the Offering
will be used to repay indebtedness. The Company will
not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholders. See "Use of
Proceeds."
NYSE symbol.................................. "DV"
</TABLE>

- -------------------------
(1) Excludes an aggregate of 1,516,790 shares of Common Stock reserved for
issuance under the Restated Stock Incentive Plan, 1991 Stock Incentive Plan
and 1994 Stock Incentive Plan.
4
<PAGE> 6
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following table sets forth certain summary consolidated financial
information and other data for the Company. This information should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this Prospectus. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, FISCAL YEARS ENDED JUNE 30,
-------------------- --------------------------------
1996 1995 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues............................ $150,511 $126,779 $260,007 $228,593 $211,437
Cost of educational services.............. 89,656 76,699 155,254 136,721 127,673
Student services and administrative
expense................................ 39,866 33,362 70,992 63,043 58,146
Interest expense.......................... 1,691 567 1,063 3,070 4,615
Net income................................ 11,741 9,416 19,245 14,896 12,225
Earnings per common share................. $0.35 $0.28 $0.57 $0.45 $0.37
Weighted average shares used in
calculating per share amounts (in
thousands)............................. 33,773 33,596 33,661 33,454 33,388
PRO FORMA DATA:(1)
Pro forma earnings per common share....... $0.35 $0.58
Pro forma weighted average shares used in
calculating per share amounts (in
thousands)............................. 34,773 34,437
OTHER DATA:
Earnings before interest and taxes
(EBIT)(2).............................. $ 20,989 $ 16,718 $ 33,761 $ 28,829 $ 25,618
DeVRY Institutes and KGSM fall term
enrollment............................. 34,596 32,612 32,612 29,884 28,815
Number of DeVRY Institutes................ 14 13 13 11 11
Number of KGSM Centers.................... 19 17 18 17 15
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
AS
ACTUAL ADJUSTED(3)
------ -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............... $ 27,543 $ 27,543
Total assets............................ 208,145 208,145
Long-term debt.......................... 44,000 20,500
Total shareholders' equity.............. 69,085 92,585
</TABLE>

- -------------------------
(1) Pro forma earnings per common share and weighted average shares outstanding
for the year ended June 30, 1996 and the six months ended December 31, 1996
are adjusted to reflect, as if occurring on July 1, 1995, (i) receipt by the
Company of the net proceeds from the sale of the 1,000,000 shares of Common
Stock offered hereby by the Company at an assumed public offering price of
$25.00 per share and (ii) the application of the net proceeds of the
Offering to repay indebtedness.

(2) EBIT is presented because the Company believes that it allows for a more
complete analysis of the Company's results of operations. This information
should not be considered as an alternative to, nor is there any implication
that this information is more meaningful than any measure of performance or
liquidity as promulgated under generally accepted accounting principles.

(3) Adjusted to reflect (i) receipt by the Company of the net proceeds from the
sale of the 1,000,000 shares of Common Stock offered hereby by the Company
at an assumed public offering price of $25.00 per share and (ii) the
application of the net proceeds of the Offering to repay indebtedness.
5
<PAGE> 7

RISK FACTORS

Prospective purchasers should carefully consider the following risk
factors, together with other information in this Prospectus, in evaluating an
investment in the shares of Common Stock.

DEPENDENCE ON STUDENT FINANCIAL AID; PRIOR NON-COMPLIANCE WITH FINANCIAL AID
REGULATIONS

Students attending the DeVRY Institutes finance their education through a
combination of family contributions, individual resources (including earnings
from full or part-time employment), financial aid (including Company-provided
financial aid) and tuition reimbursement from their employers. The Company
estimates that approximately 79% of the U.S. and Canadian DeVRY Institutes'
students receive some government-sponsored financial aid. Government-sponsored
financial aid is of great importance to the Company because approximately 68% of
the DeVRY Institutes' U.S. tuition, book and fee revenues collected in fiscal
1996 were dependent on some form of such financial aid received by its students.
In fiscal 1995, approximately 69% of revenues collected were dependent on
financial aid.

The government-provided financial aid and assistance programs in which many
of the Company's students participate are subject to political and budgetary
considerations. There is no assurance that government funding for the financial
aid programs in which the Company's students participate will be maintained at
current levels. A reduction in funding levels to financial aid programs could
result in lower enrollments and/or an increased amount of Company-provided
financial aid to its students.

Extensive and complex regulations in the United States and Canada govern
all of the government grant, loan and work programs in which the Company and its
students participate. These regulations and their application and interpretation
may change from time to time. Regulations and standards that an institution must
satisfy in order for its students to participate in federal financial assistance
programs include, among others, maximum student loan default rates; limits on
the proportion of an institution's revenue that can be derived from federal aid
programs; financial responsibility and administrative capability requirements;
and prohibition of certain types of incentive payments to student recruiters.
Failure to achieve these standards or otherwise demonstrate, in conformity to
the regulations, its ability to continue to provide the educational services it
offers could result in the Company being required to post a surety bond to
permit its students to continue to participate in federal financial assistance
programs. In addition, because U.S. financial assistance programs are required
to be administered in accordance with the standard of care and diligence of a
fiduciary, any regulatory violation could be the basis for the initiation of
suspension, limitation or termination proceedings against the Company. Changes
in or new interpretations of applicable laws, rules or regulations could have a
material adverse effect on the Company in the future. Although the Company has
no reason to believe that any proceeding against the Company is presently
contemplated, if such a proceeding were initiated against the Company and
resulted in a substantial curtailment of the Company's participation in
government grant or loan programs, the Company could be materially adversely
affected. See "Business--Financial Aid and Financing Student Education."

DeVRY Institutes' Toronto-area campuses were notified at the end of August
1995 that the Ontario Ministry of Education and Training had temporarily
suspended the processing of new financial aid applications from DeVRY students
pending review of inaccuracies found in applications filed by some students. The
Ministry believed that some of DeVRY's Toronto-area students applied for and
collected what might be excessive government-sponsored financial aid by
inappropriately reporting that they had "zero income." A Ministry audit of the
administration of financial aid at DeVRY Institutes' Toronto-area campuses, with
the Company's full cooperation, began in September 1995 and is still in process.
In order to restore financial aid eligibility, the Company refunded to the
Ministry approximately $1.7 million (CDN), for the 1995-1996 academic year,
which the Company believes is substantially all of the financial aid previously
inappropriately disbursed to such "zero income" students for this time period,
and posted a letter of credit for $2.0 million (CDN) against any possible
additional amounts that may have been inappropriately disbursed, as determined
by the Ministry audit. Effective with the spring 1996 term which began in March
1996, the Ministry conditionally reinstated approval for the processing of
financial aid applications. As a consequence, results of operations for the
Company's Canadian operations were materially adversely affected. See "Business
- --

6
<PAGE> 8

Financial Aid and Financing Student Education" and Note 9 to the Consolidated
Financial Statements. Full unconditional reinstatement is subject to the
Ministry's appointed auditor's completion of its audit and verification of the
Company's compliance with financial aid processing regulations. There is no
assurance that unconditional reinstatement will be granted, and any failure to
receive such unconditional reinstatement could reduce future enrollments and
have a material adverse effect on the Company.

STUDENT LOAN DEFAULTS

The Company is substantially dependent on continued participation by its
students in that portion of government financial aid assistance represented by
student loan programs. The Company believes that in 1996 federal student loans
represented more than 80% of the federal aid received by students at the U.S.
DeVRY Institutes and 100% of the federal aid received by students at KGSM. A
substantial majority of these student loans is provided under the Federal Family
Education Loan Program ("FFELP") and William D. Ford Federal Direct Student Loan
Program ("FDSL"). For a variety of reasons, high student loan default rates on
federal student loans are most often found in proprietary institutions,
institutions having large minority populations and community colleges, all of
which tend to have a higher percentage of low income students enrolled than do
four-year publicly supported and independent colleges and universities. In 1989,
the U.S. Department of Education instituted strict regulations that penalize
educational institutions with high student loan default rates. These regulations
were further tightened by the 1992 Higher Education Reauthorization Act ("HEA").
Any individual institution with a FFELP or FDSL default rate ("cohort default
rate") exceeding 20% for the year is required to develop a default management
plan meeting specified federal standards in order to reduce defaults, although
the institution's operations and its students' ability to utilize student loans
are not restricted. Due to the recent introduction of the FDSL program, no
default rates for this program have yet been reported. Any individual
institution with a cohort default rate of 25% or more for three consecutive
years is ineligible for participation in these loan programs and cannot offer
student loans administered by the U.S. Department of Education for the fiscal
year in which the ineligibility determination is made and for the two succeeding
fiscal years. In addition, students attending an institution whose cohort
default rate has exceeded 25% for three consecutive years will be ineligible for
Federal Pell Grants ("Pell"). Any institution with a cohort default rate of 40%
or more in any year is subject to immediate limitation, suspension or
termination proceedings from all federal aid programs.

The Company carefully monitors its students' loan default rate. According
to reports by the U.S. Department of Education, the Company's schools had cohort
default rates for 1994 (the latest year for which statistics are available)
ranging from 1.5% to 25.1%. The Company's systemwide cohort default rate was
approximately 17.6%. The reported rates for 1994 reflect the proportion of
former students who were due to begin repaying their loans during that year but
who were in default by the end of 1995. For 1993, the Company's weighted average
cohort default rate was 18.6%. Cohort default rates are subject to revision by
the Department of Education as new data becomes available and are subject to
appeal by schools contesting the accuracy of the data. Upon review of the
calculations of the cohort default rates for the DeVRY Institutes, the Company
discovered errors and exceptions. The Company has requested that the Department
of Education recalculate the cohort default rates for 1994. The loss of
eligibility to participate in the FFELP or FDSL programs at one or more of the
Company's schools could have a material adverse effect on the Company.

Only one of the DeVRY Institutes had a reported cohort loan default rate
greater than 20% for 1994. That Institute, whose cohort default rate was
reported at 25.1%, has initiated a default management plan and has requested
that the Department of Education recalculate its cohort default rate based upon
its belief that erroneous data was included and resulted in an overstatement of
the reported cohort default rate. This same Institute had a cohort default rate
of 26.6% for 1993 and a cohort default rate of 22.5% for 1992. If this Institute
were to have a cohort default rate above 25.0% for fiscal 1995 (preliminary
results for which are expected to be available in spring 1997), this Institute
would lose its eligibility to participate in student loan programs and the Pell
grant program. No DeVRY Institute is currently subject to any restrictions or
termination under these student loan programs.

7
<PAGE> 9

There can be no assurance that federal funding for the FFELP or FDSL
programs will be continued at current levels, or at all. Discontinuance or
significant reductions in any of these programs could have a material adverse
effect on the Company.

STATE APPROVAL AND LICENSING

Authorizations from state or provincial licensing agencies or ministries
are required to recruit students, operate the Company's schools and grant
degrees. Many states and provinces require for-profit postsecondary education
institutions to post surety bonds for licensure. The Company has posted
approximately $1.0 million of surety bonds with state and local regulatory
authorities and approximately $1 million (CDN) of surety bonds with regulatory
agencies in Canada. Certain states have set standards of financial
responsibility beyond those prescribed by federal regulation. For example,
fiscal tests adopted by the California legislature (as discussed more fully
below) and similar regulations adopted or proposed by other state regulators may
place the Company in future non-compliance under certain state regulations. If
the Company were unable to meet these tests and could not otherwise demonstrate
that it was financially responsible, it could be required to cease operations in
a particular state, which could have a material adverse effect on the Company.
To date, the Company has successfully demonstrated its financial responsibility
where required.

In January 1991, the State of California adopted legislation that requires
private, postsecondary educational institutions to meet certain fiscal tests in
order to continue operating in the state. These fiscal tests include three
requirements: (i) not having an operating loss in each of an institution's two
most recent fiscal years; (ii) having positive net worth in its latest fiscal
year; and (iii) maintaining a ratio of current assets to current liabilities of
1.25:1 or greater. The Company has achieved two of the required fiscal tests but
has not maintained a ratio of current assets to current liabilities of 1.25:1,
because the Company believes that maintaining such a ratio would be an
inefficient use of its assets. At June 30, 1996, the Company had a ratio of
current assets to current liabilities of 1.17:1. The California Council for
Private Postsecondary and Vocational Education (the "California Council") also
has discretion under this statute to allow an educational institution to
continue operating, even if it does not satisfy the fiscal tests, if the
institution can demonstrate that it has maintained sufficient financial
resources to sustain all of its promised educational services. The Company
believes that at June 30, 1996 it had satisfactorily demonstrated to the
California Council its financial strength and ability to continue to operate. If
the Company were unable to meet the California Council's fiscal tests or
otherwise demonstrate its financial strength to the California Council, it would
have to cease operating its DeVRY Institutes in Pomona and Long Beach but could
continue to recruit students in California. If the Company were required to
cease operating in Pomona and Long Beach, the Company's operating results could
be materially adversely affected. In connection with granting authority for
continued operations, California law also requires an on-site visit to all
postsecondary institutions having accreditation from a regional accrediting
association other than the Western Association of Colleges and Schools. The
California Council conducted a visit to the California campuses in August 1996
and recently issued its report granting approval for continued degree-granting
operation for the maximum five-year period.

RISKS ASSOCIATED WITH EXPANSION

There can be no assurance that suitable expansion or acquisition
opportunities will be identified or that any new or acquired institutions can be
operated profitably or successfully integrated into the Company's operations.
Growth through expansion or acquisition also could involve other risks,
including the diversion of management's attention from normal operating
activities, the inability to find appropriate personnel to manage the Company's
expanding operations and the possibility that new or acquired schools will be
subject to unanticipated business or regulatory uncertainties or liabilities.
The failure of the Company to manage its expansion and acquisition program
effectively could have a material adverse effect on the Company.

EFFECT OF CHANGES IN CPA EXAMINATION REQUIREMENTS

Several states have either adopted or introduced legislation that requires
150 semester units (the equivalent of five years of college) before a candidate
can sit for the CPA exam. Forty-seven of the 50 states have introduced bills to
implement the law. The status of these bills is as follows: rejected in 13
states; passed

8
<PAGE> 10

but modified to a four-year track in three states; pending in five states;
passed but not yet implemented in 25 states; and passed and implemented in four
states (Florida, Alabama, Tennessee and Utah). Most states that have passed such
laws did so before there was any organized opposition to it. In Florida, where
the law has been implemented for over 10 years, Becker experienced a material
reduction in students in the two- to three-year period following implementation,
followed by a return to normal enrollment levels. However, the impact of the law
in other states is presently unknown, as Alabama, Tennessee and Utah have
implemented the law only within the last two years. Additionally, some states,
such as California, have passed or may pass laws requiring completion of all
educational requirements before taking the CPA examination. This change has the
effect of delaying, for six months or more, enrollment in Becker's review class
by certain students in those states. If this 150 semester unit legislation is
broadly implemented, it could have a material adverse effect on the Company.

9
<PAGE> 11

USE OF PROCEEDS

The net proceeds to the Company from the Offering, at an assumed public
offering price of $25.00 per share (after deduction of estimated underwriting
discounts and commissions and Offering expenses) are expected to be
approximately $23.5 million (approximately $28.3 million if the Underwriters'
over-allotment option is exercised in full). The Company will not receive any
proceeds from the sale of shares of Common Stock by the Selling Stockholders.
The Company intends to use the net proceeds to repay indebtedness. The
indebtedness to be repaid bears interest at the London Inter-Bank Offered Rate
("LIBOR") plus 0.625% and matures in August 1999. Such indebtedness has been
incurred in connection with the acquisition of Becker and for general corporate
purposes. Upon repayment of such indebtedness, the Company will have
approximately $66.0 million available under its revolving line of credit. The
Company may use funds available under this facility for capital expenditures,
the purchase of properties for new DeVRY Institutes and possible future
acquisitions of complementary businesses. See "Business--Properties." From time
to time, the Company is involved in the evaluation of, and discussions with,
possible acquisition candidates, although the Company currently has no
agreements, commitments or understandings with respect to any such acquisitions.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is listed on the NYSE under the trading symbol "DV." Prior
to November 14, 1995, the Common Stock was quoted on the Nasdaq National Market.
The table below sets forth the high and low sales prices of the Common Stock
during the periods shown. All sales price information has been restated to
reflect the Company's two-for-one stock splits effective June 21, 1995 and
December 18, 1996.

<TABLE>
<CAPTION>
FISCAL HIGH LOW
------ ------ ------
<S> <C> <C>
1995
First Quarter............................................. $ 7.25 $ 6.27
Second Quarter............................................ 7.75 6.44
Third Quarter............................................. 9.66 7.63
Fourth Quarter............................................ 10.75 9.13
1996
First Quarter............................................. $12.88 $10.00
Second Quarter............................................ 14.06 11.00
Third Quarter............................................. 17.75 12.88
Fourth Quarter............................................ 22.94 16.50
1997
First Quarter............................................. $23.44 $19.00
Second Quarter............................................ 25.38 18.38
Third Quarter (through February 26, 1997)................. 28.00 22.63
</TABLE>

The last reported sales price of the Common Stock on February 26, 1997 as
reported on the NYSE was $23.38.

The Company is a holding company and, as such, is dependent on the earnings
of its subsidiaries for funds to pay cash dividends. Cash flow from the
Company's subsidiaries may be restricted by law and is restricted by covenants
in the subsidiaries' debt agreements. The Company's subsidiaries are currently
limited by the terms of the Company's revolving line of credit agreement in
their ability to distribute any cash to the Company including dividends, except
for Directors' fees and loans to fund the expenses associated with compliance
with securities laws and regulations payable by the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The Company has not paid any
dividends on its Common Stock and expects for the foreseeable future to retain
all of its earnings from operations for use in the Company's business. From time
to time, the Board of Directors reviews the Company's dividend policy. Any
payment of dividends will be at the discretion of the Board of Directors and
will be dependent on the earnings and financial requirements of the Company and
other factors, including the foregoing restrictions on the Company's
subsidiaries' cash flow, legal restrictions on the payment of dividends by the
Company and such other factors as the Board of Directors deems relevant.

10
<PAGE> 12

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1996 and as adjusted to reflect the Offering and the application of
the estimated net proceeds to the Company of $23.5 million (based upon an
assumed public offering price of $25.00 per share) for repayment of
indebtedness.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
(DOLLARS IN THOUSANDS)
ACTUAL AS ADJUSTED
-------- -----------
<S> <C> <C>
Long-term debt(1)........................................... $ 44,000 $ 20,500
-------- --------
Shareholders' equity:
Common Stock (75,000,000 shares authorized, 33,265,244
shares issued and outstanding (actual) and 34,265,244
shares issued and outstanding (as adjusted))(2)........ 333 343
Additional paid-in capital................................ 36,744 60,234
Retained earnings......................................... 31,561 31,561
Cumulative translation adjustment......................... 447 447
-------- --------
Total shareholders' equity............................. 69,085 92,585
-------- --------
Total capitalization.............................. $113,085 $113,085
======== ========
</TABLE>

- -------------------------
(1) Subsequent to December 31, 1996, the Company repaid $3.0 million of
long-term debt.

(2) Excludes an aggregate of 1,543,740 shares of Common Stock reserved for
issuance as of December 31, 1996 under the Restated Stock Incentive Plan,
the 1991 Stock Incentive Plan and the 1994 Stock Incentive Plan.

11
<PAGE> 13

SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

The following table sets forth, for the periods and at the dates indicated,
selected consolidated financial data for the Company. The consolidated financial
information for the fiscal years ended June 30, 1996, 1995, 1994, 1993 and 1992
included below have been derived from the Company's consolidated financial
statements, which statements have been audited by Price Waterhouse LLP
independent accountants. Their report on the financial statements for the fiscal
years ended June 30, 1996, 1995 and 1994 is included at page F-2. The
information at December 31, 1996 and 1995 and for the six-month periods then
ended has been derived from the Company's consolidated financial statements
included elsewhere in this Prospectus. Such financial statements are unaudited,
but in the opinion of the Company reflect all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the results
of operations for such periods. The results of operations for the six-month
period ended December 31, 1996 are not necessarily indicative of the results
that may be expected for the entire fiscal year ending June 30, 1997. The
selected financial data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and notes thereto
appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, FISCAL YEARS ENDED JUNE 30,
------------------- ----------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues...................... $150,511 $126,779 $260,007 $228,593 $211,437 $191,915 $179,196
Cost of educational services........ 89,656 76,699 155,254 136,721 127,673 117,596 109,172
Student services and administrative
expense........................... 39,866 33,362 70,992 63,043 58,146 51,881 50,490
Interest expense.................... 1,691 567 1,063 3,070 4,615 6,849 9,661
-------- -------- -------- -------- -------- -------- --------
Income before income taxes and
cumulative effect of change in
accounting principle.............. 19,298 16,151 32,698 25,759 21,003 15,589 9,873
Income tax provision................ 7,557 6,735 13,453 10,863 8,778 6,158 3,984
Cumulative effect of change in
accounting principle.............. -- -- -- -- -- -- 15,798
-------- -------- -------- -------- -------- -------- --------
Net income.......................... $ 11,741 $ 9,416 $ 19,245 $ 14,896 $ 12,225 $ 9,431 $ 21,687
======== ======== ======== ======== ======== ======== ========
PER SHARE DATA:
Earnings per common share........... $0.35 $0.28 $0.57 $0.45 $0.37 $0.28 $0.65(1)
======== ======== ======== ======== ======== ======== ========
Weighted average shares used in
calculating per share amounts (in
thousands)........................ 33,773 33,596 33,661 33,454 33,388 33,263 33,335
CASH FLOW DATA:
Cash provided by operating
activities........................ $ 22,384 $ 23,151 $ 28,368 $ 28,200 $ 28,405 $ 24,058 $ 15,282
Capital expenditures................ 7,346 10,666 18,352 14,551 6,288 5,147 3,892
BALANCE SHEET DATA:
Cash and cash equivalents........... $ 27,543 $ 22,760 $ 29,948 $ 26,252 $ 22,704 $ 13,344 $ 16,015
Total assets........................ 208,145 153,814 178,089 126,671 106,798 99,210 110,769
Total funded debt................... 44,000 17,209 61,500 33,029 43,224 55,712 77,563
Total shareholders' equity.......... 69,085 47,407 57,287 37,968 22,978 11,022 1,322
OTHER DATA:
Earnings before interest and taxes
(EBIT)(2)......................... $ 20,989 $ 16,718 $ 33,761 $ 28,829 $ 25,618 $ 22,438 $ 19,534
DeVRY Institutes and KGSM fall term
enrollment........................ 34,596 32,612 32,612 29,884 28,815 27,336 26,941
Number of DeVRY Institutes.......... 14 13 13 11 11 11 11
Number of KGSM Centers.............. 19 17 18 17 15 12 10
</TABLE>

- -------------------------
(1) Results for the year ended June 30, 1992 include a $0.47 per share
cumulative effect of a change in accounting for income taxes to conform with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."

(2) EBIT is presented because the Company believes that it allows for a more
complete analysis of the Company's results of operations. This information
should not be considered as an alternative to, nor is there any implication
that this information is more meaningful than, any measure of performance or
liquidity as promulgated under generally accepted accounting principles.

12
<PAGE> 14

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion of the Company's results of operations and
financial condition should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto appearing elsewhere in
this Prospectus.

Because of the somewhat seasonal pattern of the Company's enrollments and
its term starting dates, which affect the results of operations and the timing
of cash inflows, the Company believes that comparisons of its results of
operations and financial position should be made to both the end of the previous
fiscal year and to the corresponding period in the preceding year. Typically,
due to the seasonality of student enrollments, the Company's second and third
quarters have the highest revenues and net income within a fiscal year. See Note
10 to the Consolidated Financial Statements.

RESULTS OF OPERATIONS

General

The following table sets forth for the periods indicated (i) the percentage
relationship of certain income statement items to total revenues and (ii) the
percentage change in each line item from the prior period:

<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED PERIOD-TO-PERIOD
DECEMBER 31, JUNE 30, PERCENTAGE CHANGES
------------- --------------------- ---------------------------------------
SIX MONTHS ENDED 1996 1995
DECEMBER 31, 1996 COMPARED COMPARED
1996 1995 1996 1995 1994 COMPARED TO 1995 TO 1995 TO 1994
----- ----- ----- ----- ----- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Tuition......................... 90.0% 89.8% 91.0% 90.8% 90.4% 19.1% 14.0% 8.5%
Other........................... 10.0 10.2 9.0 9.2 9.6 15.5 11.1 4.1
----- ----- ----- ----- -----
Total revenues................ 100.0 100.0 100.0 100.0 100.0 18.7 13.7 8.1
Costs and expenses:
Cost of educational services.... 59.6 60.5 59.7 59.8 60.4 16.9 13.6 7.1
Student services and
administrative expense........ 26.5 26.3 27.3 27.6 27.5 19.5 12.6 8.4
Interest expense................ 1.1 0.5 0.4 1.3 2.2 198.2 (65.4) (33.5)
----- ----- ----- ----- -----
Total costs and expenses...... 87.2 87.3 87.4 88.7 90.1 18.6 12.1 6.5
----- ----- ----- ----- -----
Income before income taxes........ 12.8 12.7 12.6 11.3 9.9 19.5 26.9 22.6
Income tax provision.............. 5.0 5.3 5.2 4.8 4.1 12.2 23.8 23.8
----- ----- ----- ----- -----
Net income........................ 7.8% 7.4% 7.4% 6.5% 5.8% 24.7% 29.2% 21.9%
===== ===== ===== ===== =====
</TABLE>

Six Months Ended December 31, 1996 vs. Six Months Ended December 31, 1995

Tuition revenues increased by $21.7 million or 19.1% in the first half of
fiscal 1997 compared to the same period in fiscal 1996. The increase in tuition
revenues was produced by several positive factors, including enrollment
increases at the DeVRY Institutes where total student enrollment for the summer
and fall semesters in fiscal 1997 increased by 4.6% and 4.3%, respectively, from
fiscal 1996. These are the seventeenth and eighteenth consecutive terms of
increased total student enrollment as compared to the prior year period at the
DeVRY Institutes. At KGSM, total enrollment for the term which began in November
1996 increased more than 22% from November 1995. Tuition revenues also increased
because of tuition rate increases which became effective at the DeVRY Institutes
in March 1996 and at KGSM in September 1996. In June 1996, the Company acquired
Becker which also contributed to the Company's revenue increase in the first
half of fiscal 1997.

Other educational revenues, comprised primarily of sales of books and
supplies, increased by $2.2 million or 18.1% because of sales to the increased
number of students attending the Company's educational programs.

Interest income on the Company's short-term investments decreased by
$222,000 or 35.7% from the prior year period because of lower cash balances
available for investment throughout the period.

13
<PAGE> 15

Cost of educational services for the first half of fiscal 1997 increased by
$13.0 million or 16.9% from the comparable period in fiscal 1996. Cost of
educational services includes the cost of faculty and related staff, which
consistently comprises approximately 60% of this expense category. Also included
in this expense category are the costs of facilities, supplies, bookstore sales,
other student education-related support activities and the cost of tuition
refunds and uncollectible accounts. The increase in cost of educational services
in the first half of fiscal 1997 reflects the additional facility, faculty and
staff costs associated with Becker's operations and the higher wage, benefit,
supply and service expenses associated with growing student enrollments at the
DeVRY Institutes and at KGSM. Depreciation expense increased by more than $1.0
million or 32.3% in the first six months of fiscal 1997 over the comparable
period in fiscal 1996, as a result of extensive capital improvements and
additions in fiscal 1996, particularly those related to the opening of the new
DeVRY Institute in North Brunswick, New Jersey, and the upgrading of school
laboratories and teaching equipment throughout the system.

Student services and administrative expense increased by $6.5 million or
19.5% for the first six months of fiscal 1997 over the comparable period in
fiscal 1996. Student services and administrative expense includes the costs of
new student recruiting, curriculum development and general and administrative
costs. The increase in student services and administrative expense reflects the
marketing costs associated with Becker's operations and the marketing costs
associated with generating the higher student enrollments at the DeVRY
Institutes and at KGSM for the terms which have already begun in fiscal 1997 and
for the terms which will begin in the coming months. This increase also includes
nearly $788,000 in amortization of intangibles and goodwill, primarily
associated with the Becker acquisition.

The Company's earnings from operations, before interest expense and taxes,
were a record $21.0 million for the first six months of fiscal 1997. Operating
margins, which have been increasing consistently year over year, increased again
in the first half of fiscal 1997, climbing to 13.9% from 13.2% for the prior
year. Operating margins were favorably affected by the inclusion of Becker
results, where operating margins have historically been higher, by the higher
revenues and improved facility utilization from the increased enrollments at the
DeVRY Institutes and KGSM and by continued cost containment measures.

Interest expense in the first half of fiscal 1997 increased by $1.1 million
or 198.2% from the comparable period in fiscal 1996 because of higher
outstanding debt levels resulting from the acquisition, for cash, of Becker in
June 1996. At December 31, 1996, long-term debt increased by nearly $27.0
million from December 31, 1995.

The provision for income taxes of $7.6 million for the first half of fiscal
1997 continued at a lower rate than in the comparable fiscal 1996 period because
of a different mix in the earnings from domestic and foreign operations and
because of a lower effective state income tax rate. The effective tax rate
represents the combination of U.S. federal and state and Canadian federal and
provincial income taxes on the Company's operations in these jurisdictions.

Net income of $11.7 million, or $0.35 per share, was a record for the six
month period ending December 31, 1996, increasing by 24.7% from the same period
in fiscal 1996.

Fiscal Year Ended June 30, 1996 vs. Fiscal Year Ended June 30, 1995

Tuition revenues in fiscal 1996 increased by $29.1 million or 14.0% from
fiscal 1995. This was the largest tuition revenue increase in the history of the
Company and is attributable to both higher student enrollment at the DeVRY
Institutes and KGSM and, to a lesser extent, to tuition increases implemented
during the year.

