DEVRY INC, S-3/A, 1997-03-05

DEVRY INC
S-3/A, 1997-03-05
EDUCATIONAL SERVICES

Previous: FIDELITY ADVISOR SERIES VIII, 497J, 1997-03-05

Next: QUESTRON TECHNOLOGY INC, 424B1, 1997-03-05

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 1997

REGISTRATION NO. 333-22457

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

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

AMENDMENT NO. 1 TO

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 OF
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(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value)....... 2,070,000 shares $19.94 $41,275,800 $12,508
=================================================================================================================================
</TABLE>

(1) Includes 270,000 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 March 4, 1997.

(3) The Company has previously paid a registration fee of $17,250.

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 MARCH 5, 1997

PROSPECTUS

1,800,000 SHARES

DEVRY LOGO

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

Of the 1,800,000 shares of common stock (the "Common Stock") offered
hereby, 1,200,000 shares are being sold by DeVRY INC. (the "Company") and
600,000 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 March 4, 1997 was $19.63 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 $300,000.

(3) A Selling Stockholder has granted the Underwriters a 30-day option to
purchase up to 270,000 additional shares of Common Stock 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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

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 10 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, telecommunications
management, technical management, accounting and business operations. 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.......... 1,200,000 shares
Common Stock offered by the Selling
Stockholders............................... 600,000 shares
Total................................... 1,800,000 shares
Common Stock to be outstanding after the
Offering(1)................................ 34,492,194 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 $0.57
Pro forma weighted average shares used in
calculating per share amounts (in
thousands)............................. 34,973 34,645
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 13 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 $ 27,616
Total assets............................ 208,145 208,218
Long-term debt.......................... 44,000 22,000
Total shareholders' equity.............. 69,085 91,158
</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 1,200,000 shares of Common
Stock offered hereby by the Company at an assumed public offering price of
$19.63 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 1,200,000 shares of Common Stock offered hereby by the Company
at an assumed public offering price of $19.63 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. DeVRY Institutes' students receives
some government-sponsored financial aid and that a similar percentage of the
students attending the Canadian DeVRY Institutes receives some
government-sponsored financial assistance. 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

6
<PAGE> 8

operations for the Company's Canadian operations were materially adversely
affected. See "Business -- Financial Aid and Financing Student Education" and
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. 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 weighted average 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 $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. 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 $19.63 per share (after deduction of estimated underwriting
discounts and commissions and Offering expenses) are expected to be
approximately $22.1 million. The Company will not receive any proceeds from the
sale of shares of Common Stock by the Selling Stockholders. The Company intends
to use substantially all of 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 $64.5 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 March 4, 1997)..................... 28.00 19.00
</TABLE>

The last reported sales price of the Common Stock on March 4, 1997 as
reported on the NYSE was $19.63.

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 $22.1 million (based upon an
assumed public offering price of $19.63 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 $ 22,000
-------- --------
Shareholders' equity:
Common Stock (75,000,000 shares authorized, 33,265,244
shares issued and outstanding (actual) and 34,465,244
shares issued and outstanding (as adjusted))(2)........ 333 345
Additional paid-in capital................................ 36,744 58,805
Retained earnings......................................... 31,561 31,561
Cumulative translation adjustment......................... 447 447
-------- --------
Total shareholders' equity............................. 69,085 91,158
-------- --------
Total capitalization.............................. $113,085 $113,158
======== ========
</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 17,029 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 13 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% 21.8%
===== ===== ===== ===== =====
</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 21.8% 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
Institutes' 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

16
<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.

17
<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,
1997, 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 Becker for $18.5 million in cash and acquired copyrights, other intellectual
property and publicity rights of Becker for $17.9 million in cash. 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.

18
<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, telecommunications
management, technical management, accounting and business operations, 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

19
<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.

20
<PAGE> 22

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 business 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.

21
<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
seven technology-based areas--electronics, electronics engineering technology,
computer information systems, telecommunications management, technical
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.

22
<PAGE> 24

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, 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

23
<PAGE> 25

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
of the DeVRY Institutes 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.

24
<PAGE> 26

In support of its recruiting force, the DeVRY Institutes advertises on
television and radio, in magazines and newspapers, and utilizes 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 new students who take the CPA or CMA
review courses. 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
applicants, 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, first-, second- and third-term student at KGSM are contacted and
advised 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.

25
<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 the 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 the DeVRY
Institutes' graduates. This alliance enhances the DeVRY Institutes' ongoing
career services activity and complements the Company's commitment to providing
quality career-oriented programs in business and technology.

