<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q/A

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended November 30, 2000
                        Commission file number 000-29820

                          ARGOSY EDUCATION GROUP, INC.
             (Exact name of registrant as specified in its charter)

                      Illinois                         36-2855674
          (State or other jurisdiction of           (I.R.S. Employer
          incorporation or organization)          Identification No.)

                          Two First National Plaza
                      20 South Clark Street, Suite 2800
                            Chicago, Illinois 60603
                          Telephone: (312) 899-9900
 (Address, including zip code, and telephone number, including area code, of
                         principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              YES       X              NO

     At January 11, 2001 the registrant had 6,481,062 shares of common stock
outstanding.

<PAGE>

                         ARGOSY EDUCATION GROUP, INC.

                                     INDEX

<TABLE>
<CAPTION>
Description                                                                                                            Page No.
<S>                                                                                                                    <C>
Part I.   Financial Information

Item 1.   Financial Statements

         Condensed Consolidated Balance Sheets................................................................            3
         Condensed Consolidated Statements of Operations......................................................            4
         Condensed Consolidated Statements of Cash Flows......................................................            5
         Notes to Condensed Consolidated Financial Statements.................................................            6

Item 2.   Management's Discussion and Analysis of Results of Operations
                  and Financial Condition.....................................................................            9

Item 3.   Quantitative and Qualitative Disclosure About Market Risk...........................................           14

Part II.    Other Information

Item 1.   Legal Proceedings...................................................................................           14

Item 2.   Changes in Securities and Use of Proceeds............................................................          14

Item 3.   Defaults Upon Senior Securities......................................................................          14

Item 4.   Submission of Matters to a Vote of Security-Holders..................................................          14

Item 5.   Other Information....................................................................................          14

Item 6.   Exhibits and Reports on Form 8-K......................................................................         14
</TABLE>

                                      -2-
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Amounts in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                              November 30, 2000   August 31, 2000
                                                                                              -----------------   ---------------
                                                                                                As Restated         As Restated
           ASSETS                                                                               See Note 2.         See Note 2.
                                                                                              -----------------   ---------------
<S>                                                                                           <C>                 <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                                  $    5,809           $    8,112
     Short-term investments                                                                          4,544                7,787
     Receivables, net                                                                                3,216                2,685
     Prepaid expenses and other current assets                                                       1,373                  959
                                                                                              ------------          -----------
           Total current assets                                                                     14,942               19,543
PROPERTY AND EQUIPMENT, net                                                                          6,687                6,307
NON-CURRENT INVESTMENTS                                                                                  0                  200
OTHER ASSETS                                                                                         2,049                1,879
WESTERN STATES INVESTMENT                                                                            6,857                    0
ADVANCES TO JOHN MARSHALL                                                                              827                  724
INTANGIBLES, net                                                                                     6,571                6,687
                                                                                              ------------          -----------
           TOTAL ASSETS                                                                        $    37,933           $   35,300
                                                                                              ============          ===========

           LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Current maturities of long-term debt                                                      $       890           $      796
     Accounts payable                                                                                1,902                1,162
     Accrued payroll and other related liabilities                                                     887                  634
     Accrued expenses                                                                                1,051                  584
     Deferred revenue and student deposits                                                           3,224                2,760
                                                                                              ------------          -----------
           Total current liabilities                                                                 7,954                5,936
                                                                                              ------------          -----------

LONG-TERM DEBT, less current maturities                                                              2,516                2,604

DEFERRED RENT                                                                                          758                  710

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Class A common stock - 30,000,000 shares authorized, $.01 par value,
       2,060,594 and 2,059,417 shares issued and outstanding at November 30,
       2000 and August 31, 2000
       respectively                                                                                     21                   21
     Class B common stock - 10,000,000 shares authorized,
       $.01 par value, 4,900,000 shares issued and outstanding
        at November 30, 2000 and August 31, 2000 respectively                                           49                   49
     Additional paid-in capital                                                                     25,131               25,131
     Treasury Stock-at cost: 482,000 shares at cost                                                 (2,131)              (2,131)
     Stock Warrants                                                                                    860                    0
     Accumulated other comprehensive income                                                            370                1,102
     Purchase price in excess of predecessor carryover                                                (720)                (720)
     Retained earnings                                                                               3,125                2,598
                                                                                              ------------          -----------
           Total stockholders' equity                                                               26,705               26,050
                                                                                              ------------          -----------
           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $    37,933           $   35,300
                                                                                              ============          ===========
</TABLE>