Cumulatively, total student enrollment at the DeVRY Institutes in the three
semesters of fiscal 1996 increased by 8.6% compared with fiscal 1995. This was
partly due to higher enrollments at the Long Beach, California and Scarborough
(Toronto), Ontario, Canada campuses, both of which opened in the previous year,
and partly due to increased enrollments at the previously existing DeVRY
Institutes. Fiscal 1996 was the fifth consecutive year that total cumulative
enrollment at the DeVRY Institutes increased from the previous year and the
largest rise in any of those years. At KGSM, cumulative total student enrollment
for the five terms of fiscal 1996 grew by 16.7% compared to fiscal 1995. The
increase in enrollments was due to higher enrollments

14
<PAGE> 16

at the Pomona and Long Beach, California centers, both of which opened in fiscal
1995, the fiscal 1996 opening of a center in Tysons Corner, Virginia
(Washington, D.C. area) and continued growth in enrollments at the previously
existing centers. Tuition increases have historically been implemented by the
DeVRY Institutes effective with the spring term and effective with the fall term
at KGSM. Tuition rates rose approximately 5% at DeVRY, which is slightly below
the rate of this increase in fiscal 1995 and below the average rate of tuition
increases at other colleges and universities. Tuition rates rose similarly at
KGSM.

Other educational revenues increased by $2.5 million or 12.3% because of
sales to the increased number of students attending the Company's educational
programs. Interest income on short-term investments of cash balances in excess
of those needed for daily operations declined by $117,000 or 10.0% from fiscal
1995, as the higher level of payments for taxes on income, payments and
receivable increases associated with financial aid processing at the
Toronto-area campuses and completion of the new DeVRY Institute campus in North
Brunswick, New Jersey, reduced average investible balances during fiscal 1996.

Cost of educational services rose by $18.5 million or 13.6% in fiscal 1996
from fiscal 1995. Costs associated with the new DeVRY Institutes and KGSM
centers contributed to this increase along with higher educational costs
resulting from higher student enrollments at the existing locations.
Depreciation expense on the Company's continued investment in facilities and
equipment for its students increased by $1.4 million or 22.1% from fiscal 1995.
Tuition refund and uncollectible account expense increased in the year partly
because of higher enrollments and higher tuition revenue at DeVRY Institutes and
KGSM and partly because of the higher proportion of new DeVRY Institutes'
students in fiscal 1996 as a result of growing new student enrollments. New
student enrollment at the DeVRY Institutes increased by 10.5% from fiscal 1995
to fiscal 1996. New students historically withdraw at higher rates than do
students in later terms.

Student services and administrative expense increased by $7.9 million or
12.6% from fiscal 1995. Marketing costs have grown to support the new DeVRY
Institutes and KGSM locations and to support the higher number of new students
recruited at the existing locations. General and administrative expenses
increased from fiscal 1995 partly due to normal inflationary changes and partly
because of efforts associated with the Ontario Ministry of Education and
Training's suspension and subsequent conditional reinstatement of financial aid
eligibility for students attending the Company's Toronto-area campuses.

The Company's earnings from operations, before interest expense and taxes
on income, reached a record $33.8 million for fiscal 1996. This represents an
operating margin of 13.0%, up from 12.6% and 12.1% in fiscal 1995 and fiscal
1994, respectively. Higher revenues and cost-containment measures contributed to
the improved margins.

Interest expense was reduced by $2.0 million or 65.4% to $1.1 million for
fiscal 1996 from fiscal 1995. The lower interest expense resulted from lower
outstanding levels of debt throughout most of fiscal 1996 and the absence of the
non-recurring make-whole premium payment made in fiscal 1995 when the Company
voluntarily prepaid all of its senior subordinated notes.

Net income of $19.2 million, or $0.57 per share, was a record for any
fiscal year, increasing by 29.2% from fiscal 1995.

Fiscal Year Ended June 30, 1995 vs. Fiscal Year Ended June 30, 1994

Tuition revenues in fiscal 1995 increased by $16.3 million or 8.5% from
fiscal 1994. The rise was attributable primarily to tuition increases
implemented during the year and, to a lesser extent, to higher student
enrollments at the DeVRY Institutes and KGSM. Cumulatively, total student
enrollment at the DeVRY Institutes in the three semesters of fiscal 1995
increased by 3.3% compared with fiscal 1994. At KGSM, cumulative total student
enrollment for the five terms of fiscal 1995 grew by 17.7% from fiscal 1994.
Tuition rates grew by more than 5% at the DeVRY Institutes, a slightly lower
percentage increase than was implemented in 1994. Tuition rates were increased
similarly at KGSM.

Interest income on short-term investments increased by $625,000 or 113.4%
during fiscal 1995 because of higher cash balances available for investment
throughout most of the year and because of higher prevailing interest rates.

15
<PAGE> 17

Cost of educational services increased by $9.0 million or 7.1% in fiscal
1995 from fiscal 1994. Costs associated with rising student enrollment, such as
additional faculty and higher wages and benefits, were largely responsible for
the increase. The Company also continued its investment in growth with the
opening of new DeVRY Institutes in Long Beach, California and Scarborough
(Toronto), Ontario Canada. During the year, KGSM opened two new centers in
California, operating in the DeVRY Institute campuses in these locations.
Partially offsetting these cost increases was a reduction in depreciation
expense on certain assets whose depreciable lives expired in the first quarter
of fiscal 1995. Tuition refund and bad debt expenses also declined, reflecting
educational program and student service quality initiatives that favorably
affected the pattern of student retention, reducing refund expense and
uncollected account balances compared to prior periods.

Student services and administrative expense in fiscal 1995 increased by
$4.9 million or 8.4% from fiscal 1994. Marketing costs grew at a somewhat faster
rate than tuition revenue in support of the two new DeVRY campuses and two KGSM
centers that opened during fiscal 1994. For the year, new student enrollment at
the DeVRY Institutes increased by 7.6% from fiscal 1994.

The Company's earnings from operations, before interest expense and taxes
on income, reached a record $28.8 million in fiscal 1995. This represents an
operating margin of 12.6%, up from 12.1% in fiscal 1994 and 11.7% in fiscal
1993. Higher revenues; improved educational program success, producing greater
student retention; and cost-containment measures contributed to the improved
margins even as expansion continued.

Interest expense was reduced by $1.5 million or 33.5% to $3.1 million for
fiscal 1995. The lower interest expense resulted from scheduled principal
payments and voluntary prepayments of the Company's funded debt. In June 1995,
the Company voluntarily prepaid all $7.9 million of its 13% senior subordinated
notes, with a make-whole premium payment of $573,000 included in interest
expense in the Consolidated Statement of Income. In fiscal 1995, total funded
debt was reduced by $10.2 million.

Net income of $14.9 million or $0.45 per share was a record for any prior
fiscal year increasing by 21.9% from fiscal 1994.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary source of liquidity is the cash received from student
payments for tuition, fees and books. These payments include cash from student
and family educational loans, from other financial aid under various federal,
state and provincial programs and from student and family resources.

The pattern of cash receipts is somewhat seasonal. The level of accounts
receivable from which cash payments are collected reaches a peak immediately
after the billing of tuition, fees and books at the beginning of each DeVRY
Institute semester in July, November and March. Collections of these receivables
are heaviest at the start of each semester. In the first two months of each
semester, collections typically exceed payments for operating expenses
applicable to that period. Accounts receivable reach their lowest level just
prior to the start of the next semester, dropping to their lowest point in the
year at the end of June. The end of June corresponds to both the end of the
spring semester and to the end of a financial aid year, at which time all
financial aid for the previous 12 months should have been disbursed to students'
accounts. Both KGSM and Becker also experience seasonality in their cash
receipts and expenditures based upon their respective operating cycles. At
December 31, 1996, accounts receivable, net of the related increase in deferred
tuition revenue generated by higher enrollment and revenue levels for the first
half of fiscal 1997, were approximately equal to the level achieved at the end
of the comparable period in fiscal 1996, reflecting a continuation of the good
collection performance on balances owed by students, similar to the collection
experience in the past several years. Included in the accounts receivable at
December 31, 1996 were the receivable balances from students attending the
Becker CPA classes which were not included in the Company's net accounts
receivable balance at December 31, 1995. At June 30, 1996, net accounts
receivable were $9.7 million. The increase in accounts receivable from June 30,
1995 resulted from the inclusion of a $1.5 million receivable of refundable
income tax and from higher revenues and number of students at the DeVRY
Institutes and KGSM during the year. The increase in accounts receivable is also
attributable, in part, to the tuition financing offered by DeVRY Canada to those
students at the Toronto area campuses who were affected by the temporary

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<PAGE> 18

suspension of financial aid. In conjunction with the conditional reinstatement
of financial aid processing effective with the spring 1996 term, the Company
returned to the Ontario Ministry of Education and Training approximately $1.7
million (CDN) in payments believed to have been inappropriately disbursed to
students. In addition, the Company posted a $2.0 million (CDN) letter of credit
with the Ministry as security against possible additional amounts that may have
been inappropriately disbursed to students who incorrectly completed their
financial aid applications.

The Company estimates that historically nearly 70% of the DeVRY Institutes'
tuition, bookstore and fee revenues are derived from some form of
government-provided financial aid to its students. These financial aid and
assistance programs, in which most of the Company's students participate, are
subject to political and budgetary considerations. There is no assurance that
such funding will be maintained at current levels. Extensive and complex
regulations in the U.S. and Canada govern all of the government financial
assistance programs in which the Company's students participate. The Company's
administration of these programs is periodically reviewed by various regulatory
agencies. Any regulatory violation could be the basis for the initiation of a
suspension, limitation or termination proceeding against the Company.

Under the terms of the Company's participation in governmental financial
aid programs, certain cash received from the U.S. Department of Education is
maintained in restricted bank accounts. This cash becomes available for general
use by the Company only after student loans and grants have been credited to the
accounts of students and the cash is transferred to an unrestricted operating
cash account. The introduction of electronic fund transfers for student loans
and the direct loan program from the Department of Education have generally
accelerated the receipt and processing of these payments by the DeVRY Institutes
and KGSM, contributing to the Company's liquidity.

Cash payments for income taxes no longer benefit from the net operating
loss carryforwards, which were fully utilized by the end of the first quarter of
fiscal 1996.

In July 1996, the Company entered into an out-of-court settlement agreement
with the Internal Revenue Service (IRS) relative to the Statutory Notice of
Deficiency issued by the IRS against the Company for tax years 1988 through
1991. The claimed deficiencies related to the amortization of intangible assets
purchased during the acquisition of the DeVRY Institutes in 1987. All of these
issues have been resolved as a result of the settlement. The settlement amount
was paid in the first quarter of fiscal 1997 and is immaterial to the Company's
financial position, results of operations and liquidity.

Cash generated from operations in the first half of fiscal 1997 was
approximately equal to the amount generated in the first half of fiscal 1996.
Higher earnings, plus the increased non-cash charges for depreciation and
amortization, contributed to a higher operating cash flow, but were offset by
increases in restricted cash and decreases in accounts payable and accrued
expenses that exceeded the related benefits from changes in deferred tuition
revenue and advance tuition payments. Cash generated from operations in fiscal
1996 was $28.4 million, approximately the same as in each of the prior two
fiscal years. The generation and use of cash during the year reflects the
seasonal operating patterns discussed above. During some periods just prior to
the start of a semester, cash balances may be supplemented by temporary
borrowings under the Company's revolving line of credit. Cash generated from
operations each year has been sufficient to meet all of the Company's operating
needs and capital investment needs while reducing debt on a regular basis.

Capital expenditures in fiscal 1996 were $18.4 million. Capital
expenditures have been primarily for expansion and facility improvement,
replacement and upgrading of school laboratories and for teaching and
administrative equipment. Capital expenditures for the first half of fiscal 1997
decreased by $3.3 million or 31.1% from the first half of fiscal 1996,
reflecting the completion of construction payments and June 1996 occupancy of
the DeVRY Institutes' New Jersey campus. During the second half of fiscal 1997,
capital expenditures are expected to increase substantially in connection with
the purchase of properties for two new DeVRY Institutes as part of the Company's
expansion plans. See "Business -- Properties." Cash generated from operations
and existing cash resources have been sufficient to meet capital requirements in
the past and, with the revolving line of credit, are anticipated to be
sufficient to cover expansion plans in the future.

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<PAGE> 19

During the first half of fiscal 1997, the Company repaid $17.5 million of
its revolving loan facility using existing cash balances and cash generated from
operations. Future borrowings and/or repayments will be based upon the Company's
seasonal cash flow cycle and payment requirements for capital spending and
possible future acquisitions. See "Use of Proceeds."

In June 1996, the Company and its banks renegotiated the Company's 1994
term loan agreement. This $85.0 million unsecured revolving line of credit has a
higher borrowing limit, longer term and lower interest rate, effective upon the
attainment of certain financial ratios, already partly achieved. The revolving
loan facility allows the Company to take advantage of its seasonal cash flows to
reduce debt while also providing flexibility for expansion. At February 27,
1996, approximately $42.5 million of the revolving line had been utilized in the
form of borrowings and letters of credit.

The Company's bank borrowings are at a floating interest rate of LIBOR plus
0.625%. At the present time, the Company does not have an interest rate swap or
other form of protection against increases in the floating rate but does fix the
interval of interest rate adjustment on most of its borrowings for a three- to
six-month period. The Company periodically evaluates its need for additional
protection in light of projected interest expense and borrowing levels.

In June 1996, the Company acquired certain tangible assets and tradenames
of the Becker CPA Review for $18.5 million in cash and acquired copyrights,
other intellectual property and publicity rights of the Becker CPA Review for
$17.9 million. Funds for the acquisition were provided by borrowings under the
Company's newly renegotiated revolving line of credit.

The Company believes that current balances of unrestricted cash, cash
generated from operations and, if needed, the revolving loan facility will be
sufficient to fund its operations for the foreseeable future.

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<PAGE> 20

BUSINESS

The Company, through its wholly-owned subsidiaries, owns and operates the
DeVRY Institutes and KGSM, which collectively form one of the largest private
degree-granting higher education systems in North America. The Company also owns
and operates Becker, which prepares candidates for the CPA and CMA professional
certification examinations, and CES, which provides customized, on-site
technical education and training services to corporations and government
agencies. The DeVRY Institutes were founded in 1931 and for more than 65 years
have provided a career-oriented technical education to high school graduates in
the United States and Canada. KGSM, founded in 1973, employs a faculty of
practicing business professionals to teach MBA and other master's degree
programs to working adults in the United States. The DeVRY Institutes and KGSM
are each accredited by the Commission on Institutions of Higher Education of the
North Central Association of Colleges and Schools, the same agency that
accredits other four-year publicly supported and independent colleges in the
North Central region. Becker, which was acquired by the Company in June 1996,
was founded in 1957 and has become a leading CPA review course, which is
administered nationally and internationally.

COMPANY STRATEGY

The Company's objective is to further strengthen its position as a leading
provider of high quality, career-oriented postsecondary education. The Company
seeks to achieve continued revenue and earnings growth by (i) pursuing
enrollment growth at both the DeVRY Institutes and KGSM, (ii) capitalizing on
opportunities to cross-sell and expand product offerings in the adult education
market through KGSM, Becker and CES, (iii) pursuing external growth through the
acquisition of complementary businesses, such as the Company's recent
acquisition of Becker, and (iv) further developing and implementing CES on-site
management and technical training programs for large employers. The Company
intends to achieve enrollment growth through (i) the expansion of existing
curricula to additional sites, (ii) the development of new curricula, (iii) the
development of new programs and delivery formats for part-time and evening
students and (iv) the expansion of recruiting efforts in selected regions. In
order to increase market penetration and operating leverage and to capitalize
more extensively on economies of scale realized through local marketing and
national advertising efforts, the Company plans to continue to upgrade and
expand certain existing school facilities and open new schools. The Company
believes that it is strongly positioned to capitalize on projected demographic
and market trends, including the projected increase in the number of U.S. high
school graduates, the expected increased demand for technical curricula and the
projected increase in the number of adult students entering the postsecondary
education system.

DEVRY INSTITUTES OF TECHNOLOGY

The DeVRY Institutes are located on 10 campuses in the United States and
four campuses in Canada. At the beginning of the fall 1996 semester (the second
of three semesters of the Company's 1997 fiscal year), 30,585 full and part-time
students were enrolled in the DeVRY Institutes' diploma, associate and
bachelor's degree day and evening programs in electronics, electronics
engineering technology, computer information systems, accounting, business
operations, technical management and telecommunications management, an increase
of 4.3% from the fall 1995 semester. This was the eighteenth consecutive term in
which total enrollments exceeded the prior year level.

Cumulatively, total student enrollment for the three semesters of fiscal
1996 increased by 8.6% compared with fiscal 1995. As a result of the expansions
and improvements initiated in the past several years, fiscal 1996 marks the
fifth consecutive year that total cumulative enrollment has increased from the
prior year. The DeVRY Institutes' operations accounted for approximately 93% of
the Company's revenues in fiscal 1996. In the first half of fiscal 1997, which
period for the first time included the operations of Becker, the DeVRY
Institutes' operations accounted for approximately 88% of the Company's
revenues.

The Company believes the DeVRY Institutes enjoy a number of competitive
advantages over four-year colleges and universities, two-year community colleges
and other for-profit schools, all of which are the Company's educational
competitors. These advantages include (i) career-oriented curricula developed
with

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<PAGE> 21

regular, structured employer input, (ii) the demonstrated effectiveness of its
career services activities, (iii) year-round class scheduling and (iv) its North
American brand identity, market presence and student recruitment organization,
as discussed below:

- Career-oriented curricula providing hands-on experience. The DeVRY
Institutes' curriculum development process includes ongoing research into
business trends and surveys of companies to determine the skills and
knowledge that will be required by employers into the next century. This
information results in timely curriculum upgrades, which helps ensure
that the DeVRY Institutes' graduates will be marketable to employers.

- High graduate employment rate. The DeVRY Institutes' career services
staff works closely with graduates by conducting and videotaping practice
job interviews, assisting in resume preparation, actively soliciting job
leads and developing relationships with potential and current employers
and setting up on-campus interviews. The DeVRY Institutes' use of
national advertising media also contributes to establishing the DeVRY
Institutes' favorable reputation with employers and assists in career
services efforts. These efforts have contributed to a 92% average net
graduate employment rate at the DeVRY Institutes over the past 10 years.
See "Business--Career Services."

- Year-round class scheduling. The DeVRY Institutes schedule classes
year-round, enabling students to complete four-year bachelor's degree
programs in three years. This results in a significant financial
advantage to students since they are able to enter the work force a year
earlier than if they had attended a traditional four-year institution.

- Strong student recruitment organization. The DeVRY Institutes' field
student recruiting force of approximately 250 full-time employees located
throughout the United States and Canada makes career-planning
presentations in approximately 10,000 high schools throughout North
America. The Company believes its student recruitment organization is not
easily matched by other educational entities. Many higher education
institutions are restricted to one locality and possess limited marketing
resources and therefore cannot match the national advertising and
marketing programs used by the DeVRY Institutes.

Changing demographics in the United States are expected to continue to
benefit DeVRY Institutes' enrollment. After declining through much of the 1980s
and stabilizing in the early 1990s, the number of high school graduates, which
represents a substantial portion of DeVRY Institutes' new student enrollment
each year, is projected by the U.S. Department of Education to increase without
interruption by more than 20% from a low of 2,482,000 in 1992 to over 3,000,000
by the year 2004. In addition, the Department of Education's National Center for
Education Statistics found that, in 1994, 62% of high school graduates (ages
16-24) went directly to college, up from 51% in 1975.

Recent data from the U.S. Department of Education also indicates that more
than one-third of U.S. undergraduate students are 25 years of age or older and
that these older students will continue to be a significant portion of college
enrollments in the coming years. The Company estimates that approximately 40% of
the students enrolled at its DeVRY Institutes are 25 years of age or older. To
attract the growing number of adults returning to college, the DeVRY Institutes
introduced a bachelor of science degree completion program in technical
management which focuses on business and management skills vital to career
advancement for students who already have an associate degree. Programs are
being offered on weekends in some locations to better serve the working adult.
DeVRY Institutes is also currently developing a weekend Computer Information
Systems curriculum with a shorter term length and time to completion. While this
program will be an intensive and demanding experience for students, it will
enable them to fulfill their other responsibilities during the normal work week
while still completing this program in a relatively short period of time on
weekends.

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The Company believes that the following additional factors should support
the Company's strategy to continue to increase student enrollments:

- Facility improvement and expansion. In 1991, DeVRY Institutes initiated a
facility improvement and expansion program to attract and retain an
increased student enrollment. Among the actions taken as a result of that
program are the following: renovation and expansion of the Atlanta
campus; relocation of the suburban Chicago, Dallas, Los Angeles and New
Jersey Institutes; and opening of branch or satellite campuses in Long
Beach, California, Scarborough (Toronto), Canada and Mississauga,
Ontario. In addition, a satellite of the Atlanta DeVRY Institute is
currently under construction in Alpharetta, Georgia and is scheduled to
open in July 1997.

- Integration of general and technical education. Each of DeVRY Institutes'
programs is designed to integrate general and technical education. DeVRY
Institutes' general education courses develop skills and competencies
that help graduates enhance both their professional and personal
capabilities. Laboratory courses throughout each curriculum provide the
opportunity to translate classroom learning into practical, hands-on
experience that better prepares the student for the workplace.

- Quality of faculty. More than 80% of DeVRY Institutes' U.S. regular
faculty hold advanced academic degrees. In 1996, the average compensation
for DeVRY Institutes' U.S. faculty was approximately equal to the $48,500
average salary of faculty members at state-supported four-year
institutions, as reported in a 1996 study by the College and University
Personnel Association.

- Additional learning resources. To facilitate student success, DeVRY
devotes significant resources to libraries and academic support services
which can assist students in any phase of their educational program. In
addition, the DeVRY Institutes encourage students to participate in
campus activities and offer a student success strategies course aimed at
preparing students to assume responsibility for their learning and growth
through practical strategies and methods for realizing success.

KELLER GRADUATE SCHOOL OF MANAGEMENT

KGSM offers a practitioner-based graduate management program leading to a
master's degree. In addition to the MBA program, which KGSM began offering in
1977, KGSM introduced a Master of Project Management ("MPM") degree program in
1991 and a Master of Human Resource Management ("MHRM") degree program in 1993.
KGSM is one of only a few schools in the country offering a master's degree in
project management. In September 1995, KGSM began offering a Health Services
Management ("HSM") concentration within its MBA program. The HSM concentration
includes five health services management courses within the 16 course MBA
curriculum. This program is being offered in response to the growing demands of
the health services industry and professionals in related fields such as the
insurance or pharmaceutical industries. In February 1997, KGSM introduced a
Master of Telecommunications Management ("MTM") degree program to meet the
growing demand for expertise in that field. At the start of the November 1996
term, enrollment at KGSM was 4,011, an increase of 732 students or 22.3% from
the November 1995 term.

KGSM offers classes in the evenings and on weekends and emphasizes a
practitioner orientation, excellence in teaching and service to working adults.
KGSM's curricula are regularly reviewed for relevance to both students and
employers through advisory councils composed of representatives of distinction
and achievement in business and community affairs. KGSM faculty members are
practicing professionals who bring their expertise to the classroom, emphasizing
theory and practices that will best serve students in their work as managers.
Critical competencies in areas such as business communications, technology,
quality and international issues are woven throughout the curricula.

KGSM offers five 10-week terms each year. Courses meet once a week, either
in the evening or on Saturday. This schedule allows students with heavy travel
or other demands on their time to more easily fit courses into their schedules.
In addition, the Company believes that in most markets KGSM is able to offer
greater flexibility in course scheduling, a greater choice of elective courses
and a more convenient location than its competitors.

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<PAGE> 23

From a base of six sites in Illinois and Wisconsin in 1987, KGSM classes
are now offered at 19 locations. KGSM operates five of its teaching sites on
DeVRY Institute campuses in Arizona, California, Georgia and Missouri and one
site at the Company's corporate headquarters in Oakbrook Terrace, Illinois.

BECKER CPA REVIEW

In June 1996, the Company acquired Becker CPA Review. Becker is a leading
international training firm preparing students for the CPA exam and the CMA
exam. Becker, which is headquartered in Los Angeles, offers classes at more than
140 locations in the United States and at 10 locations in the Middle East,
Pacific Rim and Canada. Becker's proprietary course materials and teaching
methods result in pass rates on the CPA exam for Becker students that are
approximately double the national average pass rate. More than one-third of all
students passing the CPA exam are Becker alumni, who now number over 200,000
since the course was founded in 1957. According to the most recently published
data by the National Association of State Boards of Accountancy, the number of
first time CPA exam takers has declined from approximately 46,100 who sat for
the 1994 exams to approximately 43,300 who sat for the exams in 1995. Although
the number of students taking the CPA exam has declined, the Company believes
that Becker provides opportunities for growth through expansion to additional
domestic and international locations, through synergies among Becker, KGSM and
DeVRY Institutes and through new products and delivery methods.

CORPORATE EDUCATIONAL SERVICES

To serve what the Company believes is a large and growing need for employee
training, CES was created in 1991. CES offers customized professional services
and training in business, project management, electronics and
telecommunications. Conducted at customers' sites, CES programs emphasize the
direct, practical application of business concepts, techniques and skills. The
operations of CES have been aligned with KGSM, allowing CES to utilize the
academic and operational infrastructure of KGSM's national system and to better
link its clients to one of the largest applications-based education and training
organizations in North America. CES draws on the faculty, staff and curriculum
resources of the DeVRY Institutes and KGSM systems as needed.

CURRICULUM

The DeVRY Institutes offer comprehensive undergraduate programs of study in
six technology-based areas--electronics, electronics engineering technology,
computer information systems, telecommunications management, accounting and
business operations--each designed to teach the technical skills required for
entry-level positions in these fields. Programs are offered in day and evening
sessions throughout the entire year, in three 15-week semesters of instruction.
Many students attend all three semesters per year on a full-time basis, which
allows them to complete their education in less time than is possible at most
other comparable degree-granting institutions.

While many of the courses relate to the chosen field of study, the degree
programs also integrate general education and business subjects such as English,
economics, history, literature, psychology and public speaking across the
curriculum. Laboratory work is a substantial component of each semester of
instruction. Typical course materials include textbooks, journal articles,
faculty-prepared outlines and articles and other materials typically used in
higher education instruction.

KGSM offers a practitioner-based graduate management program designed to
enable students to qualify for administrative and managerial jobs. The program
consists of core and advanced/elective courses. The core courses provide
functional skills in accounting, finance, marketing, quantitative methods,
information systems and business economics. Advanced courses allow students to
obtain greater depth and breadth in the core areas and to explore other areas of
interest. Advanced coursework is offered in accounting, finance, marketing,
information systems, human resources management, health services management,
telecommunications management, business planning and general management. Because
the majority of KGSM's students are adults who work full-time, KGSM classes are
offered in the evenings and on weekends in five 10-week terms during the year.

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Becker classes are conducted over a four- or five-month period ending the
week before the CPA exam is administered in May and November. CMA review
courses, which are approximately six weeks in length, are offered in May and
November. Courses are designed to be highly interactive using instructors who
work in the areas of financial accounting, auditing, tax and business law.
Instructors, who are engaged on a part-time, as-needed basis, receive
comprehensive training in applying the proprietary teaching methods that have
made these courses so successful.

CURRICULUM DEVELOPMENT AND REVIEW

The DeVRY Institutes' ability to attract and find employment for students
depends on curriculum offerings that provide students with the knowledge and
competencies sought by the business community. Given the rapid change in
technology and business, the need to educate students in the most current
applications of technology is especially critical. To meet this need, DeVRY
Institutes has established two primary vehicles for curriculum development--the
Continuous Curriculum Assessment and Improvement Process and the Standing
Programmatic Curriculum Committees.

The Continuous Curriculum Assessment and Improvement Process was developed
in response to the accelerating pace of technological and business change. This
approach allows DeVRY Institutes to reduce curriculum development cycle times
while preserving the positive values of a periodic comprehensive review of each
curriculum.

The Standing Programmatic Curriculum Committees review curriculum
suggestions synthesized from business and industrial consultant practitioners,
based on the consultants' knowledge of technology, the business environment and
the potential for employment after graduation. Recommended changes are referred
to various curriculum product managers, campus academic management and faculty
members for review prior to modification by selected faculty curriculum guide
authors under the guidance of the appropriate curriculum product manager.

The Company believes that future growth in enrollment at the DeVRY
Institutes will come, at least in part, from the development of new programs
that appeal to a diverse student population. The Company implemented bachelor's
degree programs in telecommunications management, business operations and
accounting, which have attracted more students, particularly women. The recently
introduced bachelor's degree completion program offers a bachelor's degree in
technical management to community college graduates with a technical background
and to other associate degree holders, including DeVRY Institutes' electronics
graduates. This program increases enrollment and enhances facility utilization
at the DeVRY Institutes. The Company has also introduced KGSM programs at five
DeVRY Institutes. The offering of KGSM and Becker programs, whose courses are
taught primarily in the evening and on weekends, at the DeVRY Institutes'
campuses, where the majority of classes are taught during the day, has resulted
in increased enrollment and enhanced facility utilization.

KGSM's curricula are regularly reviewed for relevance to both students and
employers. Critical competencies for today's successful managers, in areas such
as business communications, technology, ethics, quality and international
business, are woven throughout the curricula.

Becker CPA course materials are updated twice each year based upon the most
recently administered exam and newly issued accounting pronouncements.

ADMINISTRATION AND EMPLOYEES

Each DeVRY Institutes campus is managed by a president and has a staff of
academic deans, career service and student service personnel and other
professionals. Each campus also has an admissions director who reports to the
Company's vice president of admissions. Each KGSM center is managed by a center
director. The Company employs approximately 230 people, approximately 10% of its
total work force, at its corporate headquarters in Oakbrook Terrace, Illinois,
including KGSM management and staff. As of February 1997, the Company had
approximately 2,500 regular full- and part-time employees. In addition, the
Company employs approximately 1,200 students as faculty assistants and in other
part-time positions. Becker is

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managed by an administrative staff headquartered in Los Angeles and by regional
administrative staffs which support instructors and coordinate local recruiting
efforts. None of the Company's employees is represented by a union. The Company
believes that its relationships with its employees are satisfactory.

