<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                   FORM 10-Q

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

                  For the quarterly period ended May 31, 1999
                       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, 3rd Floor
                            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 July 15, 1999 the registrant had 6,900,000 shares of common stock
 outstanding.
<PAGE>

                         ARGOSY EDUCATION GROUP, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                                   Page No.
<S>                                                                                <C>
Description
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..............................................    8

Item 3.   Quantitative and Qualitative Disclosure About Market Risk................   12

Part II.  Other Information

Item 2.   Changes in Securities and Use of Proceeds................................   12

Item 4.   Submission of Matters to a Vote of Security-Holders......................   12

Item 6.   Exhibits and Reports on Form 8-K.........................................   13
</TABLE>

                                      -2-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                               May 31, 1999      August 31, 1998
<S>                                                                            <C>               <C>
     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                     $   10,888          $    2,712
  Short-term investments                                                             8,987               1,131
  Receivables, net                                                                   1,136                 673
  Shareholder note receivable                                                        1,255               6,000
  Prepaid expenses and other current assets                                            628                 850
                                                                                ----------          ----------
       Total current assets                                                         22,894              11,366
PROPERTY AND EQUIPMENT, net                                                          5,031               3,870
OTHER ASSETS                                                                         2,006               1,548
INTANGIBLES, net                                                                     6,950               6,691
                                                                                ----------          ----------
       TOTAL ASSETS                                                             $   36,881          $   23,475
                                                                                ==========          ==========

       LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt                                          $      289          $    3,362
  Accounts payable                                                                     383               1,157
  Accrued payroll and other related liabilities                                        940                 833
  Accrued expenses                                                                   1,710                 751
  Deferred revenue and student deposits                                              3,924               2,084
  Shareholder distribution                                                               -                 720
                                                                                ----------          ----------
       Total current liabilities                                                     7,246               8,907
                                                                                ----------          ----------

LONG-TERM DEBT, less current maturities                                              3,301               5,165
DEFERRED RENT                                                                          568                 481
                                                                                ----------          ----------

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Class A common stock - 30,000,000 shares authorized,
     $.01 par value, 2,000,000 shares issued and outstanding                            20                   -
  Class B common stock - 10,000,000 shares authorized,
     $.01 par value, 4,900,000 shares issued and outstanding                            49                  49
  Additional paid-in capital                                                        24,813               6,456
  Accumulated other comprehensive income                                                14                   2
  Purchase price in excess of predecessor carryover                                   (720)               (720)
  Foreign translation adjustment                                                        (2)                  -
  Retained earnings                                                                  1,592               3,135
                                                                                ----------          ----------
       Total stockholders' equity                                                   25,766               8,922
                                                                                ----------          ----------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $   36,881          $   23,475
                                                                                ==========          ==========
</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               Nine Months Ended
                                                                               May 31,                          May 31,
                                                                               -------                          -------
                                                                         1999           1998              1999           1998
                                                                         ----           ----              ----           ----
<S>                                                                   <C>              <C>             <C>             <C>
Revenues:
   Tuition and fees, net                                              $  9,887         $ 7,902         $ 26,586        $ 22,192
   Other                                                                   808             869            2,529             550
                                                                      --------         -------         --------        --------

        Total revenues, net                                             10,695           8,771           29,115          22,742
                                                                      --------         -------         --------        --------

Operating expenses:
   Cost of education                                                     4,838           4,207           13,593          10,692
   Selling expenses                                                        307             340            1,086             691
   General and administrative expenses                                   2,607           2,374            8,103           6,290
   Related party general and administrative expense                         13             961              668           1,807
                                                                      --------         -------         --------        --------
        Total operating expenses                                         7,765           7,882           23,450          19,480
                                                                      --------         -------         --------        --------

   Income from operations                                                2,930             889            5,665           3,262

Other income (expense):
   Interest income                                                         244              99              557             296
   Interest expense                                                       (181)           (168)            (504)           (435)
                                                                      --------         -------         --------        --------
        Total other income (expense), net                                   63             (69)              53            (139)
                                                                      --------         -------         --------        --------
Income before provision for income taxes                                 2,993             820            5,718           3,123