                                      -3-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Three Months Ended
                                                                                    November 30,
                                                                                    ------------
                                                                                2000           1999
                                                                                ----           ----
                                                                            As Restated     As Restated
                                                                            See Note 2.     See Note 2.
                                                                           -----------------------------
<S>                                                                        <C>              <C>
Revenues:
       Tuition and fees, net                                                  $ 13,224        $ 10,926
       Other                                                                        80             688
                                                                            ----------     -----------
            Total revenues, net                                                 13,304          11,614
                                                                            ----------     -----------
Operating expenses:
       Cost of education                                                         5,822           5,062
       Selling expenses                                                          1,477           1,038
       General and administrative expenses                                       4,690           3,927
                                                                            ----------     -----------
            Total operating expenses                                            11,989          10,027
                                                                            ----------     -----------

       Income from operations                                                    1,315           1,587

Other income (expense):
       Losses attributable to John Marshall                                       (295)           (179)
       Interest income                                                             225             215
       Interest expense                                                            (75)            (70)
       Other income                                                                  4              19
                                                                            ----------     -----------
            Total other income (expense), net                                     (141)            (15)
                                                                            ----------     -----------

Income before provision for income taxes                                         1,174           1,572

Provision for income taxes                                                         634             636
                                                                            ----------     -----------

Net income                                                                    $    540        $    936
                                                                            ==========     ===========
Net income per share:
       Basic and diluted                                                      $   0.08        $   0.14
                                                                            ==========     ===========
Weighted average shares outstanding:

       Basic                                                                     6,478           6,693
                                                                            ==========     ===========
       Diluted                                                                   6,484           6,693
                                                                            ==========     ===========
</TABLE>

                                      -4-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Amounts in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                            Three Months Ended
                                                                                               November 30,
                                                                                         2000                1999
                                                                                         ----                ----
                                                                                      As Restated         As Restated
                                                                                      See Note 2.         See Note 2.
                                                                                     ------------        -------------
<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income                                                                    $     540           $     936
       Adjustments to reconcile net income to net cash
         provided by operating activities -
            Depreciation and amortization                                                  407                 350
            Deferred taxes                                                                (238)               (199)
            Issuance of stock performance grants and warrants                              430                 213
            Loss attributable to John Marshall                                             295                 179
            Changes in operating assets and liabilities                                  1,488                 758
                                                                                    ----------          ----------
                Net cash provided by operating activities                                2,922               2,237
                                                                                    ----------          ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of property and equipment, net                                            (687)               (604)
       Advances to John Marshall Law School                                               (398)               (407)
       Business acquisition, net of cash                                                (6,857)               (104)
       (Purchase) sale of investments, net                                               2,773              (2,236)
                                                                                    ----------          ----------
                Net cash used in investing activities                                   (5,169)             (3,351)
                                                                                    ----------          ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Purchase of treasury stock                                                            0              (2,131)
       Borrowing of long-term debt                                                         115                   -
       Payments of long-term debt                                                         (110)               (119)
                                                                                    ----------          ----------
                Net cash (used in) provided by financing activities                          5              (2,250)
                                                                                    ----------          ----------

EFFECTIVE EXCHANGE RATE CHANGES ON CASH                                                    (61)                (12)
                                                                                    ----------          ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS
                                                                                        (2,303)             (3,376)

CASH AND CASH EQUIVALENTS, beginning of period                                           8,112               8,980
                                                                                    ----------          ----------

CASH AND CASH EQUIVALENTS, end of period                                             $   5,809           $   5,604
                                                                                    ==========          ==========
</TABLE>

                                      -5-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Note 1 - The Company and Basis of Presentation

         Argosy Education Group, Inc. (the "Company") is the nation's largest
for-profit provider of doctoral level programs. The Company's mission is to
provide academically oriented practitioner-focused education in fields with
numerous employment opportunities and strong student demand. The Company
operates degree and non-degree granting private, for-profit post-secondary
schools devoted to awarding doctoral and master's degrees in psychology,
education and business as well as bachelor's degrees in business, associate
degrees in allied health professions and diplomas in information technology.