FACULTY

Each DeVRY Institutes' campus president hires faculty members in accordance
with criteria established by the Company and applicable state law. Most faculty
members teaching in technical areas have related industrial experience. Faculty
members are evaluated each semester based on student comments and observations
by an academic dean. As of February 1997, there were over 630 full-time faculty
members among all of the DeVRY Institutes' campuses. In addition, DeVRY
Institutes engaged approximately 550 part-time, adjunct and visiting faculty,
mostly in the evening programs. Approximately 80% of the DeVRY Institutes'
faculty members hold advanced academic degrees. KGSM faculty members are
practicing business professionals who are engaged by KGSM to teach on a
course-by-course basis. Less than 10% of KGSM's instructors, excluding staff
members who regularly teach, are full-time employees of KGSM. More than 90% of
KGSM's faculty have advanced degrees. For its November 1996 term, KGSM classes
were taught by over 170 faculty members. Becker's faculty, numbering nearly 500
each term, are primarily practicing professionals who teach part-time on a
course-by-course basis.

STUDENT RECRUITING

Students at the DeVRY Institutes are recruited by admissions
representatives at on-campus admissions offices and by field student recruiters.
Field student recruiters are an important nationwide element of the recruiting
process because a significant portion of the DeVRY Institutes' students come
from outside the immediate area in which the DeVRY Institute campus they attend
is located. The percentage of enrollment coming from these two recruiting
sources varies by campus but is predicated largely on each school's location.
Overall, admissions representatives currently generate over 66% of the DeVRY
Institutes' total enrollments. The DeVRY Institutes employ approximately 380
admissions representatives and field recruiters throughout the United States and
Canada. In order to recruit students in certain states and Canadian provinces,
representatives and recruiters must be licensed or authorized by the appropriate
regulatory agency. Regulations governing student participation in federal
financial assistance programs prohibit an institution from paying a commission,
bonus or incentive to the Company's representatives and recruiters based upon
their success in securing enrollments. The Company believes that its method of
representative and recruiter compensation complies with the regulations.

The admissions representatives are salaried, full-time Company employees.
They are located at each DeVRY Institutes campus and work with potential
applicants who learn of the school through the Company's advertising or by other
means. Admissions representatives generally work with older students, many of
them working adults wanting to attend class in the evening, recently unemployed
adults seeking to improve their job skills as a way to re-enter the workforce
and students transferring to DeVRY Institutes from nearby junior colleges. Each
DeVRY Institute has entered into agreements with nearby community colleges to
facilitate the enrollment of their students seeking to transfer course credits
to a DeVRY Institutes' program. Over 20% of new students recently enrolled at
the DeVRY Institutes had some prior college experience.

Field student recruiters are salaried, full-time Company employees who are
trained by both field managers and headquarters-based staff. Field student
recruiters meet individually with prospective students who are contacted
primarily through high school, club and youth group presentations. These student
recruiters visited over 10,000 high schools in North America in fiscal year
1996, making presentations on career choices and the importance of a college
education. Field recruiters also receive student inquiries generated by direct
mail and television advertising in the particular recruiter's territory.
Follow-up interview sessions with prospective students are generally held in the
student's home with the student and his or her parents. The continued downsizing
of the U.S. military and recent base closings also present recruiting
opportunities. Veterans with military-specific technical training are attracted
to DeVRY Institutes' practical career-oriented education. Numerous new students
with V.A. benefits have enrolled at the DeVRY Institutes over the past several
years.

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In support of its recruiting force, the DeVRY Institutes advertise on
television and radio, in magazines and newspapers, and utilize telemarketing and
direct mail to reach prospective students. Prospective students are also
frequently referred by their employers, alumni or currently enrolled students.
In addition to the more traditional recruiting methods, DeVRY Institutes'
Internet site provides another avenue for students to receive information and
apply for admission.

KGSM recruits students through direct mail, radio advertising,
telemarketing, print advertising and referrals from employers, alumni and
current students. KGSM employs on-campus admissions representatives at each
teaching center who meet with, counsel and evaluate admission qualifications of
prospective students.

Becker markets its courses directly to potential students and to some of
their employers (e.g., Big Six accounting firms). Alumni referrals, direct mail,
print advertising and a network of on-campus recruiters at colleges and
universities across the country generate the new students who take the CPA or
CMA review courses, which are offered twice each year. Becker enrolls many
students who have previously completed a competitor's course or a self-study
program but were unable to pass the exam.

ADMISSIONS CRITERIA

To be admitted to a DeVRY Institutes program in the United States, an
applicant must be a high school graduate, have a General Education Development
(GED) certificate or hold a degree from an accredited postsecondary institution.
In Canada, an applicant must either be a high school graduate or meet "mature
student" criteria. Applicants must also meet minimum entrance examination scores
which vary depending on the program to which they are applying. In 1996, the
DeVRY Institutes implemented a Computerized Placement Test ("CPT") designed in
collaboration with The College Board and Educational Testing Service. This exam
helps DeVRY Institutes better serve the needs of its students by allowing DeVRY
Institutes to assess students' achievement levels and developmental needs during
the admission process.

To be admitted to a KGSM program, applicants must hold a degree from a U.S.
institution that is accredited by or in candidacy status with a regional
accrediting agency. Foreign applicants must hold a degree recognized to be
equivalent to a U.S. bachelors' degree. Applicants must also achieve acceptable
scores on either the Graduate Management Admission Test (GMAT), the Graduate
Record Examination (GRE) or KGSM's alternative admission test. Admission
decisions are based on evaluation of a candidate's academic credentials,
entrance test score and personal interview.

STUDENT RETENTION

As is the case at most higher education institutions, some students at the
DeVRY Institutes end their studies for personal, financial or academic reasons.
In an effort to increase the rate of student retention, the Company has
implemented management programs by which the campus presidents and academic
deans are evaluated, in part, on the basis of the percentage of students who
complete each semester. The Company has also developed courses and supplemental
programs to assist students in their studies at the DeVRY Institutes. Among them
is an orientation course taught to students in their first semester, in addition
to their regular academic schedule, which deals with both academic and
nonacademic problems frequently encountered by students. Also, developmental
mathematics, language skills and reading comprehension courses are offered for
students whose entrance or placement exam scores indicate a need for academic
support in these areas. Most importantly, working with The College Board and
Education Testing Service, the Company has adopted a CPT that is used to screen
students and help to more accurately determine their ability to succeed and
assess their developmental needs upon admission to the DeVRY Institutes.

KGSM has established a student monitoring program to retain its students,
who are typically adults with substantial outside commitments. Under this
program, every first-, second- and third-term student at KGSM is contacted and
counseled every term about results of courses completed and recommended future
courses. Similarly, academically eligible former students who do not return for
the subsequent term are contacted and encouraged to resume their education.
Additionally, KGSM's decentralized system of small centers enables KGSM to focus
on building a personal relationship with each student.

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<PAGE> 27

TUITION AND FEES

Effective with the spring 1997 term, the DeVRY Institutes' tuition in the
United States for two semesters (one academic year) will range from $6,940 to
$7,015, an increase of approximately 5.5% from spring 1996. Variations in
tuition depend on term of enrollment. Students enrolled on less than a full-time
basis are charged somewhat lower tuition. Based upon current tuition rates, for
a student enrolled in the DeVRY Institutes' five-term electronics technician
program, total tuition cost would be $17,425. For a student enrolled in the
eight-term accounting program, total tuition cost would be $27,835. For a
student enrolled in the nine-term Electronics Engineering Technology program,
total tuition cost would be $31,305. A national survey of tuition released in
the fall of 1995 by The College Board reported that annual tuition and fee
increases adopted by publicly supported and independent four-year institutions
averaged approximately 6.0% for the 1995-96 academic year. Effective with the
spring 1997 term, tuition in Canada will increase to $6,380 (CDN) for the
two-semester period, an increase of approximately 6.0% from spring 1996. KGSM
tuition per course (four quarter credit hours) ranges from $905 to $1,110,
depending on the state in which the student is enrolled. This compares to
tuition rates from $855 to $1,050 in 1996. The price of the complete Becker CPA
review course is $1,435, which includes an enrollment fee. The price of the
complete Becker CMA review course is $1,155, which also includes an enrollment
fee. In addition to the tuition amounts described above, students at the DeVRY
Institutes and KGSM must purchase textbooks and supplies as part of their
educational program.

If a student leaves school prior to completing a term, federal, state and
provincial regulations and accreditation criteria permit the Company to retain
only a set percentage of the total tuition received from such student, which
varies with, but generally equals or exceeds, the percentage of the term
completed by such student. Amounts received by the Company in excess of such set
percentage of tuition are refunded to the student or the appropriate funding
source.

CAREER SERVICES

The Company believes that the employment of its graduating students is
essential to its ability to attract new students. At the DeVRY Institutes, there
were more than 44,400 graduates over the ten-year period ending June 1996 who
were eligible for career services assistance (i.e., excluding graduates who
continued their education, students from foreign countries not legally eligible
to work in the United States, etc.). Of the more than 42,000 graduates who
actively pursued employment or were already employed, 92.4% held positions in
their chosen fields within six months of graduation. Each DeVRY Institute has
career services staff working with students in the areas of career choice
activity, resume preparation and job interviewing. The staff also maintains
contact with local and national employers to determine job opportunities and
arrange interviews. The DeVRY Institutes have recently formed a strategic
alliance with Alternative Resources Corporation ("ARC"). ARC is a leading
provider of technical staffing, whose 50 local offices can provide DeVRY
Institutes' students with educational and career-enhancing opportunities ranging
from student internships to full-time employment opportunities in the computer
information services and telecommunications management fields for DeVRY
Institutes graduates. This alliance enhances DeVRY Institutes' ongoing career
services activity and complements the Company's commitment to providing quality
career-oriented programs in business and technology.

DeVRY Institutes attempts to gather accurate data on the number of its
graduates employed within six months following graduation in an industry or
field that relates to their education. To a large extent, the reliability of
such data is dependent on the information that graduates report to DeVRY
Institutes.

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<PAGE> 28

Full and part-time U.S. degree and diploma program graduates for the three
classes which ended in fiscal year 1996, and for the three classes which ended
in fiscal 1995, were employed in their chosen field within six months of
graduation, based on data reported to the DeVRY Institutes, as follows:

THE U.S. DEVRY INSTITUTES' GRADUATE EMPLOYMENT STATISTICS
<TABLE>
<CAPTION>
NUMBER OF GRADUATES PERCENT OF GRADUATES WHO
WHO ACTIVELY PURSUED NUMBER OF GRADUATES ACTIVELY PURSUED AND OBTAINED
NUMBER OF NET EMPLOYMENT OR WERE EMPLOYED IN EDUCATION- EMPLOYMENT AND THOSE WHO
GRADUATES(1) ALREADY EMPLOYED(2) RELATED POSITIONS WERE ALREADY EMPLOYED(2)
------------- -------------------- ---------------------- -----------------------------
<S> <C> <C> <C> <C>
Fiscal 1996
Graduating Classes
(10/95, 2/96,
6/96)................ 4,154 4,075 3,910 96.0%
Fiscal 1995
Graduating Classes
(10/94, 2/95,
6/95)................ 4,129 4,018 3,837 95.5%

PERCENT OF
NET GRADUATES
EMPLOYED(1)
-------------
<S> <C>
Fiscal 1996
Graduating Classes
(10/95, 2/96,
6/96)................ 94.1%
Fiscal 1995
Graduating Classes
(10/94, 2/95,
6/95)................ 92.9%
</TABLE>

- -------------------------
(1) Net graduates exclude students continuing their education, students from
foreign countries who are legally ineligible to work in the United States
and students ineligible for employment because of extreme circumstances.

(2) Does not include students who actively pursued employment for less than six
months and did not obtain employment.

The majority of employers of the DeVRY Institutes' graduates are in the
electronics or information processing industries. The Company believes that no
single employer has hired more than 5% of the DeVRY Institutes' graduates in
recent years. Major employers of the DeVRY Institutes' graduates include the
following companies: Andersen Consulting, Applied Materials, AT&T, Cellular One,
Eastman Kodak, EDS, General Electric, IBM, INTEL, Motorola and Sprint.

KGSM maintains a career services office to assist current and past
graduates. This office offers a full range of services designed to enhance each
individual's career development skills and is available to graduates, at no
charge, on a lifetime basis.

OTHER STUDENT SERVICES

The DeVRY Institutes also provide the following student services:

Student activities. DeVRY Institutes' students can participate in a wide
range of activities and organizations. Professional organizations that are
active at many of the DeVRY Institutes include the Institute of Electrical and
Electronics Engineers, the Data Processing Management Association, the
Instrument Society of America and several professional fraternities. In
addition, the DeVRY Institutes provide curriculum-related organizations, such as
computer and ham radio clubs and a variety of intramural sports.

Housing. While the DeVRY Institutes do not own any student housing, the
DeVRY Institutes provide referral housing and rent directly or guarantee rents
on apartments, including fully furnished units, for students who want to attend
a DeVRY Institute but do not live in the area.

Advising. Students at each of the DeVRY Institutes are assisted with
problems relating to coursework, career plans, the financing of their education
and other personal matters. Each campus has a new student coordinator to assist
out-of-town students prior to the first day of class. Faculty members also meet
with students to discuss any problems the students may be having in their
coursework.

Part-time employment. The DeVRY Institutes Student Employment Office helps
students find part-time work while they are attending school. The majority of
DeVRY Institutes' students work part-time; however, many part-time jobs are not
in students' career fields because such positions can often only be filled by
individuals who have completed the required specialized education. DeVRY
Institutes' career services staff help upper-term students find career-related
part-time jobs through the Cooperative Education ("Co-op")

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<PAGE> 29

Program. Co-op positions are limited in number and are generally available only
to students with above-average academic records.

On-campus jobs. The DeVRY Institutes employ approximately 1,200 students on
campus as faculty assistants and in various other positions. Some of these jobs
utilize skills which involve the students' fields of study.

ACCREDITATION AND APPROVALS

Accreditation is a process for recognizing educational institutions and the
professional programs offered by those institutions for a level of quality that
entitles them to the confidence of the educational community and the public they
serve. In the United States, this recognition is extended primarily through
nongovernmental, voluntary, regional or specialized accrediting associations.
Accredited institutions are subject to periodic review by accrediting bodies to
ensure that these institutions maintain the level of performance, evidence
institutional and program improvement, demonstrate integrity and fulfill
requirements established by the accrediting body.

Although regional accreditation in the United States is a voluntary process
designed to promote educational quality and improvement, it is an important
strength of the DeVRY Institutes, providing significant advantages over most
other for-profit colleges. College and university administrators depend on the
accredited status of an institution in evaluating transfers of credit and
applications to graduate schools. Employers rely on the accredited status of an
institution when evaluating a candidate's credentials, and parents and high
school counselors look to accreditation for assurance that an institution meets
quality educational standards. Moreover, accreditation is necessary for students
to qualify for eligibility for federal financial assistance. Also, most
scholarship commissions restrict their awards to students attending accredited
institutions.

The DeVRY Institutes and KGSM are each accredited by the Commission on
Institutions of Higher Education of the North Central Association of Colleges
and Schools, the same agency that accredits other four-year publicly supported
and independent colleges and universities in the North Central region. The DeVRY
Institutes and KGSM accreditations were last reaffirmed by the North Central
Commission in 1992 for the maximum 10-year period. An interim progress
monitoring visit is scheduled for the DeVRY Institutes in May 1997.

Accreditations of the DeVRY Institutes and KGSM in the United States and of
the DeVRY Institutes in Canada are as follows:

UNITED STATES
---------------------------------------------------

- - Commission on Institutions of Higher Education of the North Central
Association of Colleges and Schools

- - Technology Accreditation Commission of the Accreditation Board for Engineering
and Technology (DeVRY's Electronics Engineering Technology Bachelor of Science
Degree program and, at the New Jersey campus, the Electronics Engineering
Technology Associate in Applied Science Degree program)
CANADA
---------------------------------------------------

- - Canadian Technology Accrediting Board (DeVRY/Calgary's Electronics Engineering
Technology and Electronics Engineering Technician programs)

In Canada, the Company is also in the process of seeking re-affirmation of
its accreditation from the Canadian Technology Accrediting Board for its
Toronto-area campuses' Electronics Engineering Technology and Electronics
Engineering Technician programs.

In the United States, each DeVRY Institute is approved to grant associate
and bachelor's degrees by
the respective state where it is located. In New Jersey, however, authorization
is only at the associate degree
level for three programs--electronics engineering technology, computer
information systems and

28
<PAGE> 30

telecommunications management. Students at the DeVRY Institute, North Brunswick,
are encouraged, upon completion of their associate degrees, to transfer to other
DeVRY Institutes to complete bachelor's degree requirements.

In June 1996, the New York Board of Regents Commission on Higher and
Professional Education voted to grant permission to establish a DeVRY
Institutes' campus in the New York City area with authority to grant certain
bachelor's and associate degrees. The Company has begun a search for an
appropriate facility for this campus.

Under current Canadian law, the Canadian DeVRY Institutes are not permitted
to grant degrees. However, students at the Canadian Institutes are allowed to
transfer to DeVRY Institutes in the United States to complete their degree
requirements. In 1995, the Alberta Department of Advanced Education, the State
of Arizona and the Commission on Institutions of Higher Education of the North
Central Association of Colleges and Schools approved the DeVRY Institute in
Phoenix to offer its bachelor of science degree-completion program on the
Calgary campus. This allows students attending classes at the Calgary campus to
complete their degree studies without relocating to a campus in the United
States. Students attending one of the Toronto-area campuses may transfer to
Calgary to participate in this program rather than transferring to a campus in
the United States.

KGSM is authorized to operate and award degrees under authority of the
Illinois Board of Higher Education, the Georgia Nonpublic Postsecondary
Education Commission, the Wisconsin Educational Approval Board, the Arizona
State Board for Private Postsecondary Education, the Missouri Coordinating Board
for Higher Education, the California Council for Private Postsecondary and
Vocational Education and the Virginia Council of Higher Education.

STATE AND PROVINCIAL APPROVAL AND LICENSING

Authorizations from state or provincial licensing agencies or ministries
are required to recruit students, operate the Company's schools and grant
degrees. Many states and provinces require for-profit postsecondary education
institutions to post surety bonds for licensure. The Company has posted
approximately $4.3 million of surety bonds with state and local regulatory
authorities and approximately $1.0 million (CDN) of surety bonds with regulatory
agencies in Canada and believes it is currently in material compliance with
state and Canadian provincial regulations. Certain states have set standards of
financial responsibility beyond those prescribed by federal regulation. For
example, fiscal tests adopted by the California legislature (as discussed more
fully below) and similar regulations adopted or proposed by other state
regulators may place the Company in future non-compliance under certain state
regulations. If the Company were unable to meet these tests and could not
otherwise demonstrate that it was financially responsible, it could be required
to cease operations in a particular state. To date, the Company has successfully
demonstrated its financial responsibility where required.

In January 1991, the State of California adopted legislation that requires
private, postsecondary educational institutions to meet certain fiscal tests in
order to continue operating in the state. These fiscal tests include three
requirements: (i) not having an operating loss in each of an institution's two
most recent fiscal years; (ii) having positive net worth in its latest fiscal
year; and (iii) maintaining a ratio of current assets to current liabilities of
1.25:1 or greater. The Company has achieved two of the required fiscal tests but
has not maintained the ratio of current assets to current liabilities of 1.25:1,
because the Company believes that maintaining such a ratio would be an
inefficient use of its assets. At June 30, 1996, the Company had a ratio of
current assets to current liabilities of 1.17:1. The California Council for
Private Postsecondary and Vocational Education (the "California Council") also
has discretion under this statute to allow an educational institution to
continue operating, even if it does not satisfy the financial tests, if the
institution can demonstrate that it has maintained sufficient financial
resources to sustain all of its promised educational services. The Company
believes that at June 30, 1996 it had satisfactorily demonstrated to the
California Council its financial strength and ability to continue to operate. In
connection with granting authority for continued operations, California law also
requires an on-site visit to all postsecondary institutions having accreditation
from a regional accrediting association other than the Western Association of
Colleges and Schools. The California Council

29
<PAGE> 31

conducted a visit to the California campuses in August 1996 and recently issued
its report, granting approval for continued degree-granting operation for the
maximum five-year period.

FINANCIAL AID AND FINANCING STUDENT EDUCATION

Students attending the DeVRY Institutes finance their education through a
combination of family contributions, individual resources (including earnings
from full- or part-time employment), financial aid (including Company-provided
financial aid) and tuition reimbursement from their employers. The recent
temporary restoration of the tax exemption for undergraduate education employer
tuition reimbursement is a benefit to some DeVRY Institutes students, mainly
those working adults attending its part-time evening programs who receive
partial or full tuition reimbursement.

The Company believes that approximately 79% of the U.S. DeVRY Institutes'
students receive some government-sponsored financial aid and that a similar
percentage of the students attending the Canadian DeVRY Institutes receive some
government-sponsored financial assistance. The Company believes that between 10%
and 15% of KGSM's students receive some government-sponsored financial aid. In
addition, a substantial number of KGSM students receive tuition reimbursement
from their employers. Students attending the Becker CPA or CMA review courses
are not eligible for financial aid but many of them receive partial or full
tuition reimbursement from their employers.

The DeVRY Institutes assist their undergraduate students in locating
part-time employment. Data from the National Center for Education Statistics
indicates that in 1993, almost half of all full-time college students between
the ages of 16 and 24 were employed. The Company believes that a substantially
greater percentage of its full-time students are employed to help finance their
costs of education.

On the basis of a financial aid application completed by the student and
the student's family, the DeVRY Institutes develop an assistance package for
students who require financial aid. Government-sponsored financial aid is of
great importance to the Company because approximately 68% of the DeVRY
Institutes' U.S. tuition, book and fee revenues collected in fiscal 1996 were
dependent on some form of such financial aid received by its students. In fiscal
1995, approximately 69% of revenues collected were dependent on financial aid.

Extensive and complex regulations in the United States and Canada govern
all of the government grant, loan and work programs in which the Company and its
students participate. Regulations and standards that an institution must satisfy
in order for its students to participate in federal financial assistance
programs include, among others, maximum student loan default rates; limits on
the proportion of an institution's revenue that can be derived from federal aid
programs; financial responsibility and administrative capability requirements;
and prohibition of certain types of incentive payments to student recruiters. At
June 30, 1996, the Company achieved an operating profit, positive net worth, a
"quick ratio" (cash plus accounts receivable to all current liabilities) in
excess of the federal minimum of 1:1 and maintained the required cash reserve
for the payment of refunds. This fully satisfied the standards of financial
responsibility established by the U.S. Department of Education for participation
in federal financial assistance programs. Similarly, the Company fully satisfied
the standards of financial responsibility at June 30, 1995 and 1994. Failure to
achieve these standards or otherwise demonstrate, in conformity to the
regulations, its ability to continue to provide the educational services it
offers could result in the Company being required to post a surety bond to
permit its students to continue to participate in federal financial assistance
programs.

The Company maintains a staff at its Oakbrook Terrace headquarters to
review, interpret and establish procedures for compliance with these
regulations. Because U.S. financial assistance programs are required to be
administered in accordance with the standard of care and diligence of a
fiduciary, any regulatory violation

30
<PAGE> 32

could be the basis for the initiation of a suspension, limitation or termination
proceeding against the Company. In addition, changes in or new interpretations
of applicable laws, rules or regulations could have a material adverse effect on
the Company in the future. Although the Company has no reason to believe that
any proceeding against the Company is presently contemplated, if such a
proceeding were initiated against the Company and resulted in a substantial
curtailment of the Company's participation in government grant or loan programs,
the Company could be materially adversely affected.

In the United States, the Company has completed and submitted all required
audits of compliance with federal financial assistance programs. The Department
of Education conducted a site visit in August 1996 at the DeVRY Institutes'
North Brunswick, New Jersey, campus as a part of its program of periodic review
of the administration of student financial assistance programs. The visit was
satisfactorily concluded without further follow-up or action.

DeVRY Institutes' Toronto-area campuses were notified at the end of August
1995 that the Ontario Ministry of Education and Training had temporarily
suspended the processing of new financial aid applications from DeVRY
Institutes' students pending review of inaccuracies found in applications filed
by some students. The Ministry believed that some of DeVRY Institutes'
Toronto-area students applied for and collected what might be excessive
government-sponsored financial aid by inappropriately reporting that they had
"zero income." A Ministry audit of the administration of financial aid at DeVRY
Institutes' Toronto area campuses, with the Company's full cooperation, began in
September 1995 and is still in progress. In order to restore financial aid
eligibility, the Company refunded to the Ministry approximately $1.7 million
(CDN) for the 1995-1996 academic year, which the Company believes is
substantially all of the financial aid previously inappropriately disbursed to
such "zero income" students for this time period, and posted a letter of credit
for $2.0 million (CDN) against possible additional amounts that may have been
inappropriately disbursed, as determined by the Ministry audit. Effective with
the spring 1996 term, which began in March 1996, the Ministry conditionally
reinstated approval for the processing of financial aid applications. As a
consequence, results of operations for the Company's Canadian operations were
materially adversely affected. See Note 9 to the Consolidated Financial
Statements. Full unconditional reinstatement is subject to the Ministry
appointed auditor's completion of its audit and verification of the Company's
compliance with financial aid processing regulations.

The following is a description of the U.S. and Canadian financial aid
programs in which the Company's students participate:

United States Government Financial Aid Programs

The following U.S. Department of Education financial aid programs under
Title IV of the Higher Education Act are utilized by the Company's students in
the United States: (i) Federal Pell Grants ("Pell"), (ii) Federal Supplemental
Educational Opportunity Grant ("SEOG"), (iii) Federal Family Education Loan
Program ("FFELP"), (iv) Federal Perkins Direct Student Loan program ("Perkins"),
(v) Federal Work Study ("FWS") and (vi) William D. Ford Federal Direct Student
Loan Program ("FDSL").

Grants. Grants are funds made available by the government to eligible
students who demonstrate financial need. Grants do not have to be repaid.
Some of the Company's students are eligible to participate in the Pell and
SEOG grant programs, which are programs for undergraduate students.
Eligible students receive a Pell grant ranging in amount from $400 to
$2,470 per year. SEOG is a supplement to the Pell grant, available to only
the neediest students because SEOG funds are limited in amount at each
institution based upon a federally determined formula. In addition to these
federal assistance funds, DeVRY Institutes is required to make a 25%
institutional matching contribution of all SEOG funds disbursed. The
institutional matching contribution may be satisfied, in whole or in part,
by the DeVRY Institutes scholarship funds, discussed separately in this
section, or by externally provided scholarship grants.

Loans. Students at the DeVRY Institutes participate in the Stafford
and PLUS programs within the FFELP and in the Perkins loan program.
Stafford loans may include an interest subsidy depending upon the financial
need of the student, and loan repayment is scheduled to begin six months
after a student no

31
<PAGE> 33

longer attends school on at least a half-time basis. In 1996, over 80% of
the financial aid received by students attending the Company's U.S. DeVRY
Institutes was provided by federal student loans. Students at KGSM
participate in FDSL, which represents 100% of the Federal financial aid
received by these students.

In 1993, Congress passed legislation creating the new Direct Student
Loan Program. Under this program, students may complete all loan
application and processing steps at their educational institution. Besides
the benefit of one-stop processing, which can be done at the institution in
conjunction with the application for aid under other programs, this loan
program offers other benefits to student borrowers such as income-based
repayments, lower loan fees and lower loan interest rates. For the 1994-95
school year, the DeVRY Institute Addison was one of only 104 institutions
in the nation chosen by the Department of Education to pilot the
implementation. For the 1995-96 school year, four additional DeVRY
Institutes and KGSM were chosen for participation. The U.S. Congress has
considered various proposals to eliminate this program or to cap loans made
under this program at some percentage of all federal student loans until
there is more experience with its success and realized cost savings.

Work Study. FWS wages are 75% paid from federal funds and 25% from
qualified employer funds. Work opportunities, both on or off-campus, under
FWS are offered on a part-time basis by the U.S. DeVRY Institutes to
undergraduate students who demonstrate financial need.

State Financial Aid Programs

State grant assistance may be received by eligible students attending DeVRY
Institutes in Arizona, California, Georgia, Ohio and New Jersey.

Canadian Government Financial Aid Programs

Canadian students, other than students from Quebec, are eligible for loans
under the Canada Student Loan Plan, which is financed by the Canadian government
but administered at the provincial level. Canadian Student Loans are available
to students who are Canadian citizens or a permanent resident of Canada enrolled
at approved postsecondary institutions. Students from Quebec are eligible for
loans under the Quebec Student Loan Plan. The loans are interest-free while the
student is in school and repayment begins six months after the student leaves
school. All other forms of government financial aid in Canada, both loans and
grants, are financed and administered by the provinces.

Company-Provided Financial Assistance

The Company's EDUCARD Plan is available to students attending the U.S.
DeVRY Institutes. The EDUCARD Plan is an installment loan program designed to
assist students unable to completely cover educational costs with student and
family contributions, federal and state grants and loans. The installment loan
feature of the EDUCARD Plan is available to a student only after other student
financial assistance has been applied toward the payment of tuition, books and
fees and is available only for those purposes. Repayment of EDUCARD Plan
balances is worked out in accordance with the financial circumstances of the
particular student, but is typically on a monthly basis with all balances
required to be paid within 12 months following a student's graduation or
termination of study. The receivable balance related to Company-provided
financial aid at the U.S. DeVRY Institutes at June 30, 1996, the end of the most
recently completed fiscal year, was approximately $10.8 million. Improved
timeliness in financial aid processing and the collection of student-owed
balances maintained this receivable at approximately the same amount owed by
students at June 30, 1995 under the EDUCARD Plan, although the number of
enrolled students and tuition revenues increased from the prior year. Amounts
owed by students under the EDUCARD Plan are subject to a monthly interest charge
of 1.0% of the average outstanding balance.

In addition to the student financial assistance provided by the EDUCARD
Plan, the DeVRY Institutes Scholarship Competition annually offers merit-based
scholarships. The U.S. DeVRY Institutes offered 30 full-tuition and 90
half-tuition scholarships to 1995/96 high school graduates. Each scholarship
covers the application fee and tuition for one of DeVRY Institutes' degree
programs. The total value of these

32
<PAGE> 34

scholarships was over $2.0 million. Similar scholarship offers have been made to
high school graduates in previous years and are expected to be offered in the
future. To attract students who attend community or junior colleges, the U.S.
DeVRY Institutes annually offers 36 half-tuition scholarships, valued at more
than $500,000, to students who graduated from an accredited community/junior
college in 1994 or later. In Canada, the DeVRY Institutes annually offers 7
full-tuition and 14 half-tuition scholarships valued at more than $300,000 (CDN)
to high school graduates. The DeVRY Institutes have also provided funds in the
form of institutional grants which help students most in need of financial
assistance.

