FORM 10-QSB/A
Amendment No. 1
(To include disclosure on Year 2000 issues)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 1998

[   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ________ to ________

Commission File #0-11078

THE AMERICAN EDUCATION CORPORATION
(Exact name of registrant as specified in its charter)

Colorado
(State or other jurisdiction of incorporation, or organization)

84-0838184
(IRS Employer Identification number)
                    
7506 North Broadway Extension, Suite 505, Oklahoma City, OK  
73116
(Address of principal executive offices)

(405) 840-6031
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.025 per share

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__

Number of shares of the registrant's common stock outstanding as 
of September  30, 1998:     12,913,046

Transitional Small Business Disclosure Format			
	         
YES __   NO  X  

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL      
CONDITION AND RESULTS OF OPERATIONS


Year 2000 Issue
     Many existing computer systems use only the last two digits 
to identify years in the date field. As a result, those systems 
may not be able to properly identify the correct year after the 
beginning of the year 2000, believing that "00" is referring to 
the year 1900. Systems that do not properly recognize the correct 
date could generate erroneous information or cause a system to 
fail. This potential problem is generally referred to as the 
"Year 2000 Issue". 
     The Company is continuing its review and assessment of the 
potential effect of the Year 2000 Issue. Thus far, the Company 
has completed the initial review of its information technology 
systems, including both software and hardware, and determined 
that they appear to be Year 2000 compliant. Additionally, the 
Company had previously planned to upgrade its accounting and 
reporting systems independent of Year 2000 considerations and 
has selected a Year 2000 compliant system that is anticipated to 
be installed by March 31, 1999. This installation date has not 
been accelerated by Year 2000 concerns.
     The Company has tested the educational software systems that 
it produces for sale and believes they are Year 2000 compliant.
     The Company is currently in the process of contacting 
critical suppliers of products and services to determine the 
extent to which the Company may be at risk if such parties 
fail to resolve their own Year 2000 Issues. The Company will 
assess and attempt to mitigate any risks that may be perceived by 
such possible failures. The effect, if any, on the Company's 
results of operations from the failure of third parties to be 
Year 2000 compliant cannot be reasonably estimated.
     The Company is still evaluating its non-information 
technology systems such as telephones, utilities, alarm systems 
and climate control systems and expects to complete its 
evaluation by June 30, 1999. Based on its preliminary assessment, 
the Company currently believes that these systems are or will be 
Year 2000 compliant.
     The Company has not yet developed a contingency plan but 
will determine if it appears one may be necessary as the current 
assessment is refined.
     Based on the Company's overall current assessment to date, 
no matters have been identified and the Company does not 
currently believe that the Year 2000 Issue will have a material 
adverse effect on the Company's financial position or results of 
operations. The Company also believes any costs that may be 
incurred relating to the identification or remediation of Year 
2000 issues will not be material. The Company's beliefs and 
expectations, however, are based on certain assumptions that may 
prove to be inaccurate, especially those relating to third 
parties over which the Company has no control. Potential sources 
of risk include the inability of suppliers of goods or services 
to be Year 2000 compliant, which could result in delays in 
product deliveries or disruption of distribution channels.


SIGNATURES

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

The American Education Corporation


January 20, 1999

                                                                               
By: /s/Jeffrey E. Butler, 
    Chief Executive Officer
    Chairman of the Board
    Treasurer