         The accompanying condensed unaudited consolidated financial statements
have been prepared on the same basis as the annual consolidated financial
statements and, in the opinion of management, reflect all adjustments which
include only normal recurring adjustments, necessary to present fairly the
financial condition and results of operations of the Company. These consolidated
financial statements and notes thereto are unaudited and should be read in
conjunction with the Company's audited financial statements included in the
Company's report on Form 10K, as filed with the Securities and Exchange
Commission. The results of operations for the three months ended November 30,
2000 are not necessarily indicative of results that can be expected for the
entire fiscal year.

         The condensed consolidated financial statements as of November 30, 2000
and the three months ended November 30, 2000 and November 30, 1999 include the
accounts of the Company and its wholly owned subsidiaries. All intercompany
balances and transactions have been eliminated in consolidation.

Note 2. Restatements

     Subsequent to the issuance of the Company's consolidated financial
statements for the quarterly period ended November 30, 2000, it was determined
that the previously reported operating results for the quarterly periods ended
November 30, 2000 and 1999, were overstated. The accompanying financial
statements have been revised primarily to reflect adjustments to reduce the
carrying value of the Company's advances to John Marshall Law School. It was
determined that the more appropriate accounting for the advances to John
Marshall is to treat this as an equity method investment. The accounting for the
advances to John Marshall has been revised to reduce the amount of the advances
to John Marshall to reflect John Marshall's operating losses during the three
months ended November 30, 2000 and 1999. The 2000 financial statements were
restated to give effect to the revised accounting for the John Marshall advances
from the point in time that the management agreement was in place (September 1,
1999). Additionally, the financial statements for the quarter ended November 30,
2000, were restated to eliminate a tax benefit of $0.2 million associated with
the charge recorded for the Leeds Warrant (see Note 6).

                                      -6-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

 A summary of the effects of the restatements follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                   For the three                    For the three
                                                                   months ended                     months ended
                                                                 November 30, 2000                November 30, 1999

                                                         -------------------------------------------------------------------
                                                         As Previously     As Restated      As Previously      As Restated
                                                            Reported                           Reported
                                                         -------------    -------------    ---------------    --------------
<S>                                                      <C>              <C>              <C>                <C>
Net Revenue                                                    $13,270          $13,304            $11,614           $11,614
                                                         -------------    -------------    ---------------    --------------

Operating expenses:
    Cost of education                                            5,822            5,822              5,062             5,062
    Selling expenses                                             1,477            1,477              1,038             1,038
    General and administrative expenses                          4,669            4,690              3,825             3,927
                                                         -------------    -------------    ---------------    --------------
       Total operating expenses                                 11,968           11,989              9,925            10,027
                                                         -------------    -------------    ---------------    --------------
       Income from operations                                    1,302            1,315              1,689             1,587
                                                         -------------    -------------    ---------------    --------------
Other income (expense):
    Losses attributable to John Marshall
                                                                    --             (295)                --              (179)
    Interest income                                                225              225                215               215
    Interest expense                                               (75)             (75)               (70)              (70)
    Other income (expense)                                           4                4                 19                19
                                                         -------------    -------------    ---------------    --------------
       Total other income (expense), net
                                                                   154             (141)               164               (15)
                                                         -------------    -------------    ---------------    --------------
       Income before provision for
           income taxes
                                                                 1,456            1,174              1,853             1,572
Provision for income taxes                                         575              634                748               636
                                                         -------------    -------------    ---------------    --------------
Net income                                                     $   881          $   540            $ 1,105           $   936
                                                         =============    =============    ===============    ==============
Earnings per share
Basic                                                          $  0.14          $  0.08            $  0.17           $  0.14
                                                         =============    =============    ===============    ==============
Weighted average shares outstanding - basic                      6,478            6,478              6,693             6,693
                                                         =============    =============    ===============    ==============
Diluted                                                        $  0.14          $  0.08            $  0.17           $  0.14
                                                         =============    =============    ===============    ==============
Weighted average shares outstanding - diluted                    6,484            6,484              6,693             6,693
                                                         =============    =============    ===============    ==============
</TABLE>