85/15 RULE

The "85/15 Rule" affects only for-profit postsecondary institutions, such
as the Company. Under this federal regulation, students attending a for-profit
institution that derives more than 85% of its revenues from federal financial
assistance programs in any year will not be able to participate in these
programs for the following year. This regulation is commonly referred to as the
85/15 Rule. Each of the campuses of DeVRY Institutes (except for the Long Beach,
California Institute, which currently operates as an additional location of the
Pomona, California, Institute) and KGSM is established as a separate institution
under the HEA provisions and must separately meet the criteria for the 85/15
Rule and for loan default rates. In fiscal 1995, the U.S. DeVRY Institutes
derived approximately 69% of its revenues from these defined federal assistance
programs. In fiscal 1996, DeVRY Institutes derived approximately 68% of its
revenues from these programs and no institute within the DeVRY Institutes'
system derived more than 78% of its revenues from these programs.

STUDENT LOAN DEFAULTS

The Company believes that in 1996, federal student loans represented more
than 80% of the federal aid received by students at the U.S. DeVRY Institutes
and 100% of the federal aid received by students at KGSM. A substantial majority
of these student loans is provided under the FFELP and FDSL programs. For a
variety of reasons, high student loan default rates on federal student loans are
most often found in proprietary institutions, institutions having large minority
populations and community colleges, all of which tend to have a higher
percentage of low income students enrolled than do four-year publicly supported
and independent colleges and universities. In 1989, the U.S. Department of
Education instituted strict regulations that penalize educational institutions
with high student loan default rates. These regulations were further tightened
by the 1992 HEA. Any individual institution with a FFELP or FDSL cohort default
rate ("cohort default rate") exceeding 20% for the year is required to develop a
default management plan meeting specified federal standards in order to reduce
defaults, although the institution's operations and its students' ability to
utilize student loans are not restricted. Due to the recent introduction of the
FDSL program, no default rates for this program have yet been reported. Any
individual institution with a cohort default rate of 25% or more for three
consecutive years is ineligible for participation in these loan programs and
cannot offer student loans administered by the U.S. Department of Education for
the fiscal year in which the ineligibility determination is made and for the two
succeeding fiscal years. In addition, students attending an institution whose
cohort default rate has exceeded 25% for three consecutive years will be
ineligible for Pell grants. Any institution with a cohort default rate of 40% or
more in any year is subject to immediate limitation, suspension or termination
proceedings from all federal aid programs. No DeVRY Institute has ever had a
cohort default rate of 25% or more for three consecutive years nor a cohort
default rate of 40% or more in any one year.

The Company carefully monitors its students' loan default rate. To help
reduce student loan default rates, the Department of Education requires that all
educational institutions wait 30 days before disbursing funds to first-time,
first-year undergraduates to prevent potential early-term dropouts from
defaulting on their loans. Students who leave school in the early part of their
educational program typically default on their loans at a higher rate than those
students who remain and complete the course. Another significant factor in
controlling student loan default rates is the servicing and collection efforts
by lenders and guaranty agencies. The Company assists the efforts of these
lenders and agencies by contacting its students who are delinquent in their loan
repayments and advising them of their responsibilities and rights to deferments
or collection forbearance if they are eligible. According to reports by the U.S.
Department of Education, the Company's schools had cohort default rates for 1994
(the latest year for which statistics are available) ranging from 1.5% to 25.1%.

33
<PAGE> 35

The Company's systemwide cohort default rate was approximately 17.6% for 1994.
The reported rates for 1994 reflect the proportion of former students who were
due to begin repaying their loans during that year but who were in default by
the end of 1995. For 1993, the Company's weighted average cohort default rate
was 18.6%. Cohort default rates are subject to revision by the Department of
Education as new data becomes available and are subject to appeal by schools
contesting the accuracy of the data. Upon review of the calculations of the
cohort default rates for DeVRY Institutes, the Company discovered errors and
exceptions. The Company has requested that the Department of Education
recalculate the cohort default rate for 1994.

Only one of the DeVRY Institutes had a cohort default rate greater than 20%
for 1994. That Institute, whose cohort default rate was reported at 25.1% has
initiated a default management plan and has requested that the Department of
Education recalculate its cohort default rate based upon its belief that
erroneous data was included and resulted in an overstatement of the reported
cohort default rate. This same Institute had a cohort default rate of 26.6% for
1993 and a cohort default rate of 22.5% for 1992. If this Institute were to have
a cohort default rate above 25.0% for fiscal 1995 (preliminary results for which
are expected to be available in spring 1997), this Institute would lose its
eligibility to participate in student loan programs and the Pell grant program.
Default rate reduction initiatives are underway at each Institute. No DeVRY
Institute is currently subject to any restrictions or termination under these
student loan programs.

Students who attend the U.S. DeVRY Institutes also participate in the
Federal Perkins loan program. This program provides low interest educational
loans to students who demonstrate exceptional need. Funding for this program is
provided, in part, by the Department of Education and, in part, by the
participating institution. As loans are repaid, the principal and interest from
these repayments is returned to the pool of funds available for future loans to
students at that institution. The program, including the responsibility for
collection of outstanding loans, is administered by the institution. Any
institution with a Perkins loan cohort default rate exceeding 15% must establish
a default reduction plan. Any institution with a Perkins loan cohort default
rate between 20% and 30% will receive a reduced annual federal contribution to
the program. If the Perkins loan cohort default rate exceeds 30%, the
institution will not receive any new federal contribution to the program.
However, new loans to eligible students may continue to be made from the pool of
funds created by monthly repayments on previous loans. The DeVRY Institutes
reported Perkins loan default rates for 1995 (the latest year for which
statistics are available) ranging from 15.6% to 34.0%. The U.S. DeVRY Institutes
weighted average Perkins loan cohort default rate was 25.9%. For 1994, the
Perkins loan cohort default rates ranged from 10.8% to 27.0% and the U.S. DeVRY
Institutes weighted average Perkins loan cohort default rate was approximately
20.5%. A portion of the increase in the 1995 default rates results from
regulatory changes in the default rate calculation which now includes as
defaults some loans previously considered to be not in default. For 1996, the
Company expects that some of these calculation revisions will be rescinded
resulting in lower reported default rates. Student counseling and additional
collection efforts are being implemented to reduce these default rates.

SEASONALITY

The Company's business is somewhat seasonal, varying according to the
enrollment periods throughout the year. Highest enrollment and revenues at the
DeVRY Institutes and KGSM typically occur during the fall back-to-school period
which corresponds to the second and third quarters of the Company's fiscal year.
Slightly lower enrollment is experienced in the spring and the lowest enrollment
occurs during the summer months. Becker experiences higher enrollments for its
courses beginning in June and July leading to the fall CPA exam than for its
courses beginning in December and January leading to the spring CPA exam.

Results of operations reflect this seasonal enrollment pattern and the
pattern of student recruiting activity costs that precede the start of every
term. Revenues, income before interest and taxes and net income by quarter for
each of the past two fiscal years are included in Note 10 to the Consolidated
Financial Statements.

TRADEMARKS AND SERVICE MARKS

The Company uses a number of trademarks, including "DeVRY Institute of
Technology," "Becker CPA Review" and variants thereof. All trademarks, service
marks and copyright registrations associated with the

34
<PAGE> 36

business are registered in the name of the Company or one of its subsidiaries
and expire over various periods of time. The Company vigorously defends against
infringements of its trademarks, service marks and copyrights.

COMPETITION

The postsecondary education market, composed of approximately 7,000
universities, colleges and schools, is highly fragmented and competitive with no
single institution having a significant market share. The Company believes that
it is one of the largest private, degree-granting, regionally accredited, higher
education school systems in North America. The DeVRY Institutes compete with
traditional publicly supported and independent two-year and four-year colleges,
other for-profit schools and alternatives to higher education, such as
employment and military service. Publicly supported colleges may offer programs
similar to those of the DeVRY Institutes at a lower tuition level due to
government subsidies, government and foundation grants, tax-deductible
contributions and other financial sources not available to for-profit schools.
Tuition at independent not-for-profit institutions is, on average, higher than
the tuition at the DeVRY Institutes. Other for-profit schools offer programs
that compete, to a limited extent, with those of the DeVRY Institutes. According
to Company surveys of prospective students, the most common alternative to
attending a DeVRY Institute is attending a four-year college. Other frequently
cited alternatives are keeping or seeking a full-time job, attending another
career-oriented school or joining the military.

KGSM competes with other MBA programs offered in all markets in which it
has operations. In the Chicago area, there are currently over 20 MBA programs.
Nationwide there are more than 700 graduate business programs. Competition with
KGSM's MHRM program varies by the market area in which it is offered but is
generally more moderate than competition for the MBA program. KGSM is one of
only a few schools in the country offering a master's degree in project
management, but increasing interest in this field is beginning to attract
similar offerings.

Becker competes with CPA exam preparation through self-study, with courses
offered by colleges and universities and with other training companies, most of
which operate on a local or regional basis, although at least one training
company competitor operates nationally. Courses offered by competitors generally
have a lower total course cost to help attract students. Becker differentiates
itself from its competitors by providing more classroom hours of instruction,
extensive and constantly updated review and practice test materials and
experienced, qualified instructors for each area of specialty included in the
exam. The high success rate of students who take the Becker review course and
the numbers of students enrolling after taking other review courses but not
passing the CPA exam is testimony to the quality and value of the Becker
methodology.

CES competes with individual consultants, colleges, industry associations,
other training companies and the internal training departments of many large
potential corporate customers and government agencies. CES, utilizing KGSM's
national system and drawing on the DeVRY Institutes, differentiates itself in
the marketplace through the applied curriculum expertise of both KGSM and the
DeVRY Institutes, particularly in the areas of project management, electronics
and telecommunications. Materials are derived from the proven instructional
success in these topics at the DeVRY Institutes and KGSM, modified as necessary
using the academic resources of both.

PROPERTIES

DeVRY Institutes

The DeVRY Institutes' campuses are located in both suburban communities and
urban neighborhoods. They are generally easily accessible to major
thoroughfares. Each campus includes teaching facilities, admissions and
administrative offices. Teaching facilities are housed in modern,
air-conditioned buildings that include classrooms, laboratories, libraries,
bookstores and student lounges. Electronics laboratories include PC-based
instrumentation and microprocessor development/circuit simulation systems, along
with traditional oscilloscopes, digital multimeters, power supplies, signal
generators and other equipment. Computer laboratories include both stand-alone
and networked PC-compatible workstations that support all curricula areas.
Resources available to students include access to a central mainframe owned and
operated by a third party,

35
<PAGE> 37

UNIX and numerous software packages supporting a variety of business,
engineering and scientific applications. Connections to the Internet and World
Wide Web are included through the computer laboratories as a part of the program
curriculum. Telecommunications laboratories provide central office simulation,
PBX administration, inter-networking and teaching LAN environments.

None of the six DeVRY Institute campuses owned by the Company is subject to
a mortgage or other indebtedness.

In June 1996, the DeVRY Technical Institute in Woodbridge, N.J., moved to a
new, 97,000 square foot company-owned facility in North Brunswick, N.J., in
advance of the summer term.

In July 1996, the Company began operation of a satellite campus in
Mississauga (Toronto), Ontario, Canada. Opened in 42,000 square feet of space,
this is the second satellite to the main campus operation in North York
(Toronto) and the fourth DeVRY Institute in Canada.

The table below sets forth certain information regarding each of the
properties at which the DeVRY Institutes conduct educational operations:

DEVRY INSTITUTE CAMPUSES

<TABLE>
<CAPTION>
AREA (APPROXIMATE FULL AND PART-TIME STUDENTS
SQUARE FEET) ATTENDING FALL 1996 OWNERSHIP
----------------- --------------------------- ---------
<S> <C> <C> <C>
Decatur (Atlanta), Georgia.................. 107,500 3,108 Owned
Chicago, Illinois........................... 104,850 3,196 Owned
Addison (Chicago), Illinois................. 91,600 3,466 Leased
Columbus, Ohio.............................. 106,480(1) 2,643 Owned
North Irving (Dallas), Texas................ 95,250 2,420 Leased
Kansas City, Missouri....................... 74,500 2,130 Owned
Phoenix, Arizona............................ 120,200 2,854 Owned
Pomona (Los Angeles), California............ 100,500 3,037 Leased
Long Beach (Los Angeles), California........ 98,240 1,366 Leased
North Brunswick, New Jersey................. 97,470 2,918 Owned
Calgary, Alberta, Canada.................... 42,900 1,350 Leased
North York (Toronto), Ontario, Canada....... 51,690 1,023 Leased
Scarborough (Toronto), Ontario, Canada...... 35,400 709 Leased
Mississauga (Toronto), Ontario, Canada...... 42,300 365 Leased
-------
30,585
=======
</TABLE>

- -------------------------
(1) Includes 14,400 square feet of modular buildings.

The Company placed a deposit in escrow to purchase a parcel of land in the
San Fernando Valley, California, for the construction of a third campus in the
Los Angeles area. Completion of the purchase is dependent upon, among other
things, obtaining zoning of the property for campus use.

In Alpharetta (Atlanta), Georgia, the Company is completing the
construction of a build-to-suit, leased campus in that suburb. The facility,
planned at 65,000 square feet, is expected to open for classes in July 1997.

In Calgary (Alberta) Canada, the Company has signed a lease for a
build-to-suit campus to replace its current site beginning with the summer 1998
term.

The Company has signed a letter of intent for the purchase of a parcel of
land in the San Francisco area for construction of a campus to serve the
Northern California area. In New York, a search is underway for an existing
building that can be renovated to the Company's specifications for operation in
the New York City area.

36
<PAGE> 38

KGSM

KGSM centers include teaching facilities, admissions and administrative
offices. The centers are housed in modern, air conditioned buildings whose
locations were chosen for their convenience to students. KGSM centers range in
size from approximately 3,600 to 9,000 square feet.

In the spring of 1996, KGSM opened a new center in Tysons Corner, Virginia
(Washington, D.C. area).

In the fall of 1996, KGSM opened a center at the Company's corporate
headquarters location in Oakbrook Terrace, Illinois. This is the seventh center
in the Chicago area and the nineteenth center in the system. The downtown
Chicago center relocated to a new and larger facility in the downtown Chicago
area in fall 1996 to permit increased enrollment at this location.

In January 1997, KGSM signed a lease for space in Irvine, California, to
accommodate its twentieth center scheduled to open in April 1997.

The table below sets forth certain information regarding each of the
properties at which KGSM conducts educational operations:

KGSM CENTERS

<TABLE>
<CAPTION>
PART-TIME
STUDENTS
NOVEMBER 1996 OWNERSHIP
------------- ---------
<S> <C> <C>
Chicago, Illinois........................................... 435 Leased
Schaumburg, Illinois........................................ 397 Leased
Downers Grove, Illinois..................................... 310 Leased
Lincolnshire, Illinois...................................... 378 Leased
Orland Park, Illinois....................................... 185 Leased
Elgin, Illinois............................................. 173 Leased
Oakbrook Terrace, Illinois.................................. 142 Leased(1)
Milwaukee, Wisconsin........................................ 225 Leased
Waukesha, Wisconsin......................................... 195 Leased
St. Louis, Missouri......................................... 107 Leased
Kansas City, Missouri (downtown)............................ 167 Leased
Kansas City, Missouri....................................... 147 (2)
Phoenix, Arizona............................................ 135 (2)
Mesa, Arizona............................................... 173 Leased
Decatur, Georgia............................................ 188 (2)
Atlanta, Georgia............................................ 280 Leased
Pomona, California.......................................... 153 (2)
Long Beach, California...................................... 116 (2)
Tysons Corner, Virginia..................................... 105 Leased
-----
4,011
=====
</TABLE>

- -------------------------
(1) Company headquarters.

(2) Operates on a DeVRY Institutes' campus.

Becker

Becker is headquartered in leased offices in Encino, California. Classes
are conducted in leased facilities, less than 20 of which are leased on a
full-time basis. The remainder of the classes are conducted in facilities which
are leased on an as-used basis, allowing classes to be expanded or relocated as
enrollments require. Becker classes are also currently offered in some DeVRY
Institutes and KGSM sites where the location and facility availability are
appropriate.

37
<PAGE> 39

Corporate

The Company's administrative offices are located in approximately 70,000
square feet of a leased facility in Oakbrook Terrace, Illinois. In addition, the
Company leases approximately 17,900 square feet of storage and other
miscellaneous use space at this facility.

CES maintains its headquarters at the Company's administrative offices in
Oakbrook Terrace, Illinois.

The Company's leased facilities are occupied under leases whose remaining
terms range from one to 12 years. A majority of these leases can be renewed for
additional periods.

LEGAL PROCEEDINGS

The Company is subject to occasional lawsuits, investigations and claims
arising out of the normal conduct of its business. Neither the Company nor any
of its subsidiaries is currently a party to any material legal action except
those described below.

On July 8, 1996, the Ontario Ministry of Education and Training temporarily
suspended and later conditionally reinstated the processing of financial aid
applications for students attending the Company's Toronto-area schools. Full
unconditional reinstatement is subject to the Ministry's completion of certain
procedures regarding verification of the Company's compliance with financial aid
processing regulations. See "Business--Financial Aid and Financing Student
Education."

In July 1996, the Company and DeVRY Canada, Inc., a wholly-owned
subsidiary, were served with a purported class action lawsuit filed in the
Ontario Court (General Division) in Canada by a former student alleging breach
of contract and negligent and fraudulent misrepresentation about the quality of
the DeVRY Institutes' educational programs and seeking up to $400 million (CDN)
in compensatory and punitive damages. The Company believes that the claims in
the lawsuit are frivolous and without merit. In response to the lawsuit, on July
24, 1996 the Company filed a Statement of Defense and intends to contest
vigorously the allegations and the certification of the class. A hearing on the
motion to certify the class has not yet been held and is not expected for
several months. This lawsuit and the actions taken by the Ontario Ministry of
Education and Training have resulted in a decline in enrollment at the Company's
Canadian DeVRY Institutes.

Although the outcomes cannot be predicted with certainty, the Company
believes the resolution of these matters will not have a material effect on the
Company's financial position, results of operations or liquidity.

38
<PAGE> 40

MANAGEMENT AND DIRECTORS

The following sets forth the names and ages of certain of the Company's
Directors and executive officers and the positions they hold with the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<S> <C> <C>
Dennis J. Keller(1)....................... 55 Chairman of the Board and Chief Executive Officer
Ronald L. Taylor(1)....................... 53 President, Chief Operating Officer and Director
Ewen M. Akin.............................. 66 Director
Charles A. Bowsher(2)..................... 65 Director
David S. Brown(1)(2)...................... 56 Director
Ann Ida Gannon, BVM(2).................... 81 Director
Robert E. King(1)(3)...................... 61 Director
Frederick A. Krehbiel(3).................. 55 Director
Robert C. McCormack(1).................... 57 Director
Julie A. McGee(2)......................... 54 Director
Thurston E. Manning(3).................... 70 Director
Hugo J. Melvoin(3)........................ 68 Director
Marilynn J. Cason......................... 53 Senior Vice President, General Counsel and
Corporate Secretary
Norman M. Levine.......................... 54 Vice President, Chief Financial Officer and
Controller
Norman C. Metz............................ 48 Senior Vice President
O. John Skubiak........................... 47 Senior Vice President
</TABLE>

- -------------------------
(1) Member of the Nominating Committee.

(2) Member of the Audit Committee.

(3) Member of the Compensation Committee.

Mr. Keller has been Chairman of the Board of the Company and Chief
Executive Officer since August 1987. In 1973 he co-founded KGSM and was from
1973 to August 1987 its Chairman of the Board and Chief Executive Officer. Mr.
Keller is a graduate of Princeton University and holds a Master of Business
Administration degree from the University of Chicago Graduate School of
Business. He is also a director of NICOR.

Mr. Taylor has been President and Chief Operating Officer and a Director of
the Company since August 1987. In 1973 Mr. Taylor co-founded KGSM and was from
1973 to August 1987 its President. Mr. Taylor is a graduate of Harvard
University and holds a Master of Business Administration degree from Stanford
University. He is also a director of SPR, Inc.

Dr. Akin has been a Director of the Company since February 1997. Appointed
as Assistant Professor of Physics in 1963, Dr. Akin subsequently became Vice
President for Academic Affairs and in 1976 became President of Kennedy-King
College, a position he held until 1986. His service for Kennedy-King College was
interrupted for a three-year period (1973-76) in which he served as President of
Malcolm X College.

Mr. Bowsher has been a Director of the Company since February 1997. He was
Controller General of the United States from 1981 until 1996, prior to which
time he was for 25 years a partner in Arthur Andersen LLP, except for a
four-year period (1967-1971) when he served as Assistant Secretary of the Navy
for Financial Management.

Mr. Brown has been a Director of the Company since 1987 and was a founding
stockholder and director of KGSM. He was a partner in the Chicago law firm of
McBride and Baker from 1972 to 1979. Mr. Brown served as general counsel to KGSM
from its inception to 1979. After 1980, Mr. Brown was employed by United
Laboratories, Inc., a manufacturer and seller of specialty chemicals where he
was until March 1997 Executive Vice President, Chief Financial Officer and
General Counsel. He currently serves as Vice President, Treasurer and Director
of Oakbrook Racquet Club, Inc., a tennis, health and fitness club. He served as
General Counsel of the U.S. Office of Minority Business Enterprise from 1971 to
1972.

39
<PAGE> 41

Sister Ann Ida Gannon, BVM, has been a Director of the Company since 1987
and has served on the KGSM Advisory Council since 1973. She was a Professor of
Philosophy at Mundelein College from 1951 until her retirement in 1985 and was
President of Mundelein College from 1957 to 1975.

Mr. King has been a Director of the Company since August 1987. Since 1994,
he has been Chairman of Salt Creek Ventures, a private equity firm. From 1983
through 1994, Mr. King was Chairman and Chief Executive Officer of Newtrend
Group, a software company and computer services company. He was President and
Chief Executive Officer of DELTAK, Inc., a video publisher, from 1971 to 1982.
He is also a director of U.S. SERVIS INC.

Mr. Krehbiel has been a director of the Company since 1996. He has been
employed by Molex Incorporated, an electronics component manufacturer, since
1965 and has served as Chief Executive Officer since 1988 and as Chairman since
1993. In addition to his service as a director of Molex Incorporated, Mr.
Krehbiel is a director of Tellabs, Inc., Nalco Chemical Co., and Northern Trust
Corp.

Mr. McCormack has been a director of the Company since 1996. He is a
founding partner of Trident Capital, Inc., a private equity firm established in
1993 to invest in information and business service companies. From 1990 to 1993
Mr. McCormack was the Assistant Secretary and Comptroller of the Navy, prior to
which time he served for 2 1/2 years on the staff of the Secretary of Defense in
various positions. Mr. McCormack spent 20 years in investment banking with
Dillon, Read & Co. Inc. and Morgan Stanley & Co. Incorporated before his
government service. He is also a director of Illinois Tool Works, Inc. and
MetroMail Corporation.

Ms. McGee became a Director of the Company in 1994. Since 1991, she has
been President of McDougal Littell, a Houghton Mifflin company, in Evanston,
Illinois and a corporate Executive Vice President of Houghton Mifflin Company in
Boston, which publishes print and electronic materials for elementary and
secondary schools and colleges and references for the office automation and
microcomputer markets, as well as fiction and nonfiction literature. Ms. McGee
began her career at McDougal Littell in 1988 as an editorial director. From 1986
to 1988, she held management positions at Ligature, Inc., prior to which she
was, for three years, Director of Marketing and Software Development for a
division of Tandy Corporation.

Dr. Manning has been a Director of the Company since 1990. He was President
of the Council on Post-secondary Accreditation from 1987 to 1991, prior to which
time he was, for 12 years, Executive Director of the Commission on Institutions
of Higher Education of the North Central Association of Colleges and Schools.

Mr. Melvoin has been a Director of the Company since August 1987. He is a
founding stockholder and director of KGSM. Mr. Melvoin, a practicing attorney
since 1953, was a partner in the Chicago law firm of Mayer, Brown & Platt from
1960 to 1981, when he established the law firm of Hugo Melvoin, P.C.

Ms. Cason joined the Company as Vice President, General Counsel and
Corporate Secretary in January 1989 with responsibility for the Company's legal
affairs and human resources. In her current position as a Senior Vice President,
Ms. Cason has responsibility for facilities planning, purchasing and management
information systems in addition to her responsibilities for legal affairs and
human resources.

Mr. Levine has been Controller of the Company since 1987 and has been the
Chief Financial Officer since March 1989. From November 1982 to 1987, Mr. Levine
was Controller of the DeVRY Institutes.

Mr. Metz joined the Company in April 1983 as a Vice President and in 1986
assumed responsibility for operations of the DeVRY Institutes. In addition, Mr.
Metz is responsible for student recruiting.

Mr. Skubiak has been with KGSM for more than 18 years, progressing from
admissions representative to Dean of KGSM. In his current position as Senior
Vice President of the Company, which he has held since 1994, Mr. Skubiak has
responsibility for the Company's marketing, other than student recruitment, and
the operations of KGSM and CES.

40
<PAGE> 42
PRINCIPAL AND SELLING STOCKHOLDERS

The table below sets forth the number and percentage of outstanding shares
of Common Stock beneficially owned prior to the Offering, the number of shares
of Common Stock to be sold in the Offering, and the number and percentage of
shares of Common Stock to be beneficially owned after the Offering by (i) each
person known by the Company to own beneficially more than 5% of the Common
Stock, (ii) each Director of the Company, (iii) the Company's Chief Executive
Officer and four other most highly compensated executive officers, (iv) all
Directors and executive officers of the Company as a group and (v) each Selling
Stockholder, in each case as of February 18, 1997, except as otherwise noted.
The Company believes that each individual or entity named has sole investment
and voting power with respect to the shares of Common Stock indicated as
beneficially owned by them, except as otherwise noted.

<TABLE>
<CAPTION>
SHARES OWNED SHARES TO BE OWNED
PRIOR TO THE OFFERING(1) AFTER THE OFFERING(1)
------------------------------ SHARES ------------------------------
PERCENT OFFERED PERCENT
NAME NUMBER OF TOTAL HEREBY NUMBER OF TOTAL
---- ------------- -------- ------- ------------- --------
<S> <C> <C> <C> <C> <C>
Dennis J. Keller.............. 4,860,382 (2) 14.6% 200,000 4,660,382 13.6%
Ronald L. Taylor.............. 1,894,288 (3) 5.7 723,000 1,171,288 3.5
Ewen M. Akin.................. 20 * -- 20 *
Charles J. Bowsher............ -- * -- -- *
David S. Brown................ 214,000 (4) * 25,000 189,000 (4) *
Ann Ida Gannon................ 14,000 (4) * -- 14,000 (4) *
Robert E. King................ 165,280 (4)(5) * 40,000 125,280 (4)(5) *
Fredrick A. Krehbiel.......... 7,060 * -- 7,060 *
Thurston E. Manning........... 14,000 (4) * -- 14,000 (4) *
Robert C. McCormick........... 418,272 (6) 1.3 -- 418,272 (6) *
Julie A. McGee................ 8,000 (7) * -- 8,000 (7) *
Hugo J. Melvoin............... 86,964 (4)(8) * 12,000 74,964 (4)(8) *
Marilynn J. Cason............. 18,196 (9) * -- 18,196 (9) *
Norman M. Levine.............. 37,938 (10) 37,938 (10) *
Norman C. Metz................ 106,800 (11) * 106,800 (11) *
O. John Skubiak............... 47,450 (12) * 47,450 (12) *
GeoCapital Corporation........ 2,698,000 (13) 8.1 -- 2,698,000 (13) 7.9
Pilgrim Baxter & Associates... 2,225,600 (14) 6.7 -- 2,225,600 (14) 6.3
Baron Capital, Inc............ 1,759,400 (15) 5.3 -- 1,759,400 (15) 5.1
All Directors and Executive
Officers as a group (24
Persons).................... 7,991,282 24.0% 1,000,000 6,991,282 20.4%
</TABLE>

- -------------------------
* Represents less than 1% of the outstanding Common Stock.

(1) Calculated pursuant to Rule 13d-3(d) of the Exchange Act. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage owned
by such person, but not deemed outstanding for the purpose of calculating
the percentage owned by each other person listed.

(2) Includes 4,756 shares owned by Mr. Keller's wife and 6,000 shares owned by
Mr. Keller's children and 37,000 shares subject to purchase upon the
exercise of stock options. Mr. Keller disclaims beneficial ownership of the
shares owned by his wife and children. Mr. Keller's address is One Tower
Lane, Oakbrook Terrace, Illinois 60181.

(3) Includes 200 shares owned by Mr. Taylor's children and 37,000 shares
subject to purchase upon the exercise of stock options. Mr. Taylor
disclaims beneficial ownership of the shares owned by his children. Mr.
Taylor has granted the Underwriters a 30-day option to purchase up to
100,000 additional shares of Common Stock. If such option is exercised in
full, Mr. Taylor will own 1,071,288 shares of Common Stock, representing
3.2% of the outstanding shares of Common Stock. Mr. Taylor's address is One
Tower Lane, Oakbrook Terrace, Illinois 60181.

(4) Includes 14,000 shares subject to purchase upon the exercise of stock
options.

41
<PAGE> 43

(5) Includes the following shares held by trusts for which Robert E. King is
trustee: 47,240 shares of Common Stock held by LaSalle Trust No.
03-630780-9 for Robert E. King Jr.; 47,240 shares of Common Stock held by
LaSalle Trust No. 03-630780-1 for Heather Oakes King; and 47,240 shares of
Common Stock held by LaSalle Trust No. 03-630770-0 for Margaret E. King.
The trusts and their respective beneficiaries mentioned in this footnote
acquired the shares upon the dissolution of Keltin Partnership.

(6) Includes 412,448 shares held by The Northern Trust Company and Robert C.
McCormack Trust UA DTD 10-6-67.

(7) Includes 8,000 shares subject to purchase upon the exercise of stock
options.

(8) Includes 10,000 shares owned by the Melvoin Foundation.

