UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

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

For the fiscal year ended: JUNE 30, 2005

Commission file number: 1-13988

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

DELAWARE 36-3150143
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)

ONE TOWER LANE, SUITE 1000, OAKBROOK TERRACE, ILLINOIS 60181
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number; including area code (630) 571-7700

Securities registered pursuant to section 12(b) of the Act:

Title of each class Name of each exchange on which registered:

Common Stock $0.01 Par Value NYSE, CSE
Common Stock Purchase Rights NYSE
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Securities registered pursuant to Section 12(g) of the Act: None

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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer.
Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell company.
Yes [ ] No [X]

SEPTEMBER 1, 2005 - $1,073,073,000

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant. The market value was
computed using the closing sale price of the common stock on the date
indicated. Shares of common stock held directly or controlled by each
director and executive officer have been excluded. Determination of stock
ownership by non-affiliates was made solely for the purpose of responding
to this requirement and the Registrant is not bound by this determination
for any other purpose.

SEPTEMBER 1, 2005 - 70,542,424 shares of Common Stock, $0.01 par value

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the documents incorporated by reference and the Part of
the Form 10-K (e.g. Part I, Part II, etc.) into which the document is
incorporated:

Certain portions of the Registrant's definitive Proxy Statement for the
Annual Meeting of Stockholders to be held on November 9, 2005, are
incorporated into Part III of this Form 10-K to the extent stated herein.

Exhibit Index located on Pages 167-171 Total number of pages - 179

DeVry INC.
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED JUNE 30, 2005

TABLE OF CONTENTS
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PAGE #
PART I ------
- ------
Item 1 - Business 3
Item 2 - Properties 66
Item 3 - Legal Proceedings 73
Item 4 - Submission of Matters to a Vote of Security Holders 74
- Additional Information
- Executive Officers 75

PART II
- -------
Item 5 - Market for Common Equity and
Related Stockholder Matters 82
Item 6 - Selected Financial Data 83
Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 83
Item 7A - Quantitative and Qualitative Disclosures
about Market Risk 114
Item 8 - Financial Statements and Supplementary Data 116
Item 9 - Changes in and Disagreements with Accountants 116
Item 9A - Controls and Procedures 116
Item 9B - Other Information 118

PART III
- --------
Item 10 - Directors and Executive Officers 161
Item 11 - Executive Compensation 161
Item 12 - Security Ownership of Beneficial Owners and Management 162
Item 13 - Certain Relationships and Related Transactions 162
Item 14 - Principal Accountant Fees and Services 162

PART IV
- -------
Item 15 - Exhibits and Financial Statement Schedules
- Financial Statements 163
- Financial Statement Schedules 163
- Exhibits 163

SIGNATURES 165
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PART I

FORWARD LOOKING STATEMENTS
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Certain information contained in this annual report on Form 10-K
may constitute forward-looking statements such as statements
relating to DeVry's future financial results and strategies,
business plans or objectives and beliefs about future events.
They are often identified by the use of qualifiers in their
description such as "expects", "is likely", "intends",
"estimates", "forecast", "assumption" or other similar
expressions. Such statements are inherently uncertain and may
involve risks that could cause future results to differ
materially from the forward-looking statements. Potential risks
and uncertainties include, but are not limited to:

Shifts in applicant career interests away from the
concentration of the Company's undergraduate programs in
selected areas of technology, healthcare and business that
the Company does not adequately anticipate or respond to.

Increased competition in recruiting new students and retaining
students already enrolled.

Reductions in student financial aid, upon which the Company is
highly dependent for the collection of its billings, because
of changes to program regulations affecting student
eligibility or reductions to federal and state funding levels.

Failure to maintain eligibility for student participation in
financial aid programs.

Reductions in the amount of corporate employee tuition
reimbursement because of changes to tax laws or a lower level
of corporate earnings that affects employee educational
benefit plans.

Loss or limitations in accreditations and licensing approvals
affecting DeVry University, Ross University or Deaconess
College of Nursing.

Changes to laws and regulations that adversely affect the
Company's current operations or future growth opportunities.

Ability to hire and retain faculty with appropriate
qualifications such as education and experience.

Reductions in tuition pricing by other educational
institutions that affect the Company's current competitive
position and its ability to maintain and increase tuition
rates in the future.

Some of these risks and uncertainties are described more fully in
the sections of the Annual Report on Form 10-K captioned
"Business - Competition, -Student Recruiting, -Accreditation and
Approvals, -Tuition and Fees, -Financial Aid and -Financing
Student Education, -Career Services and Faculty".

ITEM 1 - BUSINESS
- -----------------
DeVry Inc. (the "Company") is incorporated under the laws of the
State of Delaware. The Company's executive offices are located
at One Tower Lane, Oakbrook Terrace, Illinois, 60181. The
Company's telephone number is (630)571-7700.

The Company, through its wholly-owned subsidiaries, owns and
operates DeVry University, Ross University ("Ross"), Deaconess
College of Nursing ("Deaconess") and Becker Professional Review
("Becker").

DeVry University includes DeVry undergraduate degree programs in
technology and business, and Keller Graduate School of Management
("Keller"), with graduate programs in management, both operated
by DeVry University, Inc. DeVry University is one of the largest
private, degree-granting, regionally accredited higher education
systems in North America.

Ross University includes Ross University School of Medicine and
Ross University School of Veterinary Medicine, located in the
Caribbean countries of Dominica and St. Kitts/Nevis,
respectively. Ross University is one of the world's largest
providers of medical and veterinary medical education. These
schools were acquired by the Company in May 2003 to further
diversify the Company's educational program offerings.