Income taxes:
   Income tax provision on C corporation income
     subsequent to March 8, 1999                                         1,182               -            1,182               -

   Income tax provision on S corporation income
     prior to March 8, 1999                                                  -              20               62              53

   Deferred income taxes recorded in conjunction with
     termination of S corporation election on March 8, 1999               (764)              -             (764)              -
                                                                      --------         -------         --------        --------

        Total income taxes                                                 418              20              480              53
                                                                      --------         -------         --------        --------
Net income                                                            $  2,575         $   800         $  5,238        $  3,070
                                                                      ========         =======         ========        ========

Net income per share:
   Basic and diluted                                                  $   0.38         $  0.16         $   0.95        $   0.63
                                                                      ========         =======         ========        ========

Pro forma income data (unaudited):

   Net income                                                         $  2,575         $   800         $  5,238        $  3,070

   Pro forma adjustment to recognize C
     corporation provision for income taxes                               (764)              -             (764)              -
                                                                      --------         -------         --------        --------
Pro forma net income                                                  $  1,811         $   800         $  4,474        $  3,070
                                                                      ========         =======         ========        ========

Pro forma net income per share:
   Basic and diluted                                                  $   0.27         $  0.16         $   0.81        $   0.63
                                                                      ========         =======         ========        ========

Weighted average shares outstanding:
   Basic and diluted                                                     6,748           4,900            5,523           4,900
                                                                      ========         =======         ========        ========
</TABLE>

                                      -4-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                                  May 31,
                                                                                         1999                1998
                                                                                         ----                ----
<S>                                                                                    <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                                                          $  5,238            $  3,070
   Adjustments to reconcile net income to net cash
     provided by operating activities -
       Depreciation and amortization                                                        961                 659
       Changes in operating assets and liabilities                                        1,002                 447
                                                                                       --------            --------
          Net cash provided by operating activities                                       7,201               4,176
                                                                                       --------            --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment, net                                                 (992)               (362)
   Business acquisition, net of cash                                                       (185)             (1,683)
   (Purchase) sale of investments, net                                                   (5,120)              2,039
   Shareholder note receivable                                                                -                 505
                                                                                       --------            --------
          Net cash (used in) provided by investing activities                            (6,297)                499
                                                                                       --------            --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of common stock                                                              26,040                   -
   Organization costs                                                                    (1,184)                  -
   Borrowing of long-term debt                                                              150               2,994
   Payments of long-term debt                                                            (5,281)             (1,068)
   Borrowings from related party, net                                                        33                (288)
   Shareholder distribution                                                             (15,469)             (4,293)
   Repayment of shareholder note                                                          3,278                   -
   Payments to former owners of acquired businesses                                        (272)                  -
                                                                                       --------            --------
          Net cash provided by (used in) financing
           activities                                                                     7,295              (2,655)
                                                                                       --------            --------

EFFECTIVE EXCHANGE RATE CHANGES ON CASH                                                     (23)                  -
                                                                                       --------            --------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                                 8,176               2,020

CASH AND CASH EQUIVALENTS, beginning of period                                            2,712               4,209
                                                                                       --------            --------

CASH AND CASH EQUIVALENTS, end of period                                               $ 10,888            $  6,229
                                                                                       ========            ========
</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 registration statement, as filed with the Securities and Exchange
Commission on March 4, 1999. The results of operations for the three and nine
months ended May 31, 1999 are not necessarily indicative of results that could
be expected for the entire fiscal year.

     The condensed consolidated financial statements as of May 31, 1999 and
for the three and nine months then ended include the accounts of the Company and
its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Note 2 - Initial Public Offering

     On March 8, 1999 the Company completed an initial public offering of Common
Stock (the "Offering"). Prior to the Offering, the Company had one class of
common stock outstanding. In connection with the Offering, the Company's
existing common stock underwent an approximate 2,941-for-one stock split which
was then converted into 4,900,000 shares of Class B Common Stock. The Company
authorized 30,000,000 shares of Class A Common Stock, 2,000,000 of those shares
were issued and 1,125,000 of those shares were reserved for issuance under the
Company's 1999 Stock Incentive Plan and Stock Purchase Plan.