(9) Includes 824 shares acquired through the DeVRY Inc. Profit Sharing
Retirement Plan, 172 shares acquired through the Employee Stock Purchase
Plan and 11,050 shares subject to purchase upon the exercise of stock
options.

(10) Includes 2,124 shares acquired through the DeVRY Inc. Profit Sharing
Retirement Plan, 214 shares acquired through the Employee Stock Purchase
Plan and 27,500 shares subject to purchase upon the exercise of stock
options.

(11) Includes 98,300 shares subject to purchase upon the exercise of stock
options.

(12) Includes 5,172 shares held in an IRA at Northern Trust Brokerage, 11,600
shares held in an IRA at Northern Trust Brokerage for Luba Skubiak and
4,400 shares subject to purchase upon the exercise of stock options.

(13) GeoCapital Corporation, whose address is 767 Fifth Avenue, New York, New
York 10153, as of December 31, 1996, had shared voting power and sole
investment power as to 2,698,000 shares.

(14) Pilgrim Baxter & Associates, whose address is 1255 Drummers Lane #300,
Wayne, PA 19087, as of December 31, 1996, had shared voting power and sole
investment power as to 1,112,800 shares.

(15) Baron Capital, Inc. whose address is 450 Park Avenue, New York, New York
10022, as of September 30, 1996, had sole voting and investment power as to
1,759,400 shares.

42
<PAGE> 44

DESCRIPTION OF CAPITAL STOCK

The following summarizes certain provisions of the Amended and Restated
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), the Amended and Restated By-Laws of the Company, dated as of
June 1, 1991 (the "By-Laws") and the Amended and Restated Registration
Agreement, dated as of November 15, 1987, as amended, among the Company and
certain of its stockholders (the "Registration Agreement"). Such summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Certificate of
Incorporation, the By-Laws and the Registration Agreement, including the
definitions therein of certain terms. Copies of the Certificate of
Incorporation, the By-Laws and the Registration Agreement are filed or
incorporated by reference as exhibits to the Registration Statement of which
this Prospectus is a part.

GENERAL

The Certificate of Incorporation authorizes the issuance of 75,000,000
shares of Common Stock. As of February 24, 1997, 33,292,194 shares of Common
Stock are issued and outstanding and 1,516,790 shares of Common Stock are
reserved for issuance under the Restated Stock Option Plan, the 1991 Stock
Option Plan and the 1994 Stock Option Plan.

COMMON STOCK

The shares of Common Stock have no preemptive or other subscription rights
and are not subject to any future call or assessment. The Common Stock is listed
on the NYSE under the symbol "DV."

Holders of shares of Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. See "Price Range of Common Stock and Dividend Policy." In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, holders of shares of Common Stock are entitled to share ratably in all
assets remaining after payment in full of liabilities. There are no redemption,
conversion or sinking fund provisions with respect to the Common Stock. The
holders of shares of Common Stock are entitled to one vote per share on any
matter submitted to stockholders. Certain holders of Common Stock may require
the Company to register certain of their shares of Common Stock under certain
circumstances. See "Description of Capital Stock--Registration Agreement."

The availability for issue of shares of Common Stock by the Company without
any further action by stockholders (except as may be required by applicable NYSE
regulations) could be viewed as enabling the Board of Directors to make more
difficult a change in control of the Company, including by issuing warrants or
rights to acquire shares of Common Stock to discourage or defeat unsolicited
stock accumulation programs and acquisition proposals and by issuing shares in a
private placement or public offering to dilute or deter stock ownership of
persons seeking to obtain control of the Company.

REGISTRATION AGREEMENT

Pursuant to the Registration Agreement, the parties thereto (who hold
approximately 25% of the outstanding shares of Common Stock) are entitled to
certain "demand" and "piggyback" registration rights. Under certain
circumstances, the holders of at least 25% of the Common Stock received on
conversion of the Company's former Series A Preferred Stock are entitled to
require registration under the Securities Act of their Series A Registrable
Shares (as defined in the Registration Agreement) and the holders of at least
33% of the Common Stock received on conversion of the Company's former Series B
Preferred Stock are entitled to require registration under the Securities Act of
their Founding Registrable Shares (as defined in the Registration Agreement) and
to require the Company to pay certain costs related to such registration.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Harris Trust &
Savings Bank, Chicago, Illinois.

43
<PAGE> 45

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION
AND BY-LAWS

The Certificate of Incorporation and By-Laws of the Company contain certain
provisions that may make the acquisition of control of the Company by means of a
tender offer, open market purchase, a proxy fight or otherwise more difficult.
These provisions are designed to encourage persons seeking to acquire control of
the Company to negotiate with the Company's Board of Directors. The Company
believes that, as a general rule, the interest of its stockholders would be
served best if any change in control results from negotiations with its Board of
Directors based upon careful consideration of the proposed terms, such as the
price to be paid to stockholders, the form of consideration to be paid and the
anticipated tax effects of the transaction.

However, the provisions could have the effect of discouraging a prospective
acquirer from making a tender offer or otherwise attempting to obtain control of
the Company. To the extent that these provisions discourage takeover attempts,
they could deprive stockholders of opportunities to realize takeover premiums
for their shares or could depress the market price for the shares. Moreover,
these provisions could discourage accumulations of large blocks of the Company's
stock, thus depriving stockholders of any advantages which large accumulations
of stock might provide.

Set forth below is a description of the relevant provisions of the
Certificate of Incorporation and the By-Laws. The descriptions are intended as a
summary only and are qualified in their entirety by reference to the Certificate
of Incorporation and By-Laws which are filed or incorporated by reference as
exhibits to the Registration Statement of which this Prospectus is a part.

Classified Board of Directors and related provisions. The Certificate of
Incorporation provides that the Board of Directors is divided into three classes
of Directors serving staggered three-year terms. As a result, approximately
one-third of the Company's Board of Directors will be elected each year. See
"Management and Directors." The classified board provision will prevent a party
who acquires control of a majority of the outstanding voting stock of the
Company from obtaining control of the Board of Directors until the second annual
stockholders meeting following the date the acquiror obtains the controlling
interest.

The Certificate of Incorporation provides that the number of Directors will
not be less than three nor more than 12 and that the Directors will have the
exclusive power to set the exact number of Directors within that range from time
to time by resolution adopted by vote of a majority of the entire Board of
Directors. The Certificate of Incorporation further provides that Directors may
be removed only for cause and by the affirmative vote of the holders of a
majority of all outstanding voting stock entitled to vote. This provision, in
conjunction with the provisions of the Certificate of Incorporation authorizing
the Board of Directors to fill vacant directorships, will prevent stockholders
from removing incumbent Directors without cause and filling the resulting
vacancies with their own nominees.

No stockholder action by written consent; special meetings. The Certificate
of Incorporation provides that stockholder action can be taken only at an annual
or special meeting of stockholders and cannot be taken by written consent in
lieu of a meeting. The Certificate of Incorporation provides that, except as
otherwise required by law, special meetings of the stockholders can only be
called by a majority of the entire Board of Directors, the Chairman of the Board
of Directors or the President. Stockholders are not permitted to call a special
meeting or to require the Board of Directors to call a special meeting of
stockholders. Any call for a special meeting must specify the matters to be
acted upon at the meeting.

Other constituencies provision. The Certificate of Incorporation provides
that, in determining whether to take or refrain from taking any corporate
action, the Board of Directors may take into account long-term as well as
short-term interests of the Company and its stockholders, customers, employees,
students, graduates, faculty and other constituencies of the Company, including
the effect on communities in which the Company does business.

Stockholder proposals. The By-Laws provide that, if a stockholder desires
to submit a proposal at an annual or special stockholders' meeting or to
nominate persons for election as Directors, the stockholder must submit written
notice to the Company at least 60 days prior to the anniversary date of the
prior annual meeting or within 10 days after notice of a special meeting is sent
or given to the stockholders by the Company. The notice must describe the
proposal or nomination and set forth the name and address of, and stock held of

44
<PAGE> 46

record and beneficially by, the stockholder. Notices of stockholders' proposals
must set forth reasons for conducting such business and any material interest of
the stockholder in such business. Director nomination notices must set forth the
name and address of the nominee, arrangements between the stockholder and the
nominee and other information as would be required under Regulation 14A of the
Exchange Act. The presiding officer of the meeting may refuse to acknowledge a
proposal or nomination not made in compliance with the procedures contained in
the By-Laws.

The By-Laws also provide that, in order for stockholders to approve
precatory proposals requesting the Board of Directors to take certain actions, a
majority of the outstanding stock of the Company entitled to vote thereon (and
not of the stock present at the meeting) must be voted for the proposal.

The advance notice requirements regulating stockholder nominations and
proposals may have the effect of precluding a contest for the election of
Directors or the introduction of a stockholder proposal if the procedures
established by it are not followed and may discourage or deter a third party
from conducting a solicitation of proxies to elect its own slate of Directors or
to introduce a proposal. The requirement that precatory proposals receive
approval of a majority of the outstanding shares entitled to vote rather than a
majority of the shares present at the meeting will make it more difficult for
stockholders to obtain the vote required to approve such proposals.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 34,292,194 shares of
Common Stock outstanding. Of these shares of Common Stock, the shares offered
hereby may be resold without registration under the Securities Act (except by
affiliates of the Company). The Company, its officers and directors, the Selling
Stockholders and certain other stockholders of the Company designated by the
Underwriters have agreed that, for a period of 90 days from the date of this
Prospectus, they will not, without the prior written consent of Smith Barney
Inc., offer, sell, contract to sell or otherwise dispose of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock. But for these agreements, all outstanding shares of the Company's
Common Stock immediately prior to the closing of the Offering would be eligible
for sale, subject to the volume resale, manner of sale and notice limitations of
Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, an "affiliate" is
entitled to sell, within any three-month period, that number of shares that does
not exceed the greater of 1% of the outstanding shares or the average weekly
trading volume of the then outstanding shares during the four calendar weeks
preceding such sale. As defined in Rule 144, an "affiliate" of an issuer is a
person that directly or indirectly controls, or is controlled by, or is under
common control with such issuer.

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices of the Common Stock.

45
<PAGE> 47

UNDERWRITING

Upon the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof, each Underwriter named below has severally
agreed to purchase, and the Company and the Selling Stockholders have agreed to
sell to such Underwriter, the number of shares of Common Stock set forth
opposite the name of such Underwriter.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Smith Barney Inc. ..........................................
ABN AMRO Chicago Corporation................................
Alex. Brown & Sons Incorporated.............................
Credit Suisse First Boston Corporation......................
----------
Total.................................................. 2,000,000
==========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby (other than those covered by the over-allotment option described
below) if any such shares are taken.

The Underwriters propose to offer part of the shares directly to the public
at the public offering price set forth on the cover page of this Prospectus and
part of the shares to certain dealers at a price which represents a concession
not in excess of $ per share under the public offering price. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per share to certain other dealers. After the initial public offering
of the shares to the public, the public offering price and such concessions may
be changed by the Representatives.

The Company and one of the Selling Stockholders have granted to the
Underwriters an option, exercisable for thirty days from the date of this
Prospectus, to purchase up to 200,000 and 100,000 additional shares of Common
Stock, respectively, at the price to public set forth on the cover page of this
Prospectus minus the underwriting discounts and commissions. The Underwriters
may exercise such option solely for the purpose of covering over-allotments, if
any, in connection with the offering of the shares offered hereby. To the extent
such option is exercised, each Underwriter will be obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares as the number of shares set forth opposite each Underwriter's name in the
preceding table bears to the total number of shares listed in such table.

The Company, its officers and directors, the Selling Stockholders and
certain other stockholders of the Company designated by the Underwriters have
agreed that, for a period of 90 days from the date of this Prospectus, they will
not, without the prior written consent of Smith Barney Inc., offer, sell,
contract to sell or otherwise dispose of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.

The Company, the Selling Stockholders, and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933.

In connection with the Offering and pursuant to Regulation M under the
Exchange Act, the Underwriters may engage in transactions that stabilize or
maintain the market price of the Common Stock at levels above those which might
otherwise prevail in the open market. Such stabilizing, if commenced, may be
discontinued at any time.

46
<PAGE> 48

VALIDITY OF SHARES

The validity of the shares of Common Stock offered hereby and certain other
legal matters will be passed upon for the Company by Mayer, Brown & Platt,
Chicago, Illinois, special counsel to the Company. Certain legal matters
relating to the Offering will be passed upon for the Selling Stockholders by
Mayer, Brown & Platt, Chicago, Illinois, and for the Underwriters by Katten
Muchin & Zavis, a partnership including professional corporations, Chicago,
Illinois.

EXPERTS

The consolidated financial statements of the Company as of June 30, 1996
and 1995 and for each of the three years in the period ended June 30, 1996
included in this Prospectus have been so included in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

47
<PAGE> 49

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Income........................... F-4
Consolidated Statements of Shareholders' Equity............. F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 50

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of DeVry Inc.

We have audited the accompanying consolidated balance sheets of DeVry Inc.
and its subsidiaries as of June 30, 1996 and 1995, and the related consolidated
statements of income, of shareholders' equity and of cash flows for each of the
three years in the period ended June 30, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the financial position of DeVry Inc. and its
subsidiaries at June 30, 1996 and 1995, and the results of their operations and
their cash flows for each of the three years in the period ended June 30, 1996,
in conformity with generally accepted accounting principles.

PRICE WATERHOUSE LLP
Chicago, Illinois
August 6, 1996, Except for Note 11
which is as of December 18, 1996

F-2
<PAGE> 51

DEVRY INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Current Assets:
Cash and Cash Equivalents.......................... $ 27,543 $ 22,760 $ 29,948 $ 26,252
Restricted Cash.................................... 28,479 26,852 16,590 20,179
Accounts Receivable, Net........................... 28,438 23,629 9,684 6,189
Inventories........................................ 1,087 1,155 3,290 3,553
Prepaid Expenses and Other......................... 2,313 2,936 2,055 1,846
-------- -------- -------- --------
Total Current Assets........................ 87,860 77,332 61,567 58,019
Land, Buildings and Equipment:
Land............................................... 18,722 18,952 18,956 18,952
Buildings.......................................... 50,101 40,492 50,570 39,399
Equipment.......................................... 58,639 47,109 51,198 43,390
Construction In Progress........................... 387 6,272 -- 1,337
-------- -------- -------- --------
127,849 112,825 120,724 103,078
Accumulated Depreciation........................... (53,072) (45,062) (49,283) (42,820)
-------- -------- -------- --------
Land, Buildings and Equipment, Net.......... 74,777 67,763 71,441 60,258
Other Assets:
Intangible Assets, Net............................. 37,859 1,991 37,709 2,022
Perkins Program Fund, Net.......................... 5,885 4,951 5,483 4,522
Other Assets....................................... 1,764 1,777 1,889 1,850
-------- -------- -------- --------
Total Other Assets.......................... 45,508 8,719 45,081 8,394
-------- -------- -------- --------
TOTAL ASSETS......................................... $208,145 $153,814 $178,089 $126,671
======== ======== ======== ========
LIABILITIES

Current Liabilities:
Accounts Payable................................... $ 16,164 $ 14,677 $ 18,859 $ 14,957
Accrued Salaries, Wages & Benefits................. 15,378 12,895 14,735 12,369
Accrued Expenses................................... 6,520 5,307 7,640 3,671
Advance Tuition Payments........................... 5,823 10,607 7,617 13,982
Deferred Tuition Revenue........................... 44,097 38,825 3,609 3,768
-------- -------- -------- --------
Total Current Liabilities................... 87,982 82,311 52,460 48,747
-------- -------- -------- --------
Other Liabilities:
Revolving Loan..................................... 44,000 17,029 61,500 33,029
Deferred Income Tax Liability...................... 2,142 2,641 2,207 2,318
Deferred Rent and Other............................ 4,936 4,426 4,635 4,609
-------- -------- -------- --------
Total Other Liabilities..................... 51,078 24,096 68,342 39,956
-------- -------- -------- --------
TOTAL LIABILITIES.................................... 139,060 106,407 120,802 88,703
-------- -------- -------- --------
SHAREHOLDERS' EQUITY
Common Stock, $0.01 par value, 75,000,000 Shares
Authorized, 33,265,244, 33,235,304, 33,243,704
and 33,226,984 Shares Issued and Outstanding at
December 31, 1996, December 31, 1995, June 30,
1996 and June 30, 1995, Respectively............. 333 333 333 333
Additional Paid-in Capital......................... 36,744 36,638 36,694 36,610
Retained Earnings.................................. 31,561 9,991 19,820 575
Cumulative Translation Adjustment.................. 447 445 440 450
-------- -------- -------- --------
TOTAL SHAREHOLDERS' EQUITY........................... 69,085 47,407 57,287 37,968
-------- -------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........... $208,145 $153,814 $178,089 $126,671
======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE> 52

DEVRY INC.

CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR ENDED JUNE 30,
------------------- ------------------------------
1996 1995 1996 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:
Tuition................................. $135,508 $113,793 $236,607 $207,530 $191,205
Other Educational....................... 14,603 12,364 22,341 19,887 19,681
Interest................................ 400 622 1,059 1,176 551
-------- -------- -------- -------- --------
Total Revenues.................. 150,511 126,779 260,007 228,593 211,437
-------- -------- -------- -------- --------

COSTS AND EXPENSES:
Cost of Educational Services............ 89,656 76,699 155,254 136,721 127,673
Student Services and Administrative
Expense.............................. 39,866 33,362 70,992 63,043 58,146
Interest Expense........................ 1,691 567 1,063 3,070 4,615
-------- -------- -------- -------- --------
Total Costs and Expenses........ 131,213 110,628 227,309 202,834 190,434
-------- -------- -------- -------- --------
Income Before Income Taxes................ 19,298 16,151 32,698 25,759 21,003
Income Tax Provision...................... 7,557 6,735 13,453 10,863 8,778
-------- -------- -------- -------- --------
NET INCOME................................ $ 11,741 $ 9,416 $ 19,245 $ 14,896 $ 12,225
======== ======== ======== ======== ========
EARNINGS PER COMMON SHARE................. $ 0.35 $ 0.28 $ 0.57 $ 0.45 $ 0.37
======== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 53

DEVRY INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR ENDED JUNE 30,
------------------ -----------------------------
1996 1995 1996 1995 1994
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Common Stock
End of period........................ $ 333 $ 333 $ 333 $ 333 $ 333
======= ======= ======= ======= =======
Additional Paid-In Capital
Beginning of period.................. 36,694 36,610 36,610 36,563 36,557
Shares issued for exercise of stock
options........................... 50 28 84 47 6
------- ------- ------- ------- -------
End of period........................ 36,744 36,638 36,694 36,610 36,563
======= ======= ======= ======= =======
Retained Earnings (Accumulated Deficit)
Beginning of period.................. 19,820 575 575 (14,321) (26,546)
Net income per accompanying
statement......................... 11,741 9,416 19,245 14,896 12,225
------- ------- ------- ------- -------
End of period........................ 31,561 9,991 19,820 575 (14,321)
======= ======= ======= ======= =======
Cumulative Translation Adjustment
Beginning of period.................. 440 450 450 403 678
Translation Adjustment............... 7 (5) (10) 47 (275)
------- ------- ------- ------- -------
End of period........................ 447 445 440 450 403
======= ======= ======= ======= =======
TOTAL SHAREHOLDERS' EQUITY, END OF
PERIOD............................... $69,085 $47,407 $57,287 $37,968 $22,978
======= ======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 54

DEVRY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR ENDED JUNE 30,
-------------------- --------------------------------
1996 1995 1996 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.................................. $ 11,741 $ 9,416 $ 19,245 $ 14,896 $ 12,225
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation............................ 4,155 3,140 7,516 6,157 6,981
Amortization............................ 788 31 63 63 346
Provision for Refunds and Uncollectible
Accounts............................. 9,356 8,186 16,130 12,810 14,101
Deferred Income Taxes................... 253 876 (456) 5,480 2,419
(Gain) Loss on Disposals of Land,
Buildings and Equipment.............. (145) 21 19 (7) 338
Changes in Assets and Liabilities:
Restricted Cash...................... (11,889) (6,673) 3,589 (9,130) (1,447)
Accounts Receivable.................. (27,997) (25,498) (18,645) (11,746) (14,125)
Inventories.......................... 2,203 2,398 263 (629) 34
Prepaid Expenses And Other........... (986) (396) (118) (128) 266
Perkins Program Fund Contribution and
Other.............................. (515) (557) (1,188) (1,649) 1,717
Accounts Payable..................... (2,695) (280) 3,210 3,136 1,380
Accrued Salaries, Wages, Expenses and
Benefits........................... (579) 805 6,239 667 3,601
Advance Tuition Payments............. (1,794) (3,375) (7,340) 7,943 1,010
Deferred Tuition Revenue............. 40,488 35,057 (159) 337 (441)
-------- -------- -------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES... 22,384 23,151 28,368 28,200 28,405
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures........................ (7,346) (10,666) (18,352) (14,551) (6,288)
Acquisition of Net Assets (Note 2):
Payment for Purchase of Operating Assets,
Net of Cash Acquired.................... (16,930)
Payment for Purchase of Intellectual
Property................................ (17,935)
-------- -------- -------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES....... (7,346) (10,666) (53,217) (14,551) (6,288)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds From Exercise of Stock Options..... 50 28 84 47 6
Proceeds From Revolving Credit Facility..... 46,500 22,000 35,029
Repayments Under Revolving Credit
Facility.................................. (17,500) (16,000) (18,029) (20,000) (4,000)
Repayments of Debt.......................... (12,195) (43,517)
-------- -------- -------- -------- --------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES................................ (17,450) (15,972) 28,555 (10,148) (12,482)
-------- -------- -------- -------- --------
Effects of Exchange Rate Differences.......... 7 (5) (10) 47 (275)
-------- -------- -------- -------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS................................. (2,405) (3,492) 3,696 3,548 9,360
Cash and Cash Equivalents at Beginning of
Period...................................... 29,948 26,252 26,252 22,704 13,344
-------- -------- -------- -------- --------
Cash and Cash Equivalents at End of Period.... $ 27,543 $ 22,760 $ 29,948 $ 26,252 $ 22,704
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest Paid During the Period............. $ 1,709 $ 802 $ 1,429 $ 3,367 $ 4,606
Income Taxes Paid During the Period......... $ 8,568 $ 7,183 13,902 7,080 4,607
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE> 55

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1996

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

DeVry Inc. (the Company) is a holding company which, through its wholly
owned subsidiaries, operates a national system of degree-granting,
career-oriented higher-education schools and a leading international training
firm. Keller Graduate School of Management, Inc. (KGSM), is one of the largest
regionally accredited higher-education systems in North America. Its DeVry
Institutes award associate and bachelor's degrees in electronics, computer
information systems, business operations, accounting, technical management and
telecommunications management. The DeVry Institutes are located on 10 campuses
in the United States and four campuses in Canada. Keller Graduate School
(Keller) awards master's degrees in business administration, human resource
management and project management. Keller classes are offered at 18 locations in
Illinois, Wisconsin, Missouri, Georgia, Arizona, California and Virginia. The
Corporate Educational Services division offers on-site management and technical
training programs for larger employers and government agencies. Becker CPA
Review (Becker CPA), acquired June 19, 1996 (Note 2), is the leading
international training firm preparing students to pass the Certified Public
Accountant's (CPA) examination. Currently, the CPA exam review course is offered
at approximately 135 locations in the United States and at eight international
locations. Becker CPA also offers a Certified Management Accountant (CMA)
examination review course in the United States.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany balances and transactions
have been eliminated in consolidation. Becker CPA accounts are consolidated
based upon an April 30 fiscal year end, which is its natural year end based on
its business cycle. There were no events occurring during the intervening period
before June 30, that materially effected the financial position or results of
operations of the Company. Unless indicated, or the context requires otherwise,
references to years refer to the Company's fiscal years then ended.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include time deposits, commercial paper,
municipal bonds and bankers acceptances with maturities of three months or less
or that are highly liquid and readily convertible to a known amount of cash.
These investments are stated at cost, which approximates market, due to their
short duration or liquid nature. The Company limits the amount of credit
exposure with any one investment instrument or with any one financial
institution. The Company evaluates the creditworthiness of the security issuers
and financial institutions with which it invests.

FINANCIAL AID AND RESTRICTED CASH

The financial aid and assistance programs, in which most of the Company's
students participate, are subject to political and budgetary considerations.
There is no assurance that such funding will be maintained at current levels.
Extensive and complex regulations in the U.S. and Canada govern all of the
government financial assistance programs in which the Company's students
participate. The Company's administration of these programs is periodically
reviewed by various regulatory agencies. Any regulatory violation could be the
basis for the initiation of a suspension, limitation or termination proceeding
against the Company.

A significant portion of revenues is provided by students who participate
in government financial aid and assistance programs. Restricted cash represents
amounts received from the U.S. government under various student aid grant and
loan programs. The cash is held in separate bank accounts and does not become

F-7
<PAGE> 56

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
available for general use by the Company until the financial aid is credited to
the accounts of students and the cash is transferred to an operating cash
account.

REVENUE RECOGNITION

Tuition revenue and provisions for refunds and uncollectible accounts are
recognized ratably over each of the academic terms in a fiscal year. The
provisions for refunds and uncollectible accounts are included in the cost of
educational services in the Consolidated Statements of Income. Related reserves
are $6,603,000 and $5,368,000 at June 30, 1996 and 1995, respectively. Textbook
sales and other educational revenues are recognized when they occur. Revenue
from training services is recognized when the training is provided.

INVENTORIES

Inventories consist mainly of textbooks, electronics kits and supplies held
for sale to students enrolled in KGSM's educational programs. Inventories are
valued at the lower of cost (first-in, first-out) or market.

LAND, BUILDINGS AND EQUIPMENT

Land, buildings and equipment are recorded at cost. Cost includes additions
and those improvements that increase the capacity or lengthen the useful lives
of the assets. Repairs and maintenance costs are expensed as incurred. Interest
is capitalized as a component of cost on major projects during the construction
period. The amount of interest capitalized for the years ended June 30, 1996 and
1995, was $314,000 and $101,000, respectively. Assets under construction are
reflected in construction in progress until they are ready for their intended
use.

Depreciation is computed using the straight line method over estimated
service lives ranging from three to 31 years.

INTANGIBLE ASSETS

Intangible assets relate to the acquired business operations of the DeVry
Institutes and Becker CPA (Note 2). These assets consist of the purchase prices
allocated to the estimated fair value of certain assets acquired (Note 3).
Accumulated amortization is computed using the straight line method over the
assets' estimated useful lives of 25 to 40 years.

The Company expenses all marketing and new school opening costs as
incurred.

PERKINS PROGRAM FUND

The Company makes contributions to the Perkins Student Loan Fund at a rate
equal to 33% of that contributed by the federal government. As previous
borrowers repay their Perkins loans, their payments are used to fund new loans
thus creating a permanent revolving loan fund. The Company carries its
investment in such contributions at original values net of allowances for losses
on loan collections of $1,547,000 and $1,275,000 at June 30, 1996 and 1995,
respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount reported in the Consolidated Balance Sheets for cash
and cash equivalents, restricted cash, accounts receivable, accounts payable,
accrued expenses and advanced and deferred tuition payments approximate fair
value because of the immediate or short-term maturity of these financial

F-8
<PAGE> 57

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
instruments. The carrying amount reported for borrowings under the revolving
loan agreement approximates fair value because the underlying instruments are
variable-rate notes.

FOREIGN CURRENCY TRANSLATION

The financial position and results of operations of KGSM's Canadian
subsidiary are measured using the local currency as the functional currency.
Assets and liabilities of the foreign subsidiary are translated to U.S. dollars
using exchange rates in effect at the balance sheet dates. Income and expense
items are translated at monthly average rates of exchange prevailing during the
year. The resultant translation adjustments are included in the component of
shareholders' equity designated as Cumulative Translation Adjustment.
Transaction gains or losses during the years ended June 30, 1996, 1995 and 1994,
were insignificant.

INCOME TAXES

Income taxes are provided by applying statutory rates to income recognized
for financial statement purposes. Deferred income taxes are provided for revenue
and expense items that are recognized in different accounting periods for
financial reporting purposes than for income tax purposes. Effects of statutory
rate changes are recognized for financial reporting purposes in the year in
which enacted by law.

STOCK SPLIT

On May 17, 1995, the Company's board of directors authorized a two-for-one
stock split in the form of a 100% stock dividend payable on June 21, 1995, to
shareholders of record on June 1, 1995. The par value of the additional shares
arising from the split has been reclassified from retained earnings to common
stock. In addition, all references in the financial statements to the number of
shares outstanding, per share amounts, stock option data and market prices of
the Company's common stock have been restated to reflect the stock split (Note
11).

EARNINGS PER COMMON SHARE

Earnings per common share are determined by dividing net earnings by the
weighted average number of common and common share equivalents outstanding
during the year after giving retroactive effect to the stock splits. Incentive
stock options are included as common stock equivalents using the treasury stock
method. The number of shares used in computing the net earnings per share was
33,661,000, 33,454,000 and 33,388,000 in 1996, 1995 and 1994, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates.

INTERIM FINANCIAL INFORMATION

The interim consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. These financial statements are
unaudited but, in the opinion of management, contain all adjustments, consisting
only of normal, recurring adjustments, necessary to present fairly the financial
condition and results of operations of the Company.

F-9
<PAGE> 58

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The results of operations for the six months ended December 31, 1996, are
not necessarily indicative of results to be expected for the entire fiscal year.

Certain reclassifications have been made to the December 1995 financial
statements to conform with the June 1996 and December 1996 presentation.

NOTE 2: ACQUISITION

On June 19, 1996, a newly formed, wholly owned subsidiary of the Company
acquired substantially all of the tangible operating assets and tradenames and
assumed certain liabilities of Becker CPA for $18,458,000 in cash. On this same
date, another newly formed, wholly owned subsidiary of the Company acquired
certain copyrights, other intellectual property and publicity rights of Becker
CPA for $17,935,000 in cash. Becker CPA is the leading international training
firm preparing students to pass the nationally administered and centrally graded
CPA exam, and it also offers a CMA exam review course. Funding for the
acquisitions was obtained through borrowings under the Company's revolving
credit facility (Note 5).

The acquisitions have been accounted for under the purchase method of
accounting. Accordingly, the purchase prices were allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed based on their
estimated fair values. The intangible assets are being amortized using the
straight line method over a 25-year period for financial reporting purposes and
are being deducted for tax reporting purposes over shorter statutory lives.