                                      -7-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                          November 30, 2000
                                                                 ----------------------------------
                                                                 As Previously
                       ASSETS                                      Reported             As Restated
------------------------------------------------------           -------------          -----------
<S>                                                              <C>                    <C>
Current Assets:
    Cash and cash equivalents                                         $  5,812             $  5,809
    Short-term investments                                               4,544                4,544
    Receivables, net                                                     3,211                3,216
    Prepaid expenses                                                     1,351                1,373
                                                                 -------------           ----------
                     Total current assets                               14,918               14,942
                                                                 -------------           ----------
Property and equipment, net                                              6,687                6,687
                                                                 -------------           ----------
Other Assets:
    Other assets                                                         1,005                2,049
    Western States Investment                                            6,857                6,857
    Advances to John Marshall                                            3,495                  827
    Intangibles, net                                                     6,571                6,571
                                                                 -------------           ----------
Total Assets                                                          $ 39,533             $ 37,933
                                                                 =============           ==========

        LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------------------
Current Liabilities:
    Current maturities on long-term debt                              $    890             $    890
    Accounts payable                                                     1,902                1,902
    Accrued payroll and related expenses                                   887                  887
    Accrued expenses                                                       851                1,051
    Deferred revenue                                                     3,224                3,224
                                                                 -------------           ----------
                     Total current liabilities                           7,754                7,954
                                                                 -------------           ----------
Long-term debt, less current maturities                                  2,516                2,516
                                                                 -------------           ----------
Deferred rent                                                              758                  758
                                                                 -------------           ----------
Commitments and contingencies
Shareholders' equity:
    Class A common stock                                                    21                   21
    Class B common stock                                                    49                   49
    Additional paid-in capital                                          25,131               25,131
    Treasury stock                                                      (2,131)              (2,131)
    Accumulated other comprehensive income                                 370                  370
    Purchase price in excess of predecessor carryover basis               (720)                (720)
    Stock Warrants                                                         860                  860
    Retained earnings                                                    4,925                3,125
                                                                 -------------           ----------
                     Total shareholders' equity                         28,505               26,705
                                                                 -------------           ----------
Total liabilities and shareholders' equity                            $ 39,533             $ 37,933
                                                                 =============           ==========
</TABLE>

                                      -8-
<PAGE>

Note 3- Acquisition

     The Company announced on November 16, 2000, that it has entered into an
agreement to purchase Western State University College of Law, in Fullerton,
California ("Western States") for approximately $13 million less certain
deductions as provided for in the agreement. The proposed transaction is subject
to approval by accrediting and regulatory entities, including the Western
Association of Schools and Colleges, the American Bar Association and the U.S.
Department of Education. In entering into the agreement, the Company placed
$6,857,000 into escrow. The escrow will be distributed at closing. The
acquisition is anticipated in first quarter of 2001.

Note 4 - Recent Accounting Pronouncement

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin 101 ("SAB 101"). SAB 101 requires deferral of certain
revenue items over the period that the related service is provided. Adoption of
SAB 101 is required by the Company's fourth quarter of fiscal 2001. The SEC has
recently issued interpretive guidance on the implementation of this bulletin,
and the Company is completing an evaluation of its effects. SAB 101 requires the
deferral of certain fees and other charges over the period of service (student
enrollment); however, based on preliminary analysis, the Company does not expect
SAB 101 to have a significant effect on its consolidated results of operations,
financial position and cash flow.

Note 5 - Shareholders' Equity

     In the first quarter of 1999, the Company adopted a repurchase program for
the Company's Class A Common Stock of up to 500,000 shares. Shares of Class A
Common Stock will be purchased by the Company from time to time through open
market purchases and private purchase, as available. Under this program, the
Company has repurchased 482,000 shares as of November 30, 2000 and August 31,
2000 at a total cost of approximately $2,131,000.

Note 6 - Related-Party Transactions

     As of September 1, 1999 the Company entered into an agreement to manage the
John Marshall Law School of Atlanta, Georgia ("John Marshall"). The agreement is
for 10 years and includes an option to purchase John Marshall. The right can be
exercised at the Company's discretion. In addition, a line of credit of $600,000
was established between the Company and John Marshall. As of November 30, 2000,
the Company advanced approximately $500,000 under the line of credit and
approximately $2.5 million to fund operations under the management agreement and
has committed to advance an additional $1.0 million in fiscal 2001 if needed.
For the quarters ended November 30, 2000 and 1999, the losses for John Marshall,
excluding intercompany transactions, of $0.3 million and $0.2 million,
respectively, have been included as other expenses in the Company's statements
of operations and have been reflected as a reduction of the advances made to
John Marshall.