     In the Offering, the Company issued and sold 2,000,000 shares of Class A
Common Stock at a price of $14.00 per share. The Company received total net
proceeds, after deduction of underwriting discounts and offering costs, of
approximately $26.0 million. The net proceeds from the Offering were used to
repay $4.7 million of the company's indebtedness, pay a distribution to the
Company's shareholder of $11.9 million and repay $0.9 million of indebtedness
due to the Company's shareholder in connection with the acquisitions of MCM
Plaza and PrimeTech. The remaining $8.5 million of proceeds is available for
working capital and general corporate purposes.

                                      -6-
<PAGE>

Note 3 - Income Taxes

     Prior to the initial public offering of the Company's Class A Common Shares
completed on March 8, 1999 the Company included its income and expenses with
those of its shareholders for Federal and certain state income tax purposes (an
S Corporation election). In connection with the Company's initial public
offering in March, 1999, the Company terminated its S corporation election and
accordingly recorded a deferred income tax asset and corresponding reduction of
income tax expense of $764,222, arising from a change in the Company's tax
status. Beginning March 9, 1999, the Company provides for deferred income taxes
under the asset and liability method of accounting. This method requires the
recognition of deferred income taxes based upon the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between financial statements carrying amounts and
the tax basis of existing assets and liabilities.

Note 4 - Subsequent Events

     Subsequent to consummation of the Offering, the Company overestimated the
amount paid to Dr. Markovitz for the Shareholder Loans (which includes the
Distribution Loan and $0.9 million of indebtedness in connection with
acquisitions of MCM Plaza and PrimeTech) by $1.3 million. This amount was
recorded as a shareholder note receivable as of May 31, 1999 and was
subsequently repaid in full to the Company on July 12, 1999.

Note 5: 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:

<TABLE>
<CAPTION>
                                                                    Comprehensive            Accumulated Other
                                                                        Income              Comprehensive Income
                                                                   ---------------          --------------------
<S>                                                                <C>                      <C>
Balance August 31, 1998                                                                         $              2
Net income for the nine months ended May 31, 1999                   $        5,238
Other Comprehensive Income -
    Foreign currency translation adjustment                                     (2)                           (2)
    Unrealized loss on investments                                             (14)                           14
                                                                   ---------------
Comprehensive income for the nine months
    Ended May 31, 1999                                              $        5,222
                                                                   ===============          --------------------
Balance, May 31, 1999                                                                           $             14
                                                                                            ====================
</TABLE>

The accumulated other comprehensive income balance has been restated to conform
to the SFAS No. 130 requirements.

                                      -7-
<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, including
those discussed under the heading entitled "Risk Factors" in the Company's
Registration Statement on Form S-1, as amended (File No. 333-63241), filed with
the Securities and Exchange Commission. 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 aforementioned Registration Statement on Form S-1.

Results of Operations

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

<TABLE>
<CAPTION>
                                                                      Three Months Ended                Nine Months Ended
                                                                           May 31,                           May 31,
                                                                           -------                           -------
                                                                     1999             1998             1999           1998
                                                                     ----             ----             ----           ----
<S>                                                                  <C>              <C>              <C>            <C>
Total revenues, net                                                    100%            100%             100%          100%

Operating expenses:
Cost of education                                                     45.2            48.0             46.7          47.0%
Selling expenses                                                       2.9             3.9              3.7           3.0%
General and administrative expenses                                   24.4            27.1             27.8          27.7%
Related party general and administrative expense                       0.1            10.9              2.3           8.0%
                                                                      ----            ----             ----          ----

Total operating expenses                                              72.6            89.9             80.5          85.7%
                                                                      ----            ----             ----          ----

Income from operations                                                27.4            10.1             19.5          14.3%

Total other income (expense), net                                      0.6            (0.8)             0.2          (0.6%)
                                                                      ----            ----             ----          ----

Income before provision for income taxes                              28.0             9.3             19.7          13.7%

Provision for income taxes                                             3.9             0.2              1.6           0.2%
                                                                      ----            ----             ----          ----

Net income                                                            24.1%            9.1%            18.1%         13.5%
                                                                      ====            ====             ====          ====
</TABLE>

                                      -8-
<PAGE>

Three Months Ended May 31, 1999 Compared to Three Months Ended May 31, 1998

     Net revenues increased 21.9% from $8.8 million in the third quarter of
fiscal 1998 to $10.7 million in the third quarter of fiscal 1999, primarily due
to additional net revenue from the acquisition of PrimeTech and increased
revenue at all schools owned in both quarters.  For schools owned by the Company
during fiscal 1998, revenue increased by 15.8%.