The following unaudited pro forma financial information presents the
results of operations of the Company and the acquired Becker CPA business as if
the acquisitions had occurred at the beginning of each fiscal year. The pro
forma information is based on historical results of operations and does not
necessarily reflect the actual results that would have occurred, nor is it
necessarily indicative of future results of operations of the combined
enterprises (dollars in thousands except for per share amounts):

<TABLE>
<CAPTION>
1996 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net Sales........................................... $279,938 $248,386
Net Income.......................................... 19,375 15,035
Earnings Per Common Share........................... $ 0.58 $ 0.45
</TABLE>

NOTE 3: INTANGIBLE ASSETS

Intangible assets that were not fully amortized at June 30 consist of the
following:

<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Trademarks......................................... $ 2,521,000 $2,521,000
Tradenames......................................... 17,465,000 --
Intellectual Property.............................. 17,425,000 --
Other.............................................. 860,000 --
----------- ----------
38,271,000 2,521,000
Accumulated Amortization........................... (562,000) (499,000)
----------- ----------
$37,709,000 $2,022,000
=========== ==========
</TABLE>

F-10
<PAGE> 59

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 4: INCOME TAXES

The components of income (loss) before income taxes are as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
U.S................................. $35,645,000 $23,323,000 $18,220,000
Foreign............................. (2,947,000) 2,436,000 2,783,000
----------- ----------- -----------
Total............................... $32,698,000 $25,759,000 $21,003,000
=========== =========== ===========
</TABLE>

The net income tax provisions (benefits) related to the above results are
as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
----------------------------------------
1996 1995 1994
----------- ----------- ----------
<S> <C> <C> <C>
Current Tax Provision:
U.S. Federal............................... $11,373,000 $ 3,141,000 $4,237,000
State and Local............................ 2,400,000 897,000 596,000
Foreign.................................... (776,000) 1,345,000 1,526,000
----------- ----------- ----------
Total Current...................... 12,997,000 5,383,000 6,359,000
----------- ----------- ----------
Deferred Tax Provision:
U.S. Federal............................... 381,000 4,578,000 2,039,000
State and Local............................ 273,000 838,000 268,000
Foreign.................................... (198,000) 64,000 112,000
----------- ----------- ----------
Total Deferred..................... 456,000 5,480,000 2,419,000
----------- ----------- ----------
Net Income Tax Provision..................... $13,453,000 $10,863,000 $8,778,000
=========== =========== ==========
</TABLE>

The income tax provisions differ from those computed using the statutory
rate as a result of the following items:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
-------------------------------------------------------------
1996 1995 1994
------------------ ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Expected Provision.......... $11,444,000 35.0% $ 9,016,000 35.0% $7,351,000 35.0%
Higher Rates on Foreign
Operations................ (312,000) (1.0) 323,000 1.3 308,000 1.5
State Income Taxes.......... 1,767,000 5.4 1,123,000 4.4 875,000 4.1
Other....................... 554,000 1.7 401,000 1.5 244,000 1.2
----------- ---- ----------- ---- ---------- ----
Income Tax Provision........ $13,453,000 41.1% $10,863,000 42.2% $8,778,000 41.8%
=========== ==== =========== ==== ========== ====
</TABLE>

F-11
<PAGE> 60

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 4: INCOME TAXES (CONTINUED)
Deferred income tax assets (liabilities) result primarily from the
recognition of the tax benefits of net operating loss carryforwards and from
temporary differences in the recognition of various expenses for tax and
financial statement purposes. These assets and liabilities are composed of the
following:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Loss Carryforwards.......................... $ -- $ 829,000 $ 5,038,000
Employee Benefits........................... 1,207,000 1,187,000 1,027,000
Tax Credits................................. -- 47,000 92,000
Rental and Occupancy........................ 762,000 787,000 609,000
Receivable Reserves and Other............... 2,953,000 1,608,000 1,943,000
----------- ----------- -----------
Gross Deferred Tax Assets................. 4,922,000 4,458,000 8,709,000
----------- ----------- -----------
Depreciation and Other...................... (4,837,000) (5,014,000) (3,970,000)
Amortization................................ (1,176,000) (991,000) (806,000)
----------- ----------- -----------
Gross Deferred Tax Liabilities............ (6,013,000) (6,005,000) (4,776,000)
----------- ----------- -----------
Net Deferred Taxes.......................... $(1,091,000) $(1,547,000) $ 3,933,000
=========== =========== ===========
</TABLE>

Based on the Company's history of operating earnings and its expectations
for the future, management believes that operating income will more than likely
be sufficient to recognize fully all deferred tax assets.

Deferred income tax provisions (benefits) result primarily from temporary
differences in the recognition of various expenses for tax and financial
statement purposes. The sources and tax effects of these differences are as
follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
--------------------------------------
1996 1995 1994
--------- ---------- -----------
<S> <C> <C> <C>
Realization of Operating Loss
Carryforwards....................... $ 829,000 $4,220,000 $ 4,497,000
Excess (Tax) Book Depreciation and
Amortization........................ (266,000) 87,000 (339,000)
Excess of Amounts Expensed for (Book)
Tax Purposes Over Amounts Deductible
for Book (Tax) Purposes............. (159,000) 973,000 (1,739,000)
Other, Net............................ 52,000 200,000 --
--------- ---------- -----------
Deferred Tax Provision................ $ 456,000 $5,480,000 $ 2,419,000
========= ========== ===========
</TABLE>

NOTE 5: REVOLVING LOAN AGREEMENT

All of the Company's borrowings and letters of credit under its revolving
loan agreement are through its operating subsidiary, KGSM. This agreement
consists of a revolving credit and letter of credit facility, which is available
to KGSM in an aggregate amount not to exceed $85,000,000. This agreement was
amended in June 1996 to permit the acquisition of Becker CPA (Note 2), increase
the borrowing limits, extend its term and provide for reduced interest rates
upon the achievement of certain financial ratios. All borrowings and letters of
credit under the revolving loan agreement now mature in August 1999, and there
are no required installment payments. Outstanding borrowings under the revolving
loan agreement are $61,500,000 and $33,029,000 at June 30, 1996 and 1995,
respectively. There is also a $1,460,000 letter of credit outstanding under this
agreement at June 30, 1996. Outstanding borrowings under the revolving loan
agreement bear interest, payable quarterly, at either the prime rate or a
Eurodollar rate plus 0.75%, at the option of KGSM.

F-12
<PAGE> 61

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 5: REVOLVING LOAN AGREEMENT (CONTINUED)
Upon achieving certain financial ratios included in the June 1996 amendment, the
interest rate can be reduced to a Eurodollar rate plus 0.35%. The effective
interest rate on outstanding borrowings at June 30, 1996, was 6.84%. Outstanding
letters of credit under the revolving loan agreement are charged an annual fee
equal to 0.75% of the undrawn face amount of the letter of credit, payable
quarterly.

The bank financing agreement contains certain covenants that, among other
things, limit capital expenditure to $25,000,000 annually and require
maintenance of certain financial ratios as defined in the agreement. None of
these covenants negatively impacts the Company's liquidity or capital resources.

In June 1995, the Company voluntarily prepaid the entire $7,870,000
remaining balance of its senior subordinated notes. On December 1, 1994, in
conjunction with the scheduled principal payment on this date, the Company made
a voluntary prepayment of $775,000. These senior subordinated notes bore
interest at a rate of 13% per annum and were subordinate to the revolving credit
facility.

NOTE 6: EMPLOYEE BENEFIT PLANS

PROFIT SHARING RETIREMENT PLAN

All employees who meet certain eligibility requirements can participate in
KGSM's 401(k) Profit Sharing Retirement Plan. KGSM contributes to the plan an
amount equal to 1.5% of the total eligible compensation of employees who make
contributions under the plan. KGSM's matching contributions under the plan were
approximately $765,000, $636,000 and $608,000 in 1996, 1995 and 1994,
respectively. In addition, the Company's board of directors may also make
discretionary contributions for the benefit of all eligible employees.
Provisions for discretionary contributions under the plan were approximately
$1,924,000, $1,566,000 and $1,413,000 in 1996, 1995 and 1994, respectively.

EMPLOYEE STOCK PURCHASE PLAN

Effective August 1, 1993, the Company established the DeVry Inc. Employee
Stock Purchase Plan. The Plan stipulates that any eligible employee may
authorize the Company to withhold up to $25,000 of annual earnings to purchase
common stock of the Company on the open market at 100% of the prevailing market
price. The Company pays all brokerage commissions and administrative fees
associated with the Plan. These expenses were insignificant for the years ended
June 30, 1996, 1995 and 1994.

NOTE 7: STOCK OPTION PLANS

The Company maintains three stock option plans: the Amended and Restated
Stock Incentive Plan, established in 1988, the 1991 Stock Incentive Plan and the
1994 Stock Incentive Plan. Under these Plans, directors, key executives and
managerial employees are eligible to receive incentive stock or nonqualified
options to purchase shares of the Company's common stock. The Amended and
Restated Stock Incentive Plan and the 1994 Stock Incentive Plan are administered
by a Plan Committee of the board of directors. Plan Committee members will be
granted automatic, nondiscretionary annual options. The 1991 Stock Incentive
Plan is administered by the board of directors. Options under all three Plans
are granted for terms of up to 10 years and vest over periods of one to five
years. The option price under the Plans is the fair market value of the shares
on the date of the grant.

F-13
<PAGE> 62

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 7: STOCK OPTION PLANS (CONTINUED)
Share status of each of these plans at June 30, 1996, was as follows:

<TABLE>
<CAPTION>
AVAILABLE FOR
RESERVED FOR FUTURE
AUTHORIZED ISSUANCE GRANT
---------- ------------ -------------
<S> <C> <C> <C>
Stock Incentive Plan..................... 400,000 369,200 6,800
1991 Stock Incentive Plan................ 400,000 398,080 122,200
1994 Stock Incentive Plan................ 800,000 796,000 716,000
</TABLE>

Activity during the three years ended June 30, 1996, with respect to
options under these plans, was as follows:

<TABLE>
<CAPTION>
SHARES OPTION PRICES
------- --------------
<S> <C> <C>
Under Option at June 30, 1993....................... 244,000 0.79 - 5.09
Options Exercised................................. (3,600) 1.75
Options Canceled.................................. (4,000) 6.56
Options Granted................................... 130,800 6.56 - 6.94
Under Option at June 30, 1994....................... 367,200 0.79 - 6.94
Options Exercised................................. (14,000) 1.75 - 6.56
Options Canceled.................................. (15,200) 1.75 - 6.56
Options Granted................................... 285,000 6.47 - 7.38
Under Option at June 30, 1995....................... 623,000 0.79 - 7.38
Options Exercised................................. (16,720) 1.75 - 7.38
Options Canceled.................................. (21,100) 6.47 - 10.88
Options Granted................................... 133,100 10.88 - 12.56
Under Option at June 30, 1996....................... 718,280 0.79 - 12.56
Exercisable at June 30, 1996...................... 302,080 0.79 - 7.38
</TABLE>

NOTE 8: COMMITMENTS AND CONTINGENCIES

KGSM and Becker CPA lease certain equipment and facilities under
non-cancelable operating leases, some of which contain renewal options,
escalation clauses and requirements to pay taxes, insurance and maintenance
costs. Future minimum rental commitments for all non-cancelable operating leases
having a remaining term in excess of one year at June 30, 1996, are as follows:

<TABLE>
<CAPTION>
AS OF AS OF
YEAR ENDED JUNE 30, JUNE 30, 1996 DECEMBER 31, 1996
------------------- ------------- -----------------
(UNAUDITED)
<S> <C> <C>
1997.......................................... $12,410,000 $12,490,000
1998.......................................... 11,740,000 12,780,000
1999.......................................... 10,580,000 12,540,000
2000.......................................... 9,480,000 11,440,000
2001.......................................... 9,360,000 11,320,000
Thereafter...................................... 56,170,000 81,850,000
</TABLE>

The Company recognizes rent expense on a straight-line basis over the term
of the lease, although the lease may include escalation clauses that provide for
lower rent payments at the start of the lease term and higher lease payments at
the end of the lease term.

F-14
<PAGE> 63

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 8: COMMITMENTS AND CONTINGENCIES (CONTINUED)
Rent expenses for the years ended June 30, 1996, 1995 and 1994, were
$13,879,000, $12,553,000 and $9,611,000, respectively.

In July 1996, the Company entered into an out-of-court settlement agreement
with the Internal Revenue Service (IRS) relative to the Statutory Notice of
Deficiency issued by the IRS against the Company for tax years 1988 through
1991. The claimed deficiencies related to the amortization of intangible assets
purchased during the acquisition of the DeVry Institutes in 1987 (Notes 1 and
3). All of these issues have been resolved as a result of the settlement. The
settlement amount is immaterial to the Company's financial position, results of
operations and liquidity.

During 1996, the Ontario Ministry of Education and Training temporarily
suspended and conditionally reinstated the processing of financial aid
applications for students attending the Company's Toronto-area schools. Full
unconditional reinstatement is subject to the Ministry's completion of certain
procedures regarding verification of the Company's compliance with financial aid
processing regulations.

In July 1996, the Company was served with a class action lawsuit in Canada
alleging misrepresentation about the quality of the DeVry Institutes'
educational programs. The Company believes that the claims in the lawsuit are
frivolous and without merit. In response to the lawsuit, the Company has filed a
Statement of Defense and intends to vigorously contest the allegations. Although
the outcome cannot be predicted with certainty, the Company believes the
resolution of this matter will not have a material effect on the Company's
financial position, results of operations or liquidity.

NOTE 9: OPERATIONS BY GEOGRAPHIC AREA

The Company operates in a single industry segment as a provider of
educational services. The Company conducts its educational operations in the
United States and Canada. Revenues, income before interest and taxes, and
identifiable assets by geographic area are as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
--------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
U.S.................................... $234,180,000 $205,424,000 $192,842,000
Foreign................................ 25,827,000 23,169,000 18,595,000
Income Before Interest and Taxes:
U.S.................................... 36,708,000 26,393,000 22,835,000
Foreign................................ (2,947,000) 2,436,000 2,783,000
Identifiable Assets:
U.S.................................... 170,828,000 119,160,000 100,080,000
Foreign................................ 7,261,000 7,511,000 6,718,000
</TABLE>

F-15
<PAGE> 64

DEVRY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1996

NOTE 10: QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized unaudited quarterly data for the years ended June 30, 1996 and
1995, are as follows (dollars in thousands, except for per share amounts):

<TABLE>
<CAPTION>
QUARTER
------------------------------------- TOTAL
FIRST SECOND THIRD FOURTH YEAR
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1996
Revenues.............................. $59,839 $66,940 $68,412 $64,816 $260,007
Income Before Interest and Taxes...... 7,382 9,336 8,822 8,221 33,761
Net Income............................ 4,031 5,385 5,062 4,767 19,245
------- ------- ------- ------- --------
Earnings Per Common Share............. .12 .16 .15 .14 .57
======= ======= ======= ======= ========
</TABLE>

<TABLE>
<CAPTION>
QUARTER
------------------------------------- TOTAL
FIRST SECOND THIRD FOURTH YEAR
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1995
Revenues.............................. $51,955 $59,299 $59,739 $57,600 $228,593
Income Before Interest and Taxes...... 5,770 8,198 7,652 7,209 28,829
Net Income............................ 2,932 4,343 4,098 3,523 14,896
------- ------- ------- ------- --------
Earnings Per Common Share............. .09 .13 .12 .11 .45
======= ======= ======= ======= ========
</TABLE>

NOTE 11: SUBSEQUENT EVENT

On November 19, 1996, the Company's board of directors authorized a
two-for-one stock split in the form of a 100% stock dividend payable on December
18, 1996, to shareholders of record on December 2, 1996. The par value of the
additional shares arising from the splits has been reclassified from retained
earnings to common stock. In addition, all references in the financial
statements to the number of shares outstanding, per share amounts, stock option
data and market prices of the Company's common stock have been restated to
reflect the stock split.

F-16
<PAGE> 65

====================================================

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY SELLING STOCKHOLDER OR ANY OF THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
THOSE TO WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO
MAKE SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES
NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Prospectus Summary................... 3
Risk Factors......................... 6
Use of Proceeds...................... 10
Price Range of Common Stock and
Dividend Policy.................... 10
Capitalization....................... 11
Selected Consolidated Financial
Data............................... 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 13
Business............................. 19
Management and Directors............. 39
Principal and Selling Stockholders... 41
Description of Capital Stock......... 43
Shares Eligible for Future Sale...... 45
Underwriting......................... 46
Validity of Shares................... 47
Experts.............................. 47
Index to Financial Statements........ F-1
</TABLE>

====================================================
====================================================

2,000,000 SHARES

DEVRY INC.

COMMON STOCK
DEVRY LOGO
------------

P R O S P E C T U S
MARCH , 1997
------------
SMITH BARNEY INC.

ABN AMRO CHICAGO CORPORATION
ALEX. BROWN & SONS
INCORPORATED

CREDIT SUISSE FIRST BOSTON

======================================================
<PAGE> 66

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following are the estimated expenses in connection with the
distribution of the securities being registered:

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 17,250
Accounting Fees and Expenses................................ 30,000
Attorneys' Fees and Expenses................................ 75,000
NASD Filing Fee............................................. 6,193
Printing and Engraving Expenses............................. 111,557
Listing Fees................................................ 5,000
Miscellaneous............................................... 5,000
--------
Total.................................................. $250,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

(a) The Delaware General Corporation Law ("Delaware GCL") (Section 145)
gives Delaware corporations broad powers to indemnify their present and former
directors and officers and those of affiliated corporations against expenses
incurred in the defense of any lawsuit to which they are made parties by reason
of being or having been such directors or officers, subject to specified
conditions and exclusions, gives a director or officer who successfully defends
an action the right to be so indemnified, and authorizes the Registrant to buy
directors' and officers' liability insurance. Such indemnification is not
exclusive of any other rights to which those indemnified may be entitled under
any by-laws, agreement, vote of stockholders or otherwise.

(b) Article Ninth of the Certificate of Incorporation of the Registrant
permits, and Article Ninth of the By-Laws of the Registrant provides for,
indemnification of directors, officers, employees and agents to the fullest
extent permitted by law.

(c) In accordance with Section 102(b)(7) of the Delaware GCL, the
Registrant's Certificate of Incorporation provides that directors shall not be
personally liable for monetary damages for breaches of their fiduciary duty as
directors except for (1) breaches of their duty of loyalty to the Registrant or
its stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law, (3) under Section 174 of
the Delaware GCL (unlawful payment of dividends) or (4) transactions from which
a director derives an improper personal benefit.

(d) [Provisions of Underwriting Agreements]

ITEM 16. EXHIBITS

A list of the exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and
which is incorporated herein by reference.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

II-1
<PAGE> 67

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-2
<PAGE> 68

SIGNATURES

Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Oakbrook Terrace and State of Illinois on the 27th day of February, 1997.

DeVRY INC.

By: /s/ DENNIS J. KELLER

------------------------------------------
Dennis J. Keller
Chairman of the Board and
Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
Dennis J. Keller, Ronald L. Taylor and Marilynn J. Cason and each of them, the
true and lawful attorneys-in-fact and agents of the undersigned, with full power
of substitution and resubstitution, for and in the name, place and stead of the
undersigned, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 27th day of February, 1997.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DENNIS J. KELLER Chairman of the Board and Chief Executive
- --------------------------------------------------- Officer
Dennis J. Keller

/s/ RONALD L. TAYLOR Director, President and Chief Operating
- --------------------------------------------------- Officer
Ronald L. Taylor

/s/ NORMAN M. LEVINE Vice President, Controller and Chief Financial
- --------------------------------------------------- Officer (principal financial officer and
Norman M. Levine principal accounting officer)

/s/ CHARLES A. BOWSHER Director
- ---------------------------------------------------
Charles A. Bowsher
</TABLE>

II-3
<PAGE> 69
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <S>
/s/ DAVID S. BROWN Director
- ---------------------------------------------------
David S. Brown

/s/ ANN IDA GANNON Director
- ---------------------------------------------------
Ann Ida Gannon, BVM

/s/ ROBERT E. KING Director
- ---------------------------------------------------
Robert E. King

/s/ FREDERICK A. KREHBIEL Director
- ---------------------------------------------------
Frederick A. Krehbiel

/s/ THURSTON E. MANNING Director
- ---------------------------------------------------
Thurston E. Manning

/s/ ROBERT C. MCCORMACK Director
- ---------------------------------------------------
Robert C. McCormack

/s/ JULIE A. MCGEE Director
- ---------------------------------------------------
Julie A. McGee

/s/ HUGO J. MELVOIN Director
- ---------------------------------------------------
Hugo J. Melvoin

/s/ EWEN M. AKIN Director
- ---------------------------------------------------
Ewen M. Akin
</TABLE>

II-4
<PAGE> 70

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------- ----------
<C> <S> <C>

1.1 Underwriting Agreement......................................

3.1 Restated Certificate of Incorporation of the Company, as
amended.....................................................

5.1 Opinion of Mayer, Brown & Platt.............................

10.1 Amended and Restated DeVRY INC. Stock Incentive Plan........

10.2 Amended and Restated DeVRY INC. 1994 Stock Incentive Plan...

10.3 Amended and Restated DeVRY INC. 1991 Stock Incentive Plan...

23.1 Consent of Mayer, Brown & Platt (included in their opinion
filed as
Exhibit 5.1 hereto).........................................

23.2 Consent of Price Waterhouse LLP.............................

24.1 Powers of Attorney (included on the signature page of this
registration statement).....................................
</TABLE>

<PAGE> 1

EXHIBIT 1.1

2,000,000 Shares

DEVRY INC.

Common Stock

UNDERWRITING AGREEMENT

March , 1997
[Subject to Negotiation]

SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
ABN AMRO CHICAGO CORPORATION
ALEX. BROWN & SONS INCORPORATED

As Representatives of the Several Underwriters

c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

DEVRY INC., a Delaware corporation (the "Company"), proposes to issue and
sell an aggregate of 1,000,000 shares of its common stock, $0.01 par value per
share, to the several Underwriters named in Schedule II hereto (the
"Underwriters"), and the persons named in Part A of Schedule I hereto (the
"Selling Stockholders") propose to sell to the several Underwriters an aggregate
of 1,000,000 shares of common stock of the Company. The Company and the Selling
Stockholders are hereinafter sometimes referred to as the "Sellers". The
Company's common stock, $0.01 par value, is hereinafter referred to as the
"Common Stock" and the 1,000,000 shares of Common Stock to be issued and sold to
the Underwriters by the Company and the 1,000,000 shares of Common Stock to be
sold to the Underwriters by the Selling Stockholders are hereinafter referred to
as the "Firm Shares". The Company and the Selling Stockholder listed in Part B
of Schedule I hereto also propose to sell to the Underwriters, upon the terms
and conditions set forth in Section 2 hereof, up to an additional 300,000 shares
(the "Additional Shares") of Common Stock. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares".

The Company and the Selling Stockholders wish to confirm as follows their
respective agreements with you (the "Representatives") and the other several
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.

<PAGE> 2

1. Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Shares. The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits and all
information omitted therefrom in reliance on Rule 430A under the Act and
contained in the Prospectus referred to below), as amended at the time it
becomes effective, or, if the registration statement became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. If the
Company files with the Commission an additional registration statement relating
to a portion of the Shares pursuant to Rule 462(b) under the Act (a "462(b)
Registration Statement"), any reference in this Agreement to the Registration
Statement shall be deemed to include such 462(b) Registration Statement. The
term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference in this Agreement to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of the registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the registration
statement, the Registration Statement, any Prepricing Prospectus, the
Prospectus, or any amendment or supplement thereto.

2. Agreements to Sell and Purchase. Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis

2
<PAGE> 3

of the representations, warranties and agreements of the Company and the
Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_____ per Share
(the "purchase price per share"), the number of Firm Shares which bears the
same proportion to the aggregate number of Firm Shares to be issued and sold by
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Stockholders.

Subject to such adjustments as you may determine in order to avoid fractional
shares, each Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter, severally and not jointly, agrees to purchase
from each Selling Stockholder at the purchase price per share that number of
Firm Shares which bears the same proportion to the number of Firm Shares set
forth opposite the name of such Selling Stockholder in Schedule I hereto as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Stockholders.

The Company and the Selling Stockholder listed in Part B of Schedule I hereto
also agree, subject to all the terms and conditions set forth herein, to sell
to the Underwriters, and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company and the Selling Stockholder
listed in Part B of Schedule I hereto, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised at
any time and from time to time prior to 9:00 P.M., New York City time, on the
30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of 200,000
Additional Shares from the Company and up to an aggregate of 100,000 shares
from the Selling Stockholder listed in Part B of Schedule I hereto.
Additional Shares may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
number of Additional Shares which the Underwriters elect to purchase upon any
exercise of the over-allotment option shall be provided by the Company and by
the Selling Stockholder who has agreed to sell Additional Shares in proportion
to the respective maximum numbers of Additional Shares which the Company and
the Selling Stockholder has agreed to sell. Upon any exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company and the Selling Stockholder who has agreed to sell
Additional Shares the number of Additional Shares (subject to such adjustments
as you may determine in order to avoid fractional shares) which bears the same
proportion to the number

3
<PAGE> 4

of Additional Shares to be sold by the Company and the Selling Stockholder who
has agreed to sell Additional Shares as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders.

Certificates in transferable form for the Shares (including any Additional
Shares) which each of the Selling Stockholders agrees to sell pursuant to this
Agreement have been placed in custody with (the "Custodian")
for delivery under this Agreement pursuant to a Custody Agreement and Power of
Attorney (the "Custody Agreement") executed by each of the Selling Stockholders
appointing and as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters, the Company and
each other Selling Stockholder, (ii) the arrangements made by the Selling
Stockholders for such custody are, except as specifically provided in the
Custody Agreement, irrevocable, and (iii) the obligations of the Selling
Stockholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Stockholder or by operation of law, whether by the
death or incapacity of any Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder shall die or be incapacitated or if any
other event shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Stockholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of
each of the Selling Stockholders, to execute this Agreement and any other
documents necessary or desirable in connection with the sale of the Shares to
be sold hereunder by such Selling Stockholder, to make delivery of the
certificates for such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to pay therefrom any expenses to be
borne by such Selling Stockholder in connection with the sale and public
offering of such Shares, to distribute the balance thereof to such Selling
Stockholder, and to take such other action as may be necessary or desirable in
connection with the transactions contemplated by this Agreement. Each
Attorney-in-Fact agrees to perform his duties under the Custody Agreement.

3. Terms of Public Offering. The Sellers have been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.

4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters
of and payment for the Firm Shares shall be made at the office of Smith Barney
Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New York City
time, on , 1997 (the "Closing Date"). The place of closing for the
Firm Shares and the Closing Date may be varied by agreement among you, the
Company and the Attorneys-in-Fact.

4
<PAGE> 5

Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the aforementioned office of
Smith Barney Inc. at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company and the
Attorneys-in-Fact of the Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. The place of closing for any
Additional Shares and the Option Closing Date for such Shares may be varied by
agreement among you, the Company and the Attorneys-in-Fact.

Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.

5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:

(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.

(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding
for such purpose; and (iii) within the period of time referred to in paragraph
(f) below, of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, which makes any statement of a material fact made in
the Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations
thereunder to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as

5
<PAGE> 6

then amended or supplemented) to comply with the Act or any other law. If at
any time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.

(c) The Company will furnish to you, without charge (i) five signed copies
of the registration statement (including any 462(b) Registration Statement) as
originally filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration statement, (ii) such
number of conformed copies of the registration statement (including any 462(b)
Registration Statement) as originally filed and of each amendment thereto, but
without exhibits, as you may request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may request, and (iv) five
copies of the exhibits to the Incorporated Documents.

(d) The Company will not file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus or, prior to the end of
the period of time referred to in the first sentence in subsection (f) below,
file any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which, after you shall have
received a copy of the document proposed to be filed, you shall reasonably
object.

(e) Prior to the execution and delivery of this Agreement, the Company has
delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.

(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriters a prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing,

6
<PAGE> 7

becomes an Incorporated Document) in order to comply with the Act or any other
law, the Company will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto (or to such document), and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies thereof. In the event
that the Company and you, as Representatives of the several Underwriters, agree
that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.

(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out
of the offering or sale of the Shares, in any jurisdiction where it is not now
so subject.

(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act.

(i) During the period of five years hereafter, the Company will furnish to
you (i) as soon as available, a copy of each report of the Company mailed to
stockholders or filed with the Commission, and (ii) from time to time such
other information concerning the Company as you may request.

(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Stockholders to comply with
the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Representatives for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
in connection herewith.

(k) The Company will apply the net proceeds from the sale of the Shares to
be sold by it hereunder substantially in accordance with the description set
forth in the Prospectus.

7
<PAGE> 8

(l) If Rule 430A of the Act is employed, the Company will timely file the
Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.

(m) If an additional registration statement is required to register a
portion of the Shares under the Act, the Company will file with the Commission
a 462(b) Registration Statement with respect to such Shares not later than
10:00 P.M., New York City time, on the date hereof, or at such later date and
time as shall be consented to in writing by you.

(n) Except as provided in this Agreement, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options or warrants to purchase Common Stock, for a period of 90 days after the
date of the Prospectus, without the prior written consent of Smith Barney Inc..

(o) The Company has furnished or will furnish to you "lock-up" letters,
in form and substance satisfactory to you, signed by each of its current
officers and directors and each of its stockholders designated by you.

(p) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.

(q) The Company will use its best efforts to have the shares of Common
Stock which it agrees to sell under this Agreement listed, subject to notice of
issuance, on the New York Stock Exchange on or before the Closing Date.

6. Agreements of the Selling Stockholders. Each of the Selling Stockholders
agrees with the several Underwriters as follows:

(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.

(b) Such Selling Stockholder will pay all Federal and other taxes, if any
on the transfer or sale of the Shares being sold by the Selling Stockholder to
the Underwriters.

(c) Such Selling Stockholder will do or perform all things required to be
done or performed by the Selling Stockholder prior to the Closing Date or any
Option Closing Date, as the case may be, to satisfy all conditions precedent to
the delivery of the Shares pursuant to this Agreement.