     On September 1, 2000, the Company entered into a Consulting Agreement with
Leeds Equity Associates, L.P. This partnership includes as a partner Jeffrey
Leeds, a member of the Company's board of directors. This Agreement encompasses
the performance of Company requested services over the six month term of the
Agreement. Payment is represented by a stock purchase warrant providing for the
purchase of 200,000 shares of the Company's Class A common stock at a purchase
price of $6.48 per share and with a seven year exercise period. The warrants are
immediately exercisable and based upon the Black Scholes pricing model valued at
$860,000. The warrant value is being expensed over the service period resulting
in half of the charge recorded in this fiscal quarter and the remaining charge
occuring in the second quarter of 2001.

                                      -9-
<PAGE>

Note 7 - Comprehensive Income

     On September 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), which
requires companies to report all changes in equity during a period, except those
resulting from investment by owners and distributions to owners, in a financial
statement for the period in which they are recognized. The disclosure of
comprehensive income and accumulated other comprehensive income is as follows:

                                                        Three Months Ended
                                                        ------------------

                                                      November       November
                                                      --------       --------
                                                      30, 2000       30, 1999
                                                      --------       --------
Net income                                             $   540        $   936

Other comprehensive income:
   Unrealized gain/(loss) on investments                  (400)           117
   Foreign currency translation adjustment                 (46)            --
                                                      -----------------------

Total other comprehensive income                          (446)           117
                                                      -----------------------

Comprehensive income                                   $    94        $ 1,053
                                                      =======================

     For the period ended November 30, 2000 and November 30, 1999 Accumulated
Other Comprehensive Income, net of tax, was approximately $222,000 and $385,000,
respectively, and would have resulted in a reduction of Comprehensive Income.

Note 8 - Segment Reporting

     The Company has two business segments: 1) Schools ("Schools") and 2) Test
Preparation Materials and Workshops ("Test Preparation"). These segments are
managed as separate strategic business units due to the distinct nature of their
operations. The Schools Segment, which represents the operations of ASPP, U of
S, MIA and PrimeTech, provides programs in psychology, education, business,
allied health professions, network engineering and software programming. All
operations of the Schools Segment are located in the United States with the
exception of PrimeTech, which is located in Canada. The Test Preparation Segment
offers courses and materials for post-graduate psychology and counseling license
examinations and is located in the United States.

     The following table presents financial data for the three months ended
November 30, 2000 and November 30, 1999 for these segments (dollars in
thousands):

                               Schools      Test Preparation      Consolidated
                               -------      ----------------      ------------
  Three Months Ended
  November 30, 2000
  -----------------
Revenue                        $12,453            $  851             $13,304
Income from operations           1,126               189               1,315
Net Income                         433               107                 540
Total Assets                    32,823             5,110              37,933

  Three Months Ended
  November 30, 1999
  -----------------
Revenue                        $10,749            $  865             $11,614
Income from operations           1,348               239               1,587
Net Income                         801               135                 936
Total Assets                    30,521             3,938              34,459

                                      -10-
<PAGE>

Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition

     This Quarterly Report on Form 10-Q contains statements that may constitute
"forward-looking statements" as defined by the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can be identified
by the use of forward-looking terminology such as "believes," "estimates,"
"anticipates," "continues," "contemplates," "expects," "may," "will," "could,"
"should" or "would," or the negatives thereof. Those statements are based on the
intent, belief or expectation of the Company as of the date of this Quarterly
Report. Any such forward-looking statements are not guarantees of future
performance and may involve risks and uncertainties that are outside the control
of the Company. Results may differ materially from the forward-looking
statements contained herein as a result of changes in governmental regulations,
including those governing student financial aid, and other factors. The Company
expressly disclaims any obligation to release publicly any updates or revisions
to any forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based. The following discussion
of the Company's results of operations and financial condition should be read in
conjunction with the interim unaudited condensed financial statements of the
Company and the notes thereto included herein and in conjunction with the
information contained in the Form 10K as filed with the Securities and Exchange
Commission.

     As more fully described in Note 2. to the Consolidated Financial Statements
(and in the Companies annual report on Form 10K/A for the year ended August 31,
2000) certain financial information in the filing has been restated to correct
previously issued financial statements. The discussion in this item reflects
those restatements.