     Cost of education increased 15.0% from $4.2 million in the third quarter of
fiscal 1998 to $4.8 million in the third quarter of fiscal 1999, due to
additional teaching costs to meet the growth in the number of students attending
the schools, the development of new programs and the acquisition of PrimeTech.
As a percentage of net revenue, cost of education decreased from 48.0% in 1998
to 45.2% in 1999 due to savings realized when an ASPP campus subleased excess
space at MIM.

     Selling expenses were consistent at $0.3 million for both the third quarter
of fiscal 1998 and the related period in 1999 and, as a percentage of revenue
decreased from 3.9% to 2.9%.

     General and administrative expense increased 9.8% from $2.4 million in the
third quarter of fiscal 1998 to $2.6 million in the third quarter of fiscal 1999
and, as a percentage of net revenue decreased from 27.1% to 24.4%, primarily due
to increased efficiencies at the corporate office.

     Related party general and administrative expense, which represents amounts
paid to a company owned by the shareholder that provides management services for
the Company and its schools, decreased 98.6% from $1.0 million in the third
quarter of fiscal 1998 to $0.01 million in the third quarter of fiscal 1999 and,
as a percentage of net revenue, decreased from 10.9% to 0.1%.  Upon consummation
of the Offering, the relationship with the related company was terminated.

     Other income (expense), net increased 191.3% from $(0.07) million in the
third quarter of fiscal 1998 to $0.06 million in the third quarter of fiscal
1999 and, as a percentage of revenue increased from (0.8)% to 0.6%.  Interest
income increased from $0.1 million in 1998 to $0.2 million in 1999 and interest
expense was consistent in both quarters.

     The provision for income taxes was recorded for the third quarter 1999 at a
40% effective rate plus deferred tax adjustments to coincide with company's
change to a C Corporation on March 8, 1999.  There was a negligible tax charge
for the third quarter of 1998 while the Company was an S Corporation.

     Net income increased 221.9%, from $0.8 million in the third quarter of
fiscal 1998 to $2.6 million in the third quarter of fiscal 1999; due primarily
to a decrease in related party general and administrative expense and increased
profitability at all schools.  This was offset by the company's higher income
taxes as a C Corporation and the recognition of a one time deferred tax asset
due to the termination of the S Corporation on March 8, 1999.

Nine Months Ended May 31, 1999 Compared to Nine Months Ended May 31, 1998

     Net revenues increased 28.0% from $22.7 million in the first nine months of
fiscal 1998 to $29.1 million in the first nine months of fiscal 1999, primarily
due to additional net revenue of $3.2 million from the acquisitions of MIM and
PrimeTech.  For schools owned by the Company during all of fiscal 1998, revenue
increased by 15.1%.

                                      -9-
<PAGE>

     Cost of education increased 27.1% from $10.7 million in the first nine
months of fiscal 1998 to $13.6 million in the first nine months of fiscal 1999,
due to additional teaching costs to meet the growth in the number of students
attending the schools, the development of new programs and the acquisitions of
MIM and PrimeTech.  As a percentage of net revenue, cost of education decreased
slightly from 47.0% in 1998 to 46.7% in 1999.

     Selling expenses increased 57.2% from $0.7 million in the first nine months
of fiscal 1998 to $1.1 million in the first nine months of fiscal 1999 and, as a
percentage of revenue increased from 3.0% to 3.7%, primarily due to the
acquisitions of MIM and PrimeTech, which require the use of more costly
advertising media than each of ASPP and U of S.

     General and administrative expense increased 28.8% from $6.3 million in the
first nine months of fiscal 1998 to $8.1 million in the first nine months of
fiscal 1999 and, as a percentage of net revenue increased slightly from 27.7% to
27.8%.