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<PAGE> 9

(d) Such Selling Stockholder has executed or will execute a "lock-up"
letter as provided in Section 5(n) above and will not sell, contract to sell or
otherwise dispose of any Common Stock, except for the sale of Shares to the
Underwriters pursuant to this Agreement, prior to the expiration of 90 days
after the date of the Prospectus, without the prior written consent of Smith
Barney Inc..

(e) Except as stated in this Agreement and in the Prepricing Prospectus
and the Prospectus, such Selling Stockholder will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.

(f) Such Selling Stockholder will advise you promptly, and if requested
by you, will confirm such advice in writing, within the period of time referred
to in Section 5(f) hereof, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of operations
or of any change in information relating to such Selling Stockholder or the
Company or any new information relating to the Company or relating to any
matter stated in the Prospectus or any amendment or supplement thereto which
comes to the attention of such Selling Stockholder that suggests that any
statement made in the Registration Statement or the Prospectus (as then amended
or supplemented, if amended or supplemented) is or may be untrue in any
material respect or that the Registration Statement or Prospectus (as then
amended or supplemented, if amended or supplemented) omits or may omit to state
a material fact or a fact necessary to be stated therein in order to make the
statements therein not misleading in any material respect, or of the necessity
to amend or supplement the Prospectus (as then amended or supplemented, if
amended or supplemented) in order to comply with the Act or any other law.

7. Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:

(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in
all material respects with the provisions of the Act. The Commission has not
issued any order preventing or suspending the use of any Prepricing Prospectus.

(b) The Company and the transactions contemplated by this Agreement meet
the requirements for using Form S-3 under the Act. The registration statement
in the form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective and the
prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and will not at any such times
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the registration

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<PAGE> 10

statement or the prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through you expressly for use therein.

(c) The Incorporated Documents heretofore filed, when they were filed (or,
if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document, when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.

(d) All the outstanding shares of Common Stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights; the Shares to be issued and sold by
the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and the capital stock of the Company conforms to the
description thereof in the registration statement and the prospectus.

(e) The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries (as hereinafter defined)
taken as a whole.

(f) All the Company's subsidiaries (collectively, the "Subsidiaries") are
listed in an exhibit to the Company's Annual Report on Form 10-K which is
incorporated by reference into the Registration Statement. Each Subsidiary is
a corporation duly organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
register or qualify does not have a material adverse effect on the condition

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<PAGE> 11

(financial or other), business, properties, net worth or results of operations
of such Subsidiary; all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or indirectly through one
of the other Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.

(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not described
as required, and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement or any Incorporated Document that are not described or filed as
required by the Act or the Exchange Act.

(h) Neither the Company nor any of the Subsidiaries is in violation of its
certificate or articles of incorporation or by-laws, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries, or in default in any material respect in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties may be bound.

(i) Neither the issuance and sale of the Shares, the execution, delivery
or performance of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the registration of the
Shares under the Act and the Exchange Act and compliance with the securities or
Blue Sky laws of various jurisdictions, all of which have been or will be
effected in accordance with this Agreement) or conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Subsidiaries or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default
under, any agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order or decree applicable
to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.

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<PAGE> 12

(j) The accountants, Price Waterhouse LLP, who have certified or shall
certify the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.

(k) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
or incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and the books and records
of the Company and the Subsidiaries.

(l) The execution and delivery of, and the performance by the Company of
its obligations under, this Agreement have been duly and validly authorized by
the Company, and this Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws.

(m) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither the Company nor
any of the Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries taken as a
whole, and there has not been any change in the capital stock, or material
increase in the short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, net worth or results
of operations of the Company and the Subsidiaries taken as a whole.

(n) Each of the Company and the Subsidiaries has good and marketable title
to all property (real and personal) described in the Prospectus as being owned
by it, free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement and the
Prospectus or in a document filed as an exhibit to the Registration Statement
and all the property described in the Prospectus as being held under lease by
each of the Company and the Subsidiaries is held by it under valid, subsisting
and enforceable leases.

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<PAGE> 13

(o) The Company has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the Act.

(p) The Company and each of the Subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, all permits required for
participation in federal financial aid programs under Title IV of the Higher
Education Act of 1965, as amended ("Title IV Programs"), as are necessary to
own its respective properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be set forth
in the Prospectus; the Company and each of the Subsidiaries has fulfilled and
performed all its material obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment
of the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as described
in the Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries.

(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(r) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.

(s) The Company and each of the Subsidiaries have filed all tax returns
required to be filed, which returns are complete and correct, and neither the
Company nor any Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto.

(t) No holder of any security of the Company, other than the Selling
Stockholders, has any right (other than rights that have been validly waived)
to require registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or consummation of
the transactions contemplated by this Agreement.

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<PAGE> 14

(u) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registration, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any of them or necessary
for the conduct of their respective businesses, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the rights of
the Company and the Subsidiaries with respect to the foregoing.

(v) Except as described in the Prospectus, the Company and the
Subsidiaries are duly qualified under and in full compliance with all
applicable laws and regulations in each jurisdiction in which such entity
participates in student financial aid programs, with such exceptions that would
not and could not be expected, individually or in the aggregate, to have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, and no proceedings for the suspension,
limitation or termination of any such entity's' participation in such financial
aid programs have been initiated or, to the Company's knowledge, threatened by
any United States or state regulatory agency or by any Canadian or provincial
regulatory agency.

(w) Except as described in the Prospectus, the Company has no knowledge
that the student loan default rate of any educational institution operated by
the Company and the Subsidiaries is in excess of 20%, and the Company has no
knowledge of any existing or threatened restriction or termination of any such
institution's participation in the student loan programs administered by the
U.S. Department of Education.

(x) Except as described in the Prospectus, each of the Company and the
Subsidiaries (including any individual institution within any such entity)
meets all fiscal tests and/or bonding requirements imposed by applicable United
States federal and state and Canadian federal and provincial regulatory
authorities.

(y) The Company and the Subsidiaries possess the accreditations set forth
in the Prospectus, and the Company has no knowledge of any threatened review,
suspension or termination of such accreditations other than such reviews as may
occur in the ordinary course in connection with the periodic renewal of such
accreditations.

(z) The Company has complied with all provisions of Florida Statutes,
'517.075, relating to issuers doing business with Cuba.

8. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder represents and warrants to each Underwriter that:

(a) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, valid and marketable title to the Shares to be
sold by such Selling Stockholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any restriction
on transfer.

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<PAGE> 15

(b) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, full legal right, power and authorization, and
any approval required by law, to sell, assign transfer and deliver such Shares
in the manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several Underwriters will acquire valid and
marketable title to such Shares free and clear of any lien, claim, security
interest, or other encumbrance.

(c) This Agreement and the Custody Agreement have been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and are the
valid and binding agreements of such Selling Stockholder enforceable against
such Selling Stockholder in accordance with their terms.

(d) Neither the execution and delivery of this Agreement or the Custody
Agreement by or on behalf of such Selling Stockholder nor the consummation of
the transactions herein or therein contemplated by or on behalf of such Selling
Stockholder requires any consent, approval, authorization or order of, or
filing or registration with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may be required
under the Act and the Exchange Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares) or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is or may be bound or to which any of such
Selling Stockholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to such
Selling Stockholder or to any property or assets of such Selling Stockholder.

(e) The Registration Statement and the Prospectus, insofar as they relate
to such Selling Stockholder, do not and will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.

(f) Such Selling Stockholder does not have any knowledge or any reason to
believe that the Registration Statement or the Prospectus (or any amendment or
supplement thereto) contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading.

(g) The representations and warranties of such Selling Stockholder in the
Custody Agreement are, and on the Closing Date and any Option Closing Date will
be, true and correct.

(h) Such Selling Stockholder has not taken, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares, except for the lock-up arrangements described
in the Prospectus.

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<PAGE> 16

9. Indemnification and Contribution. (a) The Company and each of Dennis J.
Keller and Ronald L. Taylor (collectively, the "Indemnifying Selling
Stockholders"), jointly and severally, agree to indemnify and hold harmless
each of you and each other Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition to
any liability which the Company or any Indemnifying Selling Stockholder may
otherwise have.

(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or any Indemnifying Selling
Stockholder, such Underwriter or such controlling person shall promptly notify
the parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and the indemnifying parties and such Underwriter or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same

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<PAGE> 17

counsel has been proposed) due to actual or potential differing interests
between them (in which case the indemnifying party shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which firm shall be
designated in writing by Smith Barney Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not
be liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.

(c) Each of the Selling Stockholders who are not Indemnifying Seller
Stockholders (collectively, the "Non-Indemnifying Selling Stockholders")
agrees, severally and not jointly, to indemnify and hold harmless each of you
and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act to the
same extent as the foregoing indemnity from the Company and the Indemnifying
Stockholders to each Underwriter, but only with respect to the information
furnished in writing by or on behalf of such Non-Indemnifying Selling
Stockholder expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against any Underwriter, any such
controlling person of any Underwriter, the Company, any of its directors, any
such officer, or any such controlling person of the Company, based on the
Registration Statement, the Prospectus or any Prepricing Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against any Non-Indemnifying Selling Stockholder pursuant to this
paragraph (c), such Non-Indemnifying Selling Stockholder shall have the rights
and duties given to the Company by paragraph (b) above (except that if the
Company shall have assumed the defense thereof such Non-Indemnifying Selling
Stockholder shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Non-Indemnifying Selling Stockholder's expense),
and each Underwriter, each such controlling person of any Underwriter, the
Company, its directors, any such officer, and any such controlling person of
the Company shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which any Non- Indemnifying Selling Stockholder may otherwise
have.

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<PAGE> 18

(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, each Selling Stockholder, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company
and the Selling Stockholders to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, any Selling Stockholder,
or any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
the Selling Stockholders, and any such controlling person shall have the rights
and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Underwriter
may otherwise have.

(e) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other hand
from the offering of the Shares, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholders, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the

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<PAGE> 19

notes to the table on the cover page of the Prospectus. The relative fault of
the Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

(f) The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by a pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.

(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.

(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling

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<PAGE> 20

any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.

(i) Notwithstanding any other provision of this Section 9, the total
liability of any Selling Stockholder for indemnification or contribution under
this Section 9 shall not exceed an amount equal to the number of Shares sold by
such Selling Stockholder hereunder multiplied by the purchase price per share
set forth in Section 2 hereof.

10. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the following
conditions:

(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; if an additional registration statement is required to register a
portion of the Shares under the Act, a 462(b) Registration Statement with
respect to such Shares shall have been filed with the Commission and become
effective not later than 10:00 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you; no stop
order suspending the effectiveness of the registration statement shall have
been issued and no proceeding for that purpose shall have been instituted or,
to the knowledge of the Company or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the registration statement or the prospectus or otherwise) shall
have been complied with to your satisfaction.

(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company or any Selling
Stockholder which makes any statement made in the Prospectus untrue or which,
in the opinion of the Company and its counsel or the Underwriters and their
counsel, requires the making of any addition to or change in the Prospectus in
order to state a material fact required by the Act or any other law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such event
or development would, in your opinion, as Representatives of the several
Underwriters, materially adversely affect the market for the Shares.

(c) You shall have received on the Closing Date, an opinion of
Mayer, Brown & Platt, counsel for the Company and the Selling Stockholders,
dated the Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:

(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the

20
<PAGE> 21

Registration Statement and the Prospectus (and any amendment or supplement
thereto), and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole;

(ii) Each of the Subsidiaries is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization, with full corporate power and authority to own, lease, and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto); and all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or indirectly through one
of the other Subsidiaries, free and clear of any perfected security interest,
or, to the best knowledge of such counsel after reasonable inquiry, any other
security interest, lien, adverse claim, equity or other encumbrance;

(iii) The authorized and outstanding capital stock of the Company is as
set forth under the caption "Capitalization" in the Prospectus; and the
authorized capital stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock";

(iv) All the shares of capital stock of the Company outstanding prior to
the issuance of the Shares to be issued and sold by the Company hereunder, have
been duly authorized and validly issued, and are fully paid and nonassessable;

(v) The Shares to be issued and sold to the Underwriters by the Company
hereunder have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive, or
to the best knowledge of such counsel after reasonable inquiry, similar rights
that entitle or will entitle any person to acquire any Shares upon the issuance
thereof by the Company;

(vi) The form of certificates for the Shares conforms to the requirements
of the Delaware General Corporation Law;

(vii) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to the best knowledge of such
counsel after reasonable inquiry, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any required filing
of the Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b);

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<PAGE> 22

(viii) The Company has corporate power and authority to enter into this
Agreement and to issue, sell and deliver the Shares to be sold by it to the
Underwriters as provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles;

(ix) Neither the Company nor any of the Subsidiaries is in violation of
its respective certificate or articles of incorporation or bylaws, or other
organizational documents, or to the best knowledge of such counsel after
reasonable inquiry, is in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness, except as may be disclosed in the Prospectus;

(x) Neither the offer, sale or delivery of the Shares, the execution,
delivery or performance of this Agreement, compliance by the Company with the
provisions hereof nor consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or any agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties is bound that is an exhibit to the
Registration Statement or to any Incorporated Document, or is known to such
counsel after reasonable inquiry, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
or any of the Subsidiaries, nor will any such action result in any violation of
any existing law, regulation, ruling (assuming compliance with all applicable
state securities and Blue Sky laws), judgment, injunction, order or decree
known to such counsel after reasonable inquiry, applicable to the Company, the
Subsidiaries or any of their respective properties;

(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company (except as have been obtained under the Act and the Exchange Act or
such as may be required under state securities or Blue Sky laws governing the
purchase and distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriters as contemplated by this Agreement;

(xii) The Registration Statement and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as to
form in all material respects with the requirements of the Act; and each of the
Incorporated Documents (except for the financial statements and the notes

22
<PAGE> 23

thereto and the schedules and other financial and statistical data included
therein, as to which counsel need not express any opinion) complies as to form
in all material respects with the Exchange Act and the rules and regulations of
the Commission thereunder;

(xiii) To the best knowledge of such counsel after reasonable inquiry, (A)
other than as described or contemplated in the Prospectus (or any supplement
thereto), there are no legal or governmental proceedings pending or threatened
against the Company or any of the Subsidiaries, or to which the Company or any
of the Subsidiaries, or any of their property, is subject, which are required
to be described in the Registration Statement or Prospectus (or any amendment
or supplement thereto) and (B) there are no agreements, contracts, indentures,
leases or other instruments, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required, as the case
may be;

(xiv) To the best knowledge of such counsel after reasonable inquiry,
neither the Company nor any of the Subsidiaries is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries;

(xv) The statements in the Registration Statement and Prospectus (other
than the statements under the headings "Risk Factors--Dependence on Student
Financial Aid; Prior Non-Compliance" with Financial Aid Regulation," "--Student
Loan Defaults," "--State Approval and Licensing" and "-- Effect of Changes in
CPA Examination Requirements" and "Business--Accreditation and Approvals," "--
State and Provincial Approval and Licensing," "--Financial Aid and Financing
Student Education" and "--Student Loan Defaults," as to which such counsel
need not express an opinion), insofar as they are descriptions of contracts,
agreements or other legal documents, refer to statements of law or legal
conclusions or constitute summaries of applicable laws and regulations or of
judicial or administrative proceedings, are accurate and complete and present
fairly the information purported to be shown;

(xvi) This Agreement and the Custody Agreement have each been duly
executed and delivered by or on behalf of each of the Selling Stockholders and
are valid and binding agreements of each Selling Stockholder enforceable
against each Selling Stockholder in accordance with their terms;

23
<PAGE> 24

(xvii) To the knowledge of such counsel, each Selling Stockholder has
full legal right, power and authorization, and any approval required by law, to
sell, assign, transfer and deliver good and marketable title to the Shares
which such Selling Stockholder has agreed to sell pursuant to this Agreement;

(xviii) The execution and delivery of this Agreement and the Custody
Agreement by the Selling Stockholders and the consummation of the transactions
contemplated hereby and thereby will not conflict with, violate, result in a
breach of or constitute a default under the terms or provisions of any
agreement, indenture, mortgage or other instrument known to such counsel to
which any Selling Stockholder is a party or by which any of them or any of
their assets or property is bound, or any court order or decree or any law,
rule, or regulation applicable to any Selling Stockholder or to any of the
property or assets of any Selling Stockholder;

(xix) Upon delivery of the Shares pursuant to this Agreement and
payment therefor as contemplated herein the Underwriters will acquire good and
marketable title to the Shares free and clear of any lien, claim, security
interest, or other encumbrance, restriction on transfer or other defect in
title; and

(xx) Although counsel has not undertaken, except as otherwise indicated
in their opinion, to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof (including review and discussion of the contents of all
Incorporated Documents), and nothing has come to the attention of such counsel
that has caused them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
the Closing Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus or
any Incorporated Document).

In rendering their opinion as aforesaid, counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or the
Company as to laws of any jurisdiction other than the United States and the
States of Delaware, Illinois and New York, provided that (1) each such local
counsel is acceptable to the Representatives, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Representatives and is, in form and substance satisfactory to
them and

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<PAGE> 25

their counsel, and (3) counsel shall state in their opinion that they believe
that they and the Underwriters are justified in relying thereon.

(d) You shall have received on the Closing Date, an opinion of Marilynn J.
Cason, Esq., corporate counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the effect
that:

(i) The Company and each of the Subsidiaries has full corporate
power and authority, and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies, including, without limitation,
all permits required for participation in Title IV Programs (except where the
failure so to have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the aggregate, would
not have a material adverse effect on the business, properties, operations or
financial condition of the Company and the Subsidiaries taken as a whole), to
own their respective properties and to conduct their respective businesses as
now being conducted, as described in the Prospectus;

(ii) Except as disclosed in the Prospectus, the Company owns of record,
directly or indirectly, all the outstanding shares of capital stock of each of
the Subsidiaries free and clear of any lien, adverse claim, security interest,
equity, or other encumbrance;

(iii) Other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental proceedings pending or
threatened against the Company or any of the Subsidiaries, or to which the
Company or any of the Subsidiaries, or any of their property, is subject, which
are required to be described in the Registration Statement or Prospectus (or
any amendment or supplement thereto);

(iv) There are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;

(v) The Company and the Subsidiaries own all patents, trademarks,
trademark registrations, service marks, service mark registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights described in
the Prospectus as being owned by them or any of them or necessary for the
conduct of their respective businesses, and such counsel is not aware of any
claim to the contrary or any challenge by any other person to the rights of the
Company and the Subsidiaries with respect to the foregoing;

(vi) Neither the Company nor any of the Subsidiaries is in violation of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or of any decree of any
court or governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries;

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<PAGE> 26

(vii) Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and such counsel
does not know of any commitment, plan or arrangement to issue, any shares of
capital stock of the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company;

(viii) Except as described in the Prospectus, there is no holder of any
security of the Company or any other person who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, the Shares or the right to have any
Common Stock or other securities of the Company included in the registration
statement or the right, as a result of the filing of the registration
statement, to require registration under the Act of any shares of Common Stock
or other securities of the Company:

(ix) Except as described in the Prospectus, the Company and the
Subsidiaries are duly qualified under and in full compliance with all
applicable laws and regulations in each jurisdiction in which such entity
participates in student financial aid programs, and no proceeding for the
suspension, limitation or termination of any such entity's participation in such
financial aid programs have been initiated or threatened by any United States
or state regulatory agency or by any Canadian or provincial regulatory agency;
and

(x) The statements in the Registration Statement and Prospectus under
the headings "Risk Factors--Dependence on Student Financial Aid; Prior
Non-Compliance with Financial Aid Regulation," "--Student Loan Defaults",
"--State Approval and Licensing" and "--Effects of Changes in CPA Examination
Requirements" and "Business--Accreditation and Approvals," "--State and
Provincial Approval and Licensing," "--Financial Aid and Financing Student
Education" and "--Student Loan Defaults" and "Legal Proceedings," insofar as
they are descriptions of contracts, agreements or other legal documents, refer
to statements of law or legal conclusions or constitute summaries of applicable
laws and regulations or of judicial or administrative proceedings, are accurate
and complete and present fairly the information purported to be shown.

(e) You shall have received on the Closing Date an opinion of Katten
Muchin & Zavis, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (v), (vii), (viii), (xii) and (xxi) of
the foregoing paragraph (c) and such other related matters as you may request.

(f) You shall have received letters addressed to you, as Representatives
of the several Underwriters, and dated the date hereof and the Closing Date
from Price Waterhouse LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.

(g)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectus (or any amendment or Supplement thereto); (iii) there shall
not have been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse
change in the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries taken as
a whole; (iv) the Company and the Subsidiaries shall not have any liabilities
or obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the

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<PAGE> 27

chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(g) and in
Section 10(h) hereof.

(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.

(i) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by or on behalf of the Selling Stockholders to the effect set forth in
this Section 10(i) and in Section 10(j) hereof.

(j) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by them hereunder at or
prior to the Closing Date.

(k) Prior to the Closing Date the shares of Common Stock which the
Company agrees to sell pursuant to this Agreement shall have been listed,
subject to notice of issuance, on the New York Stock Exchange.

(l) The Sellers shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have requested.

All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.

Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.

The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (i) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d) and
(e) shall be revised to reflect the sale of Additional Shares.

11. Expenses. The Sellers (in proportion to the number of Shares being
offered by each of them, including any Additional Shares which the Underwriters
shall have elected to purchase) agree to pay the following costs and expenses
and all other costs and expenses incident

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<PAGE> 28

to the performance by them of their obligations hereunder: (i) the preparation,
printing or reproduction, and filing with the Commission of the registration
statement (including financial statements and exhibits thereto), each
Prepricing Prospectus, the Prospectus, and each amendment or supplement to any
of them; (ii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the registration statement, each Prepricing Prospectus, the Prospectus, the
Incorporated Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with the offering and sale of
the Shares; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp taxes in
connection with the original issuance and sale of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock Exchange;
(vi) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states as provided in Section
5(g) hereof (including the reasonable fees, expenses and disbursements of
counsel for the Underwriters relating to such registration and qualification);
(vii) the filing fees and the fees and expenses of counsel for the Underwriters
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.; (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares; and (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Selling
Stockholders.

12. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective
amendment has been released by the Commission. Until such time as this
Agreement shall have become effective, it may be terminated by the Company, by
notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company and the Selling Stockholders.

If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing
Date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Smith Barney Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or

28
<PAGE> 29

refuse to purchase Shares which it or they are obligated to purchase on the
Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule II hereto who, with your approval
and the approval of the Company, purchases Shares which a defaulting
Underwriter is obligated, but fails or refuses, to purchase.

Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York or Illinois shall have been declared by either federal
or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the effect of which
on the financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.

14. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first and third paragraphs under the
caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.

15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be

29
<PAGE> 30

delivered (i) if to the Company, at the office of the Company at One Tower
Lane, Oakbrook Terrace, Illinois 60181, Attention: Marilynn J. Cason, Senior
Vice President, General Counsel and Corporate Secretary; or (ii) if to the
Selling Stockholders, at , Attention: ________________________, or
(iii) if to you, as Representatives of the several Underwriters, care of Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention:
Manager, Investment Banking Division.

This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Shares
in his status as such purchaser.

16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.

This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

30
<PAGE> 31

Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.

Very truly yours,

DEVRY INC.

By _____________________________________
Dennis J. Keller
Chairman of the Board and Chief
Executive Officer

Each of the Selling Stockholders
named in Schedule I hereto

By _____________________________________
Attorney-in-Fact

Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.

SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
ABN AMRO CHICAGO CORPORATION
ALEX. BROWN & SONS INCORPORATED

As Representatives of the Several Underwriters

By: SMITH BARNEY INC.

By ___________________________
Managing Director

31
<PAGE> 32

SCHEDULE I

NAME OF COMPANY

Part A - Firm Shares

<TABLE>
<CAPTION>
Number of
Selling Stockholders Firm Shares
------------------------ -----------
<S> <C>
Donald J. Keller ..........
Ronald L. Taylor ..........
Robert E. King ............

---------
Total........ 1,000,000
---------
</TABLE>

Part B - Additional Shares

Number of
Selling Stockholder Additional Shares
-------------------- -----------------
<S> <C>
Ronald L. Taylor .........

-------
Total........ 100,000
-------

</TABLE>

32
<PAGE> 33

SCHEDULE II

NAME OF COMPANY

<TABLE>
<CAPTION>
Number of
Underwriter Firm Shares
- ----------- -----------
<S> <C>

Smith Barney Inc..................................
Credit Suisse First Boston Corporation............
ABN AMRO Chicago Corporation......................
Alex. Brown & Sons Incorporated ..................

---------
Total..... 2,000,000
---------

</TABLE>

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
DeVRY INC.

The undersigned, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware, as amended (the
"Corporation"), DOES HEREBY CERTIFY as follows:

1. The Certificate of Incorporation of the Corporation was filed in the
Office of the Secretary of State of the State of Delaware on August 3, 1987, and
amended on August 7, 1987, December 8, 1987, June 11, 1990, June 11, 1991, June
21, 1991 and February 9, 1995.

2. On August 20, 1996 and November 19, 1996, in the manner prescribed by
Sections 242 and 245 of the General Corporation Law of the State of Delaware, as
amended, resolutions were duly adopted by the Board of Directors and the
stockholders of the Corporation, respectively, duly amending the certificate of
incorporation of the Corporation as herein provided.

3. The text of the amended section of the certificate of incorporation
of the Corporation as amended and restated herein, shall read as follows:

* * *

FOURTH: The total number of shares which the Corporation shall have
authority to issue is seventy-five million (75,000,000), consisting of
seventy-five million (75,000,000) shares of Common Stock, par value $.01 per
share (the "Common Stock").

IN WITNESS WHEREOF, the Corporation has caused this amendment to the
Restated Certificate of Incorporation to be signed by its President and attested
by its Secretary.

DeVRY INC.

(Corporate Seal) By: /s/Ronald L. Taylor
------------------------------
Ronald L. Taylor
President

ATTEST:

/s/Marilynn J. Cason
- -----------------------------
Marilynn J. Cason
Secretary
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
DeVRY INC.

The undersigned, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware, as amended (the
"Corporation"), DOES HEREBY CERTIFY as follows:

2. On August 4, 1994 and November 15, 1994, in the manner prescribed by
Sections 242 and 245 of the General Corporation Law of the State of Delaware, as
amended, resolutions were duly adopted by the Board of Directors and the
stockholders of the Corporation, respectively, duly amending the certificate of
incorporation of the Corporation as herein provided.

3. The text of the amended section of the certificate of incorporation
of the Corporation as amended and restated herein, shall read as follows:

* * *

FOURTH: The total number of shares which the Corporation shall have
authority to issue is twenty million (20,000,000), consisting of twenty million
(20,000,000) shares of Common Stock, par value $.01 per share (the "Common
Stock").

IN WITNESS WHEREOF, the Corporation has caused this amendment to the
Restated Certificate of Incorporation to be signed by its President and attested
by its Secretary.

DeVRY INC.

(Corporate Seal) By: /s/Ronald L. Taylor
------------------------------
Ronald L. Taylor
President

ATTEST:

/s/Marilynn J. Cason
- ------------------------------
Marilynn J. Cason
Secretary
<PAGE> 3
CERTIFICATE OF CORRECTION

RESTATED CERTIFICATE OF INCORPORATION

DeVRY INC.

DeVRY INC., a Delaware corporation (the "Corporation"), pursuant to Section
103(f) of the General Corporation Law of the State of Delaware, as amended,
hereby certifies that:

1. The Restated Certificate of Incorporation of the Company, which was
filed with the Secretary of State of the State of Delaware on June 11, 1991, is
an inaccurate record of the corporate action therein referred to.

2. Said Restated Certificate of Incorporation is incorrect in that
paragraph number 3 on the first page of the Restated Certificate of
Incorporation states that the Restated Certificate of Incorporation is not to
become effective until 9:00 a.m. Chicago time on June 28, 1991, whereas it
should state that the Restated Certificate of Incorporation is not to become
effective until 9:00 a.m. Chicago time on June 27, 1991.

3. Paragraph number 3 on the first page of the Restated Certificate of
Incorporation in correct form is as follows:

"3. Pursuant to the provisions of Section 103(d) of the General
Corporation Law of the State of Delaware, as amended, this Restated
Certificate of Incorporation is not to become effective until 9:00 a.m.
Chicago time on June 27, 1991."
<PAGE> 4
IN WITNESS WHEREOF, DeVRY INC. has caused this Certificate of Correction to
be signed by Ronald L. Taylor, its President and attested by Marilynn J. Cason,
its Secretary, this 20th day of June, 1991.

DeVRY INC.

(Corporate Seal) By: /s/Ronald L. Taylor
------------------------------
Ronald L. Taylor
President

ATTEST:

/s/Marilynn J. Cason
- ------------------------------
Marilynn J. Cason
Secretary
<PAGE> 5
CERTIFICATE OF CORRECTION

RESTATED CERTIFICATE OF INCORPORATION

DeVRY INC.

DeVRY INC., a Delaware corporation (the "Corporation"), pursuant to Section
103(f) of the General Corporation Law of the State of Delaware, as amended,
hereby certifies that:

2. Said Restated Certificate of Incorporation is incorrect in that
paragraph number 3 on the first page of the Restated Certificate of
Incorporation states that the Restated Certificate of Incorporation is not to
become effective until 9:00 a.m. Chicago time on June 19, 1991, whereas it
should state that the Restated Certificate of Incorporation is not to become
effective until 9:00 a.m. Chicago time on June 28, 1991.

3. Paragraph number 3 on the first page of the Restated Certificate of
Incorporation in correct form is as follows:

"3. Pursuant to the provisions of Section 103(d) of the General
Corporation Law of the State of Delaware, as amended, this Restated
Certificate of Incorporation is not to become effective until 9:00 a.m.
Chicago time on June 28, 1991."
<PAGE> 6
IN WITNESS WHEREOF, DeVRY INC. has caused this Certificate of Correction to
be signed by Ronald L. Taylor, its President and attested by Marilynn J. Cason,
its Secretary, this 17th day of June, 1991.

DeVRY INC.

By: /s/Ronald L. Taylor
-------------------------
Ronald L. Taylor
President

ATTEST:

/s/Marilynn J. Cason
- ---------------------------
Marilynn J. Cason
Secretary
<PAGE> 7

RESTATED CERTIFICATE OF INCORPORATION

DeVRY INC.