The 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 the DeVRY
Institutes.

26
<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 provides curriculum-related organizations, such
as computer and ham radio clubs and a variety of intramural sports.

Housing. While the DeVRY Institutes does not own any student housing, the
DeVRY Institutes provides referral housing and rents directly or guarantees
rents on apartments, including fully furnished units, for students who want to
attend one of the DeVRY Institutes 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")

27
<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 employs 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 of the DeVRY Institutes 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 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. 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 receives some government-sponsored financial aid and that a similar
percentage of the students attending the Canadian DeVRY Institutes receives 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 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 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 weighted average 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 KGSM and the DeVRY Institutes, 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 legal proceeding which the
Company believes to be material, 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% -- 4,860,382(2) 14.1%
Ronald L. Taylor............... 1,894,288(3) 5.7 523,000 1,371,288(3) 4.0
Ewen M. Akin................... 20 * -- 20 *
Charles A. 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 *
Robert C. McCormack............ 418,272(6) 1.3 -- 418,272(6) *
Julie A. McGee................. 8,000(7) * -- 8,000(7) *
Thurston E. Manning............ 14,000(4) * -- 14,000(4) *
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) 7.8
Ronald Baron................... 2,135,600(14) 6.4 -- 2,135,600(14) 6.2
All Directors and Executive
Officers as a group (24
Persons)..................... 7,991,282 24.0% 600,000 7,391,282 21.4%
</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
270,000 additional shares of Common Stock. If such option is exercised in
full, Mr. Taylor will own 1,101,288 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.

(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

41
<PAGE> 43

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) Ronald Baron whose address is 450 Park Avenue, New York, New York 10022, as
of December 18, 1996, had shared voting and investment power as to
1,789,600 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 March 3, 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 Incentive Plan, the 1991 Stock Incentive Plan
and the 1994 Stock Incentive 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 34,492,194 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 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.................................................. 1,800,000
==========
</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 Underwriters.

One of the Selling Stockholders has granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
270,000 additional shares of Common Stock 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.

The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids for and purchases of the Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Common Stock in the open market in order
to cover syndicate short positions. Penalty bids permit the Underwriters to
reclaim a selling concession from a syndicate member when the Common Stock
originally sold by such syndicate member are purchased in a stabilizing
transaction or syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Common Stock to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on The New York Stock Exchange or otherwise and, 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 one of the Selling Stockholders
by Hopkins and Sutter, a partnership including professional corporations,
Chicago, Illinois, for the remainder of 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 (Note
11).

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 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.

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.

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>

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

1,800,000 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................................ 60,000
Attorneys' Fees and Expenses................................ 85,000
NASD Filing Fee............................................. 6,193
Printing and Engraving Expenses............................. 120,000
Listing Fees................................................ 5,000
Miscellaneous............................................... 6,557
--------
Total.................................................. $300,000
========
</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) The Underwriting Agreement filed as Exhibit 1.1 to this Registration
Statement provides that the Company, the Selling Stockholders and Underwriters
will indemnify each other for certain liabilities, including liabilities under
the Securities Act of 1933, as amended.

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

II-1
<PAGE> 67

497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(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 amended 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 5th day of March, 1997.

DeVRY INC.

By: /s/ DENNIS J. KELLER
------------------------------------------
Dennis J. Keller
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this amended Registration Statement has been signed by the following persons in
the capacities indicated on the 5th day of March, 1997.

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

* Director, President and Chief Operating
- --------------------------------------------------- Officer
Ronald L. Taylor

* Vice President, Controller and Chief Financial
- --------------------------------------------------- Officer (principal financial officer and
Norman M. Levine principal accounting officer)

* Director
- ---------------------------------------------------
Ewen M. Akin

* Director
- ---------------------------------------------------
Charles A. Bowsher

* Director
- ---------------------------------------------------
David S. Brown

* Director
- ---------------------------------------------------
Ann Ida Gannon, BVM

* Director
- ---------------------------------------------------
Robert E. King

* Director
- ---------------------------------------------------
Frederick A. Krehbiel

* Director
- ---------------------------------------------------
Robert C. McCormack

* Director
- ---------------------------------------------------
Julie A. McGee
</TABLE>

II-3
<PAGE> 69

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
- ---------------------------------------------------
Thurston E. Manning

* Director
- ---------------------------------------------------
Hugo J. Melvoin

*By /s/ DENNIS J. KELLER
----------------------------------------------
Dennis J. Keller
attorney-in-fact
</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 the
original registration statement)
</TABLE>

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

* Previously filed.

<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

March 5, 1997