     Related party general and administrative expense decreased 63.0% from $1.8
million in the first nine months of fiscal 1998 to $0.7 million in the first
nine months of fiscal 1999 and, as a percentage of net revenue, decreased from
8.0% to 2.3%.

     Other income (expense), net increased slightly from $(0.1) million in the
first nine months of fiscal 1998 to $0.1 million in the first nine months of
fiscal 1999 and, as a percentage of revenue increased from (0.6)% to 0.2%.
Interest income increased $0.3 million in 1999 compared to the same period in
1998 and interest expense increased $0.1 million in 1999 over 1998.

     The provision for income taxes for the first nine months of fiscal 1999 is
mainly limited to tax liability as of March 8, 1999 which was calculated at a
40% effective rate plus deferred tax adjustments to coincide with company's
change to a C Corporation.  There was a negligible tax charge for the nine
months of fiscal 1998.

     Net income increased 70.6%, from $3.1 million in the first nine months of
fiscal 1998 to $5.2 million in first nine months of fiscal 1999; due primarily
to a decrease in related party general and administrative expense and increased
profitability at all schools.  This was offset by the company's higher income
taxes as a C Corporation and the recognition of a one time deferred tax asset
due to the termination of the S Corporation on March 8, 1999.

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.  Acquisitions have been
financed primarily through debt instruments.  Net cash provided by operating
activities increased from $4.2 million in the nine months ended May 31, 1998 to
$7.2 million in the nine months ended May 31, 1999, due primarily to changes in
the

                                      -10-
<PAGE>

level of net income and accrued income taxes for fiscal 1999. The Company had
$15.6 million of working capital as of May 31, 1999 compared to $2.5 million of
working capital as of August 31, 1998. The increase in working capital was due
primarily to the receipt of proceeds from the Offering and favorable operating
results for fiscal 1999, offset by debt repayment and payment of Shareholder
Loans.

     Capital expenditures increased from $0.6 million in the nine months ended
May 31, 1998 to $1.0 million in the same period in 1999. The increase was due to
continued upgrading of school equipment and facilities and purchases of
additional equipment to accommodate the increasing student population. Capital
expenditures are expected to continue to increase as the student population
increases and the Company continues to upgrade and expand current facilities and
equipment. The Company plans to invest an additional $0.5 million in upgrading
its computer systems during fiscal 1999.  The Company has no other commitments
for material capital expenditures.

Year 2000 Compliance

     The Company is in the process of installing a new management information
system in its corporate headquarters and expects such installation to be
completed by December 1999.  In addition, the Company's schools each have stand-
alone computer systems and networks for internal use and for communication with
its students and with corporate headquarters.  There can be no assurance that
the installation of the Company's new system will proceed smoothly or that
additional management time or expense will not be required to successfully
complete such installation.  Although the Company expects that its new computer
system will be free of the Year 2000 Problem and, based upon its review of its
other internal computer systems, all such systems will be free of the Year 2000
Problem, there can be no assurance that this new computer system will not be
affected by the Year 2000 Problem, that the Company's existing systems will not
be affected by the Year 2000 Problem, or that a failure of any other parties,
such as the DOE or other government agencies on which the Company depends for
student financial assistance or the financial institutions involved in the
processing of student loans, to address the Year 2000 Problem will not have a
material adverse effect on the Company's business, results of operations or
financial condition.  In particular, there can be no assurance that malfunctions
relating to the Year 2000 Problem will not result in the misreporting of
financial information by the Company.  The Company has made inquiries of
substantially all of its material vendors regarding the Year 2000 Problem and
has not detected any significant issues relating to the Year 2000 Problem.
However, the Company has not made a formal assessment of the computer programs
used by government agencies or other third parties with which the company
interacts, or an assessment of its own vulnerability to the failure of such
programs to be free of the Year 2000 Problem.  The Company does not have any
formal contingency plans relating to the Year 2000 Problem.