The undersigned, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware, as amended (the
"Corporation"), DOES HEREBY CERTIFY as follows:

1. The Certificate of Incorporation of the Corporation was filed in the
Office of the Secretary of State of the State of Delaware on August 3, 1987 and
amended on August 7, 1987, December 8, 1987 and June 11, 1990.

2. On May 14, 1991 and June 4, 1991, in the manner prescribed by
Sections 242 and 245 of the General Corporation Law of the State of Delaware, as
amended, resolutions were duly adopted by the Board of Directors and the
stockholders of the Corporation, respectively, duly adopting this Restated
Certificate of Incorporation and amending the certificate of incorporation of
the Corporation as herein provided.

3. Pursuant to the provisions of Section 103(d) of the General
Corporation Law of the State of Delaware, as amended, this Restated Certificate
of Incorporation is not to become effective until 9:00 a.m. Chicago time on June
19, 1991.

4. The text of the certificate of incorporation of the Corporation as
amended and restated herein, shall, at the effective time of this Restated
Certificate of Incorporation, read as follows:

* * *

FIRST: The name of the Corporation is DeVRY INC. (hereinafter the
"Corporation").

SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of the registered agent at that address is The Corporation
Trust Company.
<PAGE> 8
THIRD: The purpose of the Corporation is:

1. To establish degree-granting educational institutions in which
individuals may be taught such branches of useful, practical and/or
general knowledge as shall prepare them for a career, a profession, or
occupations requiring knowledge in the arts and sciences, as well as
further study and educational activities. To impart instruction,
conduct examinations, and confer academic degrees in branches of
engineering technology, business operations, telecommunications,
information systems, and other branches of human knowledge. To
prepare, manufacture, sell and generally deal in books, lesson and
examination papers, drawings, instruments, tools and school supplies
of every class and description; and

2. To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware,
as amended (the "GCL").

FOURTH: The total number of shares which the Corporation shall have
authority to issue is ten million (10,000,000), consisting of ten million
(10,000,000) shares of Common Stock, par value $.01 per share (the "Common
Stock").

SECTION

Common Stock

A. A statement of the designations, powers, preferences, rights,
qualifications, limitations and restriction in respect of the shares of Common
Stock is as follows:

(1) Dividends. The Board of Directors of the Corporation may cause
dividends to be paid to the holders of shares of Common Stock out of funds
legally available for the payment of dividends by declaring an amount per share
as a dividend. When and as dividends are declared, whether payable in cash, in
property or in shares of stock of the Corporation, the holders of Common Stock
shall be entitled to share equally, share for share, in such dividends. No
dividends shall be declared or paid in shares of

-2-
<PAGE> 9
Common Stock, or options, warrants, or rights to acquire such a stock or
securities convertible into or exchangeable for shares of such stock, except
dividends payable ratably according to the number of shares of Common Stock held
by them, in shares of, or securities convertible into or exchangeable for,
Common Stock to holders of that class of stock.

(2) Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Common Stock shall be entitled, to share, ratably according to the
number of shares of Common Stock held by them, in all remaining assets of the
Corporation available for distribution to its stockholders.

(3) Voting Rights. Except as otherwise provided in this Certificate of
Incorporation or by applicable law, the holders of Common Stock shall be
entitled to vote on each matter on which the stockholders of the Corporation
shall be entitled to vote, and each holder of Common Stock shall be entitled to
one vote for each share of such stock held by him.

FIFTH: At all meetings of stockholders, each stockholder shall be entitled
to vote, in person or by proxy, the shares of voting stock owned by such
stockholders of record on the record date for the meeting. When a quorum is
present or represented at any meeting, the vote of the holders of a majority of
the voting power of all of the shares of stock of the Corporation outstanding
and entitled to vote on any matter, question or proposal brought before such
meeting shall decide such question, unless the question is one upon which, by
express provision of law, this Certificate of Incorporation or the By-Laws, a
different vote is required, in which case such express provision shall govern
and control the decision of such question.

SIXTH: The Corporation is to have perpetual existence.

SEVENTH: The number of directors of the Corporation shall be fixed from
time to time by the vote of a majority of the entire Board of Directors, but
such number shall in no case be less than three nor more than 12. Any such
determination made by the Board of Directors shall continue in effect unless and
until changed by the Board of Directors, but no such changes shall affect the
term of any directors then in office.

-3-
<PAGE> 10
The directors shall be divided into three classes, designated Class I,
Class II and Class III. Each class shall consist, as nearly as may be possible,
of one-third of the total number of directors constituting the entire Board of
Directors. At the 1991 annual meeting of stockholders, Class I directors shall
be elected for a one-year term, Class II directors for a two-year term and Class
III directors for a three-year term. At each succeeding annual meeting of
stockholders beginning in 1992, successors to the class of directors whose term
expires at the annual meeting shall be elected for a three-year term. If the
authorized number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible, and any additional director of any class
elected to fill a vacancy resulting from any increase in such class shall hold
office for a term that shall coincide with the remaining term of that class, but
in no case will a decrease in the number of directors shorten the term of any
incumbent director. A director shall hold office until the annual meeting for
the year in which his or her term expires and until his or her successor shall
be elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Subject to the By-laws, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business. From and after June 30, 1993, any vacancy on the Board
of Directors that results from an increase in the number of directors shall be
filled only by a majority of the Board of Directors then in office, provided
that a quorum is present, and any other vacancy occurring in the Board of
Directors shall be filled by a majority of the directors then in office, even if
less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy not resulting from an increase in the number of directors shall
have the same remaining term as that of his or her predecessor.

From and after June 30, 1993, any director elected by the stockholders, or
by the Board of Directors to fill a vacancy, may be removed only for cause by
the affirmative vote of the holders of a majority of the votes which could be
cast by the holders of all of the outstanding shares of capital stock entitled
to vote for the election of directors, voting together as a class, given at a
duly called annual or special meeting of stockholders.

-4-
<PAGE> 11
Advance notice of nominations for the election of directors, other than
nominations by the Board of Directors or a committee thereof, shall be given to
the Corporation in the manner provided in the By-laws.

EIGHTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:

(1) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.

(2) The directors shall have concurrent power with the stockholders to
make, alter, amend, change, add to or repeal the By-Laws of the Corporation.

(3) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the GCL, this
Certificate of Incorporation, and any By-Laws adopted by the stockholders;
provided, however, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
By-Laws had not been adopted.

NINTH: (1) Meetings of stockholders may be held within or without the
State of Delaware as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.

(2) Any action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual special meeting of such
holders and may not be effected by a consent in writing by any such holders.

(3) Except as otherwise required by law, from and after June 30, 1993,
special meetings of the stockholders of the Corporation may be called only by
(i) the Board of Directors pursuant to a resolution approved by the affirmative
vote of a majority of the directors then in office, (ii) the Chairman

-5-
<PAGE> 12

of the Board, if one is elected or (iii) the President. Prior to June 30, 1993,
special meetings of the stockholders may be called either by the person referred
to in clauses (i), (ii) and (iii), or by any person(s) holding 5% or more of the
outstanding Common Stock. Only those matters set forth in the notice of the
special meeting may be considered or acted upon at such special meeting, unless
otherwise provided by law.

TENTH: (1) The Corporation shall, to the fullest extent permitted by
Section 145 of the GCL, as the same may be amended and supplemented, indemnify
any and all directors and officers whom it shall have power to indemnify under
said Section and may, upon the act of the Board of Directors, indemnify all
other persons whom it shall have power to indemnify under said Section, from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said Section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as a
director or officer who has ceased to be a director or officer, and shall inure
to the benefit of the heirs, executors and administrators of the director or
officer, and may, upon such act of the Board of Directors, continue as to such
other persons and inure to the benefit of the heirs, executors and
administrators of such other persons.

(2) No director shall be personally liable to the Corporation or any of
its stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability (1) for breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the GCL or (iv) for any transaction from which
the director derived any improper personal benefit. Any repeal or modification
of this ARTICLE TENTH by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification with respect to acts or omissions occurring
prior to such repeal or modification.

-6-
<PAGE> 13
ELEVENTH: In addition to any other considerations which the Board of
Directors may lawfully take into account, in determining whether to take or to
refrain from taking corporate action or any matter, including proposing any
matter to the stockholders of the Corporation, the Board of Directors may take
into account the long-term as well as short-term interests of the Corporation
and its stockholders (including the possibility that these interests may be best
served by the continued independence of the Corporation), customers, employees,
students, graduates, faculty and other constituencies of the Corporation and its
subsidiaries, including the effect upon communities in which the Corporation and
its subsidiaries do business.

TWELFTH: The Corporation reserves the right to repeal, alter or amend this
Certificate of Incorporation in the manner now or hereafter prescribed by
statute. No repeal, alteration or amendment of this Certificate of
Incorporation shall be made unless the same is first approved by the Board of
Directors of the Corporation pursuant to a resolution adopted by the directors
then in office in accordance with the By-laws and applicable law and thereafter
approved by the stockholders.

THIRTEENTH: The Corporation has elected not to be governed by Section 203
of the GCL.

FOURTEENTH: The Certificate of Incorporation of the Corporation, as herein
amended, shall constitute a restatement of, and shall supersede the Certificate
of Incorporation of the Corporation, as previously awarded.

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of
Incorporation to be signed by its President and attested by its Secretary.

DEVRY INC.

(Corporate Seal) By:/s/Ronald L. Taylor
-----------------------
Ronald L. Taylor
President

ATTEST:

/s/ Marilynn J. Cason
- -----------------------------
Marilynn J. Cason
Secretary

-7-

<PAGE> 1
Exhibit 5.1

February 26, 1997

Devry Inc.
One Tower Lane
Oakbrook Terrace, Illinois 60181

Re: Devry Inc.
Registration Statement on Form S-3
----------------------------------

Dear Ladies and Gentlemen:

We have represented Devry Inc., a Delaware corporation (the "Company"), in
connection with the registration of 2,300,000, shares of Common Stock, par
value $0.01 per share, of the Company (the "Shares") and the sale of such
Shares to the public pursuant to an underwriting agreement (the "Underwriting
Agreement") between the Company, certain selling stockholders (the "Selling
Stockholders") and the underwriters party thereto.

In connection with our representation, we have examined the corporate
records of the Company, including its Certificate of Incorporation, its
By-Laws, and other corporate records and documents and have made such other
examinations as we consider necessary to render this opinion. Based upon the
foregoing, it is our opinion that:

(i) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware;

(ii) the Shares to be sold by the Selling Stockholders have
been validly issued, and are fully paid and non-assessable; and

(iii) the Shares to be sold by the Company will be validly issued
and, assuming such Shares are sold pursuant to the terms of the
Underwriting Agreement, fully paid and non-assessable.

We consent to the filing of this opinion as an exhibit to the registration
statement referred to above and to all references to this firm in such
registration statement.

Very truly yours,

/s/ Mayer, Brown & Platt

Mayer, Brown & Platt

<PAGE> 1
EXHIBIT 10.1

AMENDED AND RESTATED
DEVRY INC.
STOCK INCENTIVE PLAN
(Revised 2/18/97)

1. Purpose. The Amended and Restated DeVry Inc. Stock Incentive Plan (the
"Plan") has been established by DeVry Inc. (the "Company") to aid the Company
and its Subsidiaries (as defined below) in attracting, rewarding and retaining
well-qualified directors and executive and managerial personnel and to further
the identity of the interests of such individuals with the interests of the
Company's shareholders. The term "Subsidiary" means any corporation during any
period in which the Company owns directly or indirectly, at least 50% of the
total combined voting power of all classes of stock entitled to vote.

2. Administration. The authority to manage and control the operation and
administration of the Plan shall be vested in the Plan Committee, subject to
approval by the Compensation Committee of the Board of Directors. The Plan
Committee shall consist of members of the Company's Board of Directors who are
full-time, salaried employees of the Company. All determinations of the Plan
Committee shall be made by a majority of its members. Any interpretation of
the Plan by the Plan Committee and any decision made by it under the Plan are
final and binding on all persons.

3. Participation. Subject to the terms and conditions of the Plan and
approval by the Compensation Committee of the Board of Directors of actions
taken with respect to employees, the Plan Committee shall determine and
designate, from time to time, the directors and key executives and managerial
employees of the Company and its subsidiaries to whom stock options are to be
granted or awarded (the "Participants"), and the number thereof to be granted or
awarded to each Participant. Except as otherwise agreed to by the Company and
the Participant, any grant or award under this Plan shall not affect any
previous grant or award to the Participant by the Company under this Plan or any
other plan maintained by the Company or its Subsidiaries.

4. Automatic Grant of Option to Plan Committee. Notwithstanding Paragraph 3
above, directors who are members of the Plan Committee shall receive, for
service as a director, only an automatic nondiscretionary stock option grant on
August 18 of every year during the term of the Plan. The amount of shares
subject to option that will be automatically granted to each director who is a
member of the Plan Committee for service as a director shall be the lesser of
(i) 500 shares or (ii) that number of shares equal to the largest multiple of 25
whose fair market value on the date of grant does not exceed $15,000.

5. Shares Subject to the Plan. The shares of stock with respect to which
awards or grants may be made under the Plan shall be shares of the Company's
Common Stock, either authorized and unissued shares or shares issued and held in
its treasury. Subject to the provisions of paragraph 12, the aggregate number
of shares of Common Stock with respect to which awards or grants may be made
under the Plan shall not exceed 100,000 shares. If, for any reason, any award

1
<PAGE> 2

or grant under the Plan shall expire, terminate or be forfeited with respect to
any number of shares, such number of shares shall again be available for award
or grant under the Plan.

6. Options. Subject to Paragraph 4 above, the Plan Committee may, from time
to time, grant options to Participants under the Plan. the Plan Committee shall
have complete authority to determine at the time an option is granted whether
such option shall be an incentive stock option qualified under Section 422 of
the Internal Revenue Code, as amended, or whether such option shall be a
nonqualified stock option. The price at which a share of Common Stock may be
purchased pursuant to the exercise of an option under the Plan shall be 100%
(110% in the case of an incentive stock option, as described in Section 422A of
the Internal Revenue Code of 1986, as amended, granted to a 10% shareholder) of
the Fair Market Value (as defined below) of a share of such Common Stock on the
date on which the option is granted. Subject to the provisions of paragraph 12,
for all purposes of the Plan, the "Fair Market Value" of a share of Common Stock
as at any date means the fair market value of such share determined in good
faith by the Plan Committee.

Notwithstanding the foregoing, in no event shall the aggregate Fair Market Value
(determined at the time the option is granted) of the Common Stock with respect
to which incentive stock options are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
Subsidiaries) exceed $100,000.

7. Option Expiration Date. The "Expiration Date" with respect to an option
granted to a Participant under the Plan means the earlier of:

(a) the date which is 10 years (5 years in the cases of an incentive
stock option granted to a 10% shareholder) after the date on which the
option or stock appreciation right is granted; or

(b) the date established by the Board of Directors at the time of the
grant.

8. Exercise of Options. Each option shall be exercisable at such time or
times as shall be determined by the Plan Committee at the time the option is
granted or at such earlier times as the Plan Committee may subsequently
determine. Except as otherwise agreed to between the Company and the
Participant, a Participant's right to exercise any option under the Plan shall
not be affected by any other outstanding stock option granted to the Participant
under this Plan or any other plan maintained by the Company or its Subsidiaries.
A Participant may exercise an option by giving written notice thereof prior to
the Expiration Date to the Secretary of the Company at the Company's corporate
headquarters. Payment of the purchase price of the shares purchased pursuant to
the exercise of a stock option shall be in cash or other consideration,
including shares of Common Stock and Participant notes, as the Board of
Directors may permit.

9. Compliance with Applicable Laws and Withholding of Taxes. Notwithstanding
any other provision of the Plan, the Company shall have no liability to issue
any shares under the Plan unless

2
<PAGE> 3

such issuance would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any shares under the Plan, the Company may require a written statement that
the recipient is acquiring the shares for investment and not for the purpose or
with the intention of distributing the shares. All awards, grants, and payments
under the Plan are subject to withholding of all applicable taxes, which
withholding obligations may be satisfied, with the consent of the Plan
Committee, through the surrender of shares of Common Stock to which a
Participant is otherwise entitled under the Plan.

10. Transferability. Incentive stock options granted under the Plan are not
transferable except by will or by the laws of descent and distribution. Such
incentive stock options may be exercised during the lifetime of the Participant
only by the Participant. Nonqualified stock options may be transferred by the
Participant to, and exercised by, Participant's family members, family trusts,
family partnerships or any other similarly situated transferee approved by the
Plan Committee. Notification and approval of all such transfers shall be in a
form specified by the Plan Committee.

11. Employment and Shareholder Status. The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary. No award or grant under the Plan shall confer upon the holder
thereof any right as a shareholder of the Company prior to the date on which he
fulfills all conditions in receipt of shares of Company stock.

12. Adjustments to Number of Shares Subject to the Plan and to Option Terms.
Subject to the following provisions of this paragraph 12, in the event of any
change in the outstanding shares of Common Stock of the Company by reason of any
stock dividend, split, recapitalization, merger, consolidation, combination,
exchange of shares or other similar change, the aggregate number of shares with
respect to which awards or grants may be made under the Plan and the terms of
any outstanding option shall be equitably adjusted by the Plan Committee subject
to approval by the Compensation Committee. Notwithstanding the preceding
sentence, in no event shall any fraction of a share of stock be issued under the
Plan.

13. Agreement With Company. At the time of any grant under the Plan, the Plan
Committee may require a Participant to enter into an agreement with the Plan
Committee in a form specified by the Plan Committee, agreeing to the terms and
condition of the Plan and to such additional terms and conditions (including but
not limited to a call provision), not inconsistent with the Plan, as the Plan
Committee may, in it sole discretion, prescribe.

14. Term of Plan. Subject to the approval of the stockholder of the Company
at the Company's 1992 annual meeting of it shareholders, the Plan shall be
effective as of August 18, 1992. No options may be granted under the Plan after
June 30, 2002.

15. Amendment and Termination of Plan. Subject to the following provisions of
this paragraph 15, the Plan Committee of the Company may at any time amend,
suspend or terminate the Plan. No amendment of the Plan and, except as provided
in paragraph 12, no action of the

3
<PAGE> 4

Plan Committee shall, without further approval of the shareholders of the
Company:

(a) increase the total number of shares of Common Stock with respect to
which awards or grants may be made under the Plan or otherwise
materially increase the benefits to Participants under the Plan;

(b) permit any awards or grants to be made under the Plan after June 30,
2002; or

No amendment, suspension or termination of the Plan shall alter or impair any
option previously granted under the Plan without the consent of the holder
thereof.

<PAGE> 1
EXHIBIT 10.2

DEVRY INC. 1994
STOCK INCENTIVE PLAN
(Revised 2/18/97)

1. Purpose. The DeVRY INC. Stock Incentive Plan (the "Plan") has been
established by DeVRY INC. (the "Company") to provide the Company's directors and
key employees with opportunities to acquire Common Stock of the Company on
favorable terms. The purpose of the Plan is to: (1) provide a means to
attract, retain and reward the company's independent directors for their
judgment and knowledge, on which the Company relies for the continued success of
its operations, by promoting a greater identity of interest between them and the
Company's stockholders and providing an opportunity to share in the future
success of the Company; (2) provide a means to attract and retain competent
personnel; and (3) provide to participating officers and other key employees
long-term incentive for high levels of performance and for extraordinary efforts
to improve the financial performance of the Company.

2. Administration. The authority to manage and control the operation and
administration of the Plan shall be vested in the Plan Committee, subject to
approval by the Compensation Committee of the Board of Directors. The Plan
Committee shall consist of members of the Company's Board of Directors who are
full-time, salaried employees of the Company. All determinations of the Plan
Committee shall be made by a majority of its members. Any interpretation of the
Plan by the Plan Committee and any decision made by it under the Plan are final
and binding on all persons.

3. Participation. Subject to the terms and conditions of the Plan and
approval by the Compensation Committee of the Board of Directors of actions
taken with respect to employees, the Plan Committee shall determine and
designate, from time to time, the directors and key employees of the Company
and its Subsidiaries to whom stock options are to be granted or awarded (the
"Participants"), and the number thereof to be granted or awarded to each
Participant. Except as otherwise agreed to by the Company and the Participant,
any grant or award under this Plan shall not affect any previous grant or award
to the Participant by the Company under this Plan or any other plan maintained
by the Company or its Subsidiaries.

4. Automatic Grant of Option to Plan Committee. Notwithstanding Paragraph 3
above, directors who are members of the Plan Committee shall receive, for
service as a director, only an automatic nondiscretionary stock option grant on
July 1 of every year during the term of the Plan. The amount of shares subject
to option that will be automatically granted to each director who is a member of
the Plan Committee for service as a director shall be the lesser of (i) 500
shares or (ii) that number of shares equal to the largest multiple of 25 whose
fair market value on the date of grant does not exceed $25,000.

<PAGE> 2

paragraph 12, the aggregate number of shares of Common Stock with respect to
which awards or grants may be made under the Plan shall not exceed 200,000
shares. If, for any reason, any award or grant under the Plan shall expire,
terminate or be forfeited with respect to any number of shares, such number of
shares shall again be available for award or grant under the Plan.

7. Option Expiration Date. The "Expiration Date" with respect to an option
granted to a Participant under the Plan means the earlier of:

(a) the date which is 10 years (5 years in the cases of an incentive stock
option granted to a 10% shareholder) after the date on which the
option or stock appreciation right is granted; or

(b) the date established by the Board of Directors at the time of the
grant.

<PAGE> 3

9. Compliance with Applicable Laws and Withholding of Taxes. Notwithstanding
any other provision of the Plan, the Company shall have no liability to issue
any shares under the Plan unless such issuance would comply with all applicable
laws and the applicable requirements of any securities exchange or similar
entity. Prior to the issuance of any shares under the Plan, the Company may
require a written statement that the recipient is acquiring the shares for
investment and not for the purpose or with the intention of distributing the
shares. All awards, grants, and payments under the Plan are subject to
withholding of all applicable taxes, which withholding obligations may be
satisfied, with the consent of the Plan Committee, through the surrender of
shares of Common Stock to which a Participant is otherwise entitled under the
Plan.

14. Term of Plan. Subject to the approval of the stockholder of the Company
at the Company's 1992 annual meeting of it shareholders, the Plan shall be
effective as of August 4, 1994. No options may be granted under the Plan after
June 30, 2004.

<PAGE> 4

(a) increase the total number of shares of Common Stock with respect to
which awards or grants may be made under the Plan or otherwise
materially increase the benefits to Participants under the Plan;

(b) permit any awards or grants to be made under the Plan after June 30,
2004; or

No amendment, suspension or termination of the Plan shall alter or impair any
option previously granted under the Plan without the consent of the holder
thereof.

<PAGE> 1
EXHIBIT 10.3

DEVRY INC. 1991
STOCK INCENTIVE PLAN
(Revised 2/18/97)

1. Purpose. The DeVry Inc. 1991 Stock Incentive Plan (the "Plan") has been
established by DeVry Inc. (the "Company") to aid the Company and its
Subsidiaries (as defined below) in attracting, rewarding and retaining
well-qualified executive and managerial personnel and to futher the identity of
the interests of such personnel with the interest of the Company's
shareholders.. The term "Subsidiary" means any corporation during any period
in which the Company owns directly or indirectly, at least 50% of the total
combined voting power of all classes of stock entitled to vote.

2. Administration. The authority to manage and control the operation and
administration of the Plan shall be vested in the Board of Directors of the
Company. Any interpretation of the Plan by the Board of Directors and any
decision made by it under the Plan is final and binding on all persons.

3. Participation. Subject to the terms and conditions of the Plan, the Board
of Directors shall determine and designate, from time to time, the key
executives and managerial employees of the Company and its subsidiaries to whom
stock options are to be granted or awarded (the "Participants"), and the number
thereof to be granted or awarded to each Participant. Except as otherwise
agreed to by the Company and the Participant, any grant or award under this
Plan shall not affect any previous grant or award to the Participant by the
Company under this Plan or any other plan maintained by the Company or its
Subsidiaries.

4. Shares Subject to the Plan. The shares of stock with respect to which
awards or grants may be made under the Plan shall be shares of the Company's
Common Stock, either authorized and unissued shares or shares issued and held
in its treasury. Subject to the provisions of paragraph 11, the aggregate
number of shares of Common Stock with respect to which awards or grants may be
made under the Plan shall not exceed 20,000 shares. If, for any reason, any
award or grant under the Plan shall expire, terminate or be forfeited with
respect to any number of shares, such number of shares shall again be available
for award or grant under the Plan.

5. Options. The Board of Directors may, from time to time, grant options to
Participants under the Plan. The price at which a share of Common Stock may be
purchased pursuant to the exercise of an option under the Plan shall be 100%
(110% in the case of an incentive stock option, as described in section 422A of
the Internal Revenue Code of 1986, as amended, granted to a 10% shareholder) of
the Fair Market Value (as defined below) of a share of such Common Stock on the
date on which the option is granted. Subject to the provisions of paragraph
11, for all purposes of the Plan, the "Fair Market Value" of a share of Common
Stock as at any date means the fair market value of such share determined in
good faith by the Board of Directors.

Notwithstanding the foregoing, in no event shall the aggregate Fair Market
Value (determined at

<PAGE> 2

the time the option is granted) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by any individual
during any calendar year (under all plans of the Company and its Subsidiaries)
exceed $100,000.

6. Option Expiration Date. The "Expiration Date" with respect to an option
granted to a Participant under the Plan means the earliest of:

(a) the date which is 10 years (5 years in the cases of an
incentive stock option granted to a 10% shareholder) after the date
on which the option or stock appreciation right is granted; or

(b) the date established by the Board of Directors at the time of
the grant.

7. Exercise of Options. Each option shall be exercisable at such time or
times as shall be determined by the Board of Directors at the time the option
is granted or at such earlier times as the Board of Directors may subsequently
determine. Except as otherwise agreed to between the Company and the
Participant, a Participant's right to exercise any option under the Plan shall
not be affected by any other outstanding stock option granted to the
Participant under this Plan or any other plan maintained by the Company or its
Subsidiaries. A Participant may exercise an option by giving written notice
thereof prior to the Expiration Date to the Secretary of the Company at the
Company's corporate headquarters. Payment of the purchase price of the shares
purchased pursuant to the exercise of a stock option shall be in cash or other
consideration, including shares of Common Stock and Participant notes, as the
Board of Directors may permit.

8. Compliance with Applicable Laws and Withholding of Taxes. Notwithstanding
any other provision of the Plan, the Company shall have no liability to issue
any shares under the Plan unless such issuance would comply with all applicable
laws and the applicable requirements of any securities exchange or similar
entity. Prior to the issuance of any shares under the Plan, the Company may
require a written statement that the recipient is acquiring the shares for
investment and not for the purpose or with the intention of distributing the
shares. All awards, grants, and payments under the Plan are subject to
withholding of all applicable taxes, which withholding obligations may be
satisfied, with the consent of the Board of Directors, through the surrender of
shares of Common Stock to which a Participant is otherwise entitled under the
Plan.

9. Transferability. Incentive stock options granted under the Plan are not
transferable except by will or by the laws of descent and distribution. Such
incentive stock options may be exercised during the lifetime of the Participant
only by the Participant. Nonqualified stock options may be transferred by the
Participant to, and exercised by, Participant's family members, family trusts,
family partnerships or any other similarly situated transferee approved by the
Board. Notification and approval of all such transfers shall be in a form
specified by the Board.

10. Employment and Shareholder Status. The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary. No award or grant under the Plan shall confer

<PAGE> 3

upon the holder thereof any right as a shareholder of the Company prior to the
date on which he fulfills all conditions in receipt of shares of Company stock.

11. Adjustments to Number of Shares Subject to the Plan and to Option Terms.
Subject to the following provisions of this paragraph 11, in the event of any
change in the outstanding shares of Common Stock of the Company by reason of
any stock dividend, split, recapitalization, merger, consolidation,
combination, exchange of shares or other similar change, the aggregate number
of shares with respect to which awards or grants may be made under the Plan and
the terms of any outstanding option shall be equitably adjusted by the Board of
Directors in its sole discretion. Notwithstanding the preceding sentence, in
no event shall any fraction of a share of stock be issued under the Plan.

12. Agreement With Company. At the time of any grant under the Plan, the
Board of Directors may require a Participant to enter into an agreement with
the Board of Directors in a form specified by the Board of Directors, agreeing
to the terms and condition of the Plan and to such additional terms and
conditions (including but not limited to a call provision), not inconsistent
with the Plan, as the Board of Directors may, in it sole discretion, prescribe.

13. Term of Plan. Subject to the approval of the stockholders of the Company
at the special meeting of its Company's stockholders, the Plan shall be
effective as of July 1, 1991. No options may be granted under the Plan after
June 30,2001.

14. Amendment and Termination of Plan. Subject to the following provisions of
this paragraph 14, the Board of Directors of the Company may at any time amend,
suspend or terminate the Plan. No amendment of the Plan and, except as
provided in paragraph 11, no action of the Board of Directors shall, without
further approval of the shareholders of the Company:

(a) increase the total number of shares of Common Stock with
respect to which awards or grants may be made under the Plan or
otherwise materially increase the benefits to Participants under
the Plan;

(b) permit any awards or grants to be made under the Plan after
June 30, 2001; or

No amendment, suspension or termination of the Plan shall alter or impair any
option previously granted under the Plan without the consent of the holder
thereof.

<PAGE> 1
EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated August 6, 1996, except as
to the stock split described in Note 11 which is as of December 18, 1996,
relating to the financial statements of DeVRY Inc., which appears in such
Prospectus. We also consent to the application of such report to the Financial
Statement Schedule for the three years ended June 30, 1996 listed under Item
14(a)(2) in the Company's Annual Report on Form 10-K for the year ended June 30,
1996 when such schedule is read in conjunction with the financial statements
referred to in our report. The audits referred to in such report also included
this schedule. We also consent to the references to us under the headings
"Experts" and "Selected Consolidated Financial Data" in such Prospectus.
However, it should be noted that Price Waterhouse LLP has not prepared or
certified such "Selected Consolidated Financial Data".

Price Waterhouse LLP
Chicago, Illinois
February 27, 1997