Results of Operations

The following table summarizes the Company's operating results as a percentage
of net revenue for the period indicated:

                                                         Three Months Ended
                                                            November 30,
                                                            ------------
                                                      2000               1999
                                                      ----               ----
Total revenues, net                                      100%               100%

Operating expenses:
Cost of education                                       43.8               43.6
Selling expenses                                        11.1                8.9
General and administrative expenses                     35.2               33.8
                                                        ----               ----
Total operating expenses                                90.1               86.3
                                                        ----               ----
Income from operations                                   9.9               13.7

Total other income (expense), net                       (1.1)               0.1
                                                        ----               ----
Income before provision for income taxes                 8.8               13.6

Provision for income taxes                               4.7                5.5
                                                        ----               ----
Net income                                               4.1%               8.1%
                                                        ====               ====

                                      -11-
<PAGE>

Three Months Ended November 30, 2000 Compared to Three Months Ended November 30,
1999

     Net revenues increased 14.6% from $11.6 million in the first quarter of
fiscal 2000 to $13.3 million in the first quarter of fiscal 2001, due to
increased revenue at all schools. The revenue increase is primarily due to
internal growth and tuition increases.

     Cost of education increased 15.0% from $5.1 million in the first quarter of
fiscal 2000 to $5.8 million in the first quarter of fiscal 2001, due to
additional teaching costs to meet the growth in the number of students attending
the schools. As a percentage of net revenue, cost of education increased
slightly from 43.6% in fiscal 2000 to 43.8% in fiscal 2001.

     Selling expenses increased 42.3% from $1.0 million in the first quarter of
fiscal 2000 to $1.5 million in the first quarter of fiscal 2001. As a percentage
of revenue, selling expenses increased from 8.9% to 11.1% primarily due to the
addition of recruiters and more aggressive advertising at all of the Argosy
schools. This is an integral part of our marketing strategy.

     General and administrative expenses increased 19.4% from $3.9 million in
the first quarter of fiscal 2000 to $4.7 million in the first quarter of fiscal
2001 and, as a percentage of net revenue increased from 33.8% to 35.3% from
quarter to quarter. The dollar increase is primarily due to the expensing of
warrants issued for general and academic services. On September 1, 2000, the
Company entered into a Consulting Agreement with Leeds Equity Associates, LP.
This partnership includes, as a partner Jeffrey Leeds, a member of the Company's
board of directors. This agreement encompasses the performance of Company
requested services over the six month term of the agreement. Payment is
represented by a stock purchase warrant providing for the purchase of 200,000
shares of the Company's Class A common stock at a purchase price of $6.48 per
share and with a seven year exercise period. The value of the warrants was
established at $0.8 million and half of the charge was recorded in the first
fiscal quarter of 2001. An additional charge of $0.4 million will occur in the
second quarter. Additional expenses were incurred for additional management
payroll costs.

     Other expense net, increased from a negligible amount in fiscal 2000 to
expense of $0.1 million in fiscal 2001. This increase in fiscal 2001 was
primarily attributable to equity losses resulting from the Company's investment
in John Marshall Law School, offset by interest income.

     The provision for income taxes remained consistent at $0.6 million in the
first quarter of fiscal 2000 and in the first quarter of fiscal 2001.

     Net income decreased 42.3%, from $0.9 million in the first quarter of
fiscal 2000 to $0.5 million in the first quarter of fiscal 2001 due to the
reasons discussed above. The higher effective income tax rate in the first
quarter of fiscal 2001 is attributable to the lack of a tax benefit associated
with stock warrants issued in 2001.

Seasonality and Other Factors Affecting Quarterly Results

     The Company has experienced seasonality in its results of operations
primarily due to the pattern of student enrollments at most of the Company's
schools. Historically, the Company's lowest quarterly net revenue and income
have been in the fourth fiscal quarter (June through August) due to lower
student enrollment during the summer months at most of the Company's schools,
while the Company's expenses remain relatively constant over the course of a
year. The Company expects that this seasonal trend will continue and that
operating results for any quarter are not necessarily indicative of the results
for any future period.