     The Company believes that the most reasonably likely worst case scenario
for the Company regarding the Year 2000 Problem is a failure of the DOE to
adequately ensure payment of financial aid amounts.  The 1998 Amendments require
the DOE to take steps to ensure that the processing, delivery and administration
of grant, loan and work assistance provided under the Title IV Programs are not
interrupted because of the Year 2000 Problem.  This legislation also authorizes
the DOE to postpone certain HEA requirements to avoid overburdening institutions
and disrupting the delivery of student financial assistance as a consequence of
this problem.  There can be no assurance, however, that assistance will not be
interrupted or that any DOE requirements would be postponed so that there would
be no material adverse effect on the Company's schools.

                                      -11-
<PAGE>

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 9.0% totaling $3.6 million at May 31, 1999.  A significant
majority of the variable interest loans were repaid with proceeds from the
Offering.  The Company estimates that the fair value of each of its debt
instruments approximated its market value on May 31, 1999.

     The Company is subject to fluctuations in the value of the Canadian dollar
vis-a-vis the U.S. dollar.  Its investment in its Canadian operations is
approximately $1.0 million at May 31, 1999 and the fair value of the assets and
liabilities of these operations approximated current market rates at this date.

     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 May 31, 1999.

PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

     On March 8, 1999 the Company completed an initial public offering of Common
Stock (the "Offering").  Prior to the Offering, the Company had one class of
common stock outstanding.  In connection with the Offering, the Company's
existing common stock underwent an approximate 2,941-for-one stock split which
was then converted into 4,900,000 shares of Class B Common Stock.  The Company
authorized 30,000,000 shares of Class A Common Stock, 2,000,000 of those shares
were issued and 1,125,000 of those shares were reserved for issuance under the
Company's 1999 Stock Incentive Plan and Stock Purchase Plan.

     In the Offering, the Company issued and sold 2,000,000 shares of Class A
Common Stock at a price of $14.00 per share.  The Company received total net
proceeds, after deduction of underwriting discounts and offering costs, of
approximately $26.0 million.  The net proceeds from the Offering were used to
repay $4.7 million of the company's indebtedness, pay a distribution to the
Company's shareholder of approximately $11.9 million and repay $0.9 million of
indebtedness due to the Company's shareholder in connection with the
acquisitions of MCM Plaza and PrimeTech.  The remaining $8.5 million of proceeds
is available for working capital and general corporate purposes.

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

     Pursuant to Section 7.10 of the Business Corporation Act of the State of
Illinois, on August 26, 1998, the stockholder of the Company, by written consent
without a meeting, adopted resolutions approving the Amended Articles of
Incorporation and the Amended and Restated Bylaws of the Company. Votes (not
reflecting reclassification, stock splits or the Offering) cast for the above
matters: 1,666 against: 0 abstaining: 0.

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<PAGE>

     Pursuant to Section 7.10 of the Business Corporation Act of the State of
Illinois, on August 26, 1998, the stockholder of the Company, by written consent
without a meeting, adopted resolutions:

     1.   Approving a form of Indemnification Agreement for directors and
          officers of the Company.

     2.   Appointing Arthur Andersen LLP as the Company's outside independent
          accounting firm.

     3.   Approving the adoption of the Argosy Education Group, Inc. 1999 Stock
          Incentive Plan.

     4.   Approving the adoption of the Argosy Education Group, Inc. Employee
          Stock Discount Purchase Plan.

Votes (not reflecting reclassification, stock splits or the Offering) cast for
the above matters: 4,900,000 against: 0 abstaining: 0.

     Pursuant to Section 7.10 of the Business Corporation Act of the State of
Illinois, on January 31, 1999, the stockholder of the Company, by written
consent without a meeting, adopted resolutions electing Harold J. O'Donnell as a
director of the Corporation.  Votes (not reflecting reclassification, stock
splits or the Offering) cast for the above matters: 4,900,000 against: 0
abstaining: 0.

     On March 4, 1999, the Company declared an approximate 2,941-for-one stock
split and converted all outstanding shares of common stock into Class B common
stock.  The Company also authorized 30,000,000 shares of Class A common stock
and 5,000,000 shares of preferred stock.

Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits

   27.1  Financial Data Schedule

   (b)   Reports on Form 8-K:

     None

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.

July 15, 1999                                  /s/  Charles T. Gradowski
                                               ----------------------------
                                               Charles T. Gradowski
                                               Chief Financial Officer

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