Liquidity and Capital Resources

     Since its formation, the Company has financed its operating activities
primarily through cash generated from operations. Completed acquisitions have
been financed primarily through debt instruments. Net cash

                                      -12-
<PAGE>

provided by operating activities increased from $2.2 million in the three months
ended November 30, 1999 to $2.9 million in the three months ended November 30,
2000. The Company had $7.0 million of working capital as of November 30, 2000
compared to $13.6 million of working capital as of August 31, 2000. The primary
decrease is attributable to the $6.9 million escrow payment made pursuant to the
Western States acquisition agreement. Advances made to John Marshall during the
three months ended November 30, 2000 were approximately $0.4 million.

     Capital expenditures increased from $0.6 million in the three months ended
November 30, 1999 to $0.7 million in the same period in 2000. Capital
expenditures are expected to increase as the student population increases and
the Company continues to upgrade and expand current facilities and equipment.
The Company has no other commitments for material capital expenditures.

     The Company entered into a long-term management arrangement with John
Marshall Law School of Atlanta, Georgia in September 1999. The arrangement
includes a management agreement, a 10-year option to purchase John Marshall
exercisable at the Company's discretion and a line of credit of $600,000 between
the Company and John Marshall. As of November 30, 2000, the Company had advanced
approximately $500,000 under the line of credit and approximately $2.5 million
in operating cash under the management agreementThese advances net of John
Marshall operating losses, are included in other long term assets. During the
three months ended November 30, 2000, the Company advanced $500,000 and has
committed to advance an additional $1.0 million for John Marshall in fiscal
2001, if needed.

     In 1987, the Georgia Supreme Court mandated that John Marshall obtain
American Bar Association ("ABA") accreditation before 2003. The ABA has to date
refused such accreditation. On September 5, 2000, John Marshall filed an appeal
regarding its accreditation, which is scheduled to be heard in February 2001. If
the appeal is successful, the Company has been advised that the ABA will send a
two-person team to inspect the school and verify that shortcomings noted in
previous inspections have been addresses. If the appeal proves unsuccessful,
John Marshall can begin the accreditation process again with a new application
filing in the fall of 2001. Though the Company believes that accreditation can
be achieved before the 2003 deadline, there exists a myriad of circumstances
that cannot be foreseen and over which the Company has no control that could
interfere with the granting of accreditation status to John Marshall; thus,
there can be no assurance that accreditation will be received which could impact
the Company's ability to recover its $3.0 million advance to John Marshall.

     The Company has entered into an agreement to purchase Western State
University College of Law, in Fullerton, California ("Western States") for
approximately $13 million less certain deductions as provided for in the
agreement. The proposed transaction is subject to approval by accrediting and
regulatory entities, including the Western Association of Schools and Colleges,
the American Bar Association and the U.S Department of Education. Pursuant to
the terms of the transaction, the Company paid $6.8 million escrow in November
2000 and will make the remaining purchase price payment upon closing. The
acquisition is anticipated in the first quarter of 2001


Item 3. Quantitative and Qualitative Disclosure About Market Risk

     The Company is exposed to the impact of interest rate changes, foreign
currency fluctuations and changes in the market value of its investments. The
Company does not utilize interest rate swaps, forward or option contracts on
foreign currencies or commodities, or other types of derivative financial
instruments. The Company has debt with fixed annual rates of interest ranging
from 6.25% to 10.50% totaling $3.2 million at November 30, 2000. In addition, at
November 30, 2000, the Company has debt in the amount of $0.4 million with
interest at the higher of the Federal Funds Rate plus 0.5% or the lender's rate
of interest. The Company estimates that the fair value of each of its debt
instruments approximated its market value on November 30, 2000.

     The Company is subject to fluctuations in the value of the Canadian dollar
vis-a-vis the U.S. dollar. The fair value of the financial statements of these
operations approximated current market rates at November 30, 2000.

                                      -13-
<PAGE>

     From time to time, the Company invests excess cash in marketable
securities. These investments principally consist of U.S. Treasury notes,
corporate bonds, short-term commercial paper and money market accounts, the fair
value of which approximated current market rates at November 30, 2000.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities and Use of Proceeds

         None.

Item 3.  Defaults Upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security-Holders

         None.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits

   10.34 Purchase and Sale Agreement, dated November 14, 2000 between Western
         State University And the Company (previously filed)

   (b)   Reports on Form 8-K:

         None

                                      -14-
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ARGOSY EDUCATION GROUP, INC.

March 26, 2001                    /s/  Charles T. Gradowski
                                  --------------------------
                                  Charles T. Gradowski
                                  Chief Financial Officer

                                      -15-