Deaconess, acquired by the Company in March 2005, offers degree
programs in nursing. Located in St. Louis, Missouri, Deaconess
had approximately 450 students at the time of acquisition.
Deaconess offers both associate and bachelor's degree programs in
nursing and a degree completion program for registered nurses who
previously completed an associate degree program. The
acquisition of Deaconess adds to the Company's current offerings
in medicine and healthcare. With Ross University, Deaconess
makes up the Company's Medical and Healthcare segment.

Becker prepares candidates for the Certified Public Accountant
("CPA") and Chartered Financial Analyst ("CFA") professional
certification examinations. In January 2001, as a complement to
its Becker Professional Review operation, the Company acquired
the operations of Stalla Seminars ("Stalla"), a leading provider
of review courses and study materials for the CFA certification
exams. In October 2003, the Company acquired the assets of
Person Wolinsky CPA Review to further complement its Becker
Professional Review operation. Person Wolinsky offered CPA
review courses in the New York City, Philadelphia and Washington,
D.C. areas. In July 2005, the Company announced that it entered
the continuing professional education business through the
acquisition of the assets of Gearty CPE to further complement its
Becker Professional Review operation. Gearty CPE is a provider
of continuing professional education programs and seminars in
accounting and finance predominantly to Fortune 500 companies in
the New York/New Jersey metropolitan area.

The amounts of revenue and identifiable long-lived assets of the
Company's U.S. and foreign operations, as well as information
concerning the revenues, operating income and assets of the
Company's business segments are presented in Note 12 to the
Consolidated Financial Statements, "Segment Information".

DEVRY UNIVERSITY
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Undergraduate Programs
----------------------
The DeVry undergraduate programs trace their origin to Dr. Herman
DeVry. For more than 70 years DeVry has provided career-oriented
technology-based education to high school graduates in the United
States and Canada. The first DeVry Institute was opened in
Chicago in 1931 as an electronics school. Today, DeVry
undergraduate programs are offered on twenty three campuses in

the United States and Canada, at more than fifty DeVry University
Center ("DVUC") teaching locations and through DeVry University
Online. Keller Graduate School of Management graduate degree
programs are offered on a number of the campuses, at DeVry
University Centers and online.

Originally offering only undergraduate programs in electronics,
DeVry introduced its undergraduate computer information systems
curriculum in 1979. As the number of high school graduates in
the U.S. declined during the 1980's, DeVry expanded its program
offerings and delivery schedule into the evening hours to serve
larger numbers of working adults. In the summer of 1986, a
bachelor's degree program in business operations was introduced,
followed by the telecommunications management program and the
introduction of an accounting program in the spring of 1988. In
1994, DeVry introduced the undergraduate technical management
degree completion program which focuses on business and
management skills for students who already have an associate
degree. In 1997, the undergraduate business operations program
was redefined and is now the business administration program with
a concentration in accounting, replacing the previously separate
accounting program. In 1998, in response to the increasing
employment demands of the information technology field, a one-
year Information Technology program was introduced to bachelor's
level college graduates of any discipline seeking career change
and enhancement opportunities in IT. In fiscal 2000, DeVry
introduced a new undergraduate bachelor's degree program in
computer engineering technology, ("CET"). This program is aimed
at helping students develop skills and knowledge in software
engineering, operating systems, data structures and algorithms,
and distributed computer systems.

Programmatic initiatives developed during the past several years
have continued to expand DeVry University's undergraduate program
reach. These initiatives include new delivery formats, such as
weekend class schedules, compressed and accelerated course
schedules, technology-assisted delivery options for classroom-
based courses and courses offered completely online.

In fiscal 2001, DeVry announced two new undergraduate educational
program delivery initiatives. The first involved online delivery

of educational programs. The bachelor of business administration
degree program was the first undergraduate DeVry program to be
offered in the online format. Subsequently, the bachelor of
science in information technology, the bachelor of science in
technical management and the bachelor of science in computer
information systems were added to its online program offerings.
Today, in addition to the original online program offerings,
students can enroll for online programs in Health Information
Technology, Network and Communications Management and Network
Systems Administration. The Company's newest undergraduate
program, Game and Simulation Programming, is expected to be
offered online during fiscal 2006. Additional programs and
concentrations within the programs are expected to be added to
the online format in the future. The online format allows DeVry
to better serve place-bound students and students whose schedules
prevent them from attending classes in person.

The second new delivery initiative was the formation of DeVry
University Centers. In fiscal 2001, DeVry University opened the
first adult-learner DeVry University Center in conjunction with
the existing graduate school teaching site in the downtown
Chicago area. By the end of fiscal 2005, undergraduate programs
were offered at more than 40 DeVry University Center locations.
Additional DeVry University Centers are planned to be opened in
fiscal 2006. The addition of undergraduate program offerings to
former graduate teaching centers and to newly opened teaching
centers is aimed at providing both undergraduate and graduate
education convenient to working adults with the option to combine
online with onsite coursework.

At the start of fiscal 2004, DeVry University introduced three
new undergraduate educational programs. The new programs were
Biomedical Engineering Technology ("BMET"), Biomedical
Informatics ("BMI") and Health Information Technology ("HIT").
BMET and BMI are bachelor's degree programs. The HIT program is
offered at the associate degree level.

Biomedical Engineering Technology is an interdisciplinary
program that covers engineering design and implementation of
equipment and processes for life sciences with applications in
pharmaceuticals and environmental science; with applications

in areas of physical science such as development of
artificial limbs and biomedical computing.

Biomedical Informatics is the application of information
technology to healthcare in fields such as healthcare
administration, medical communications and biomedical
research.

Health Information Technology program centers around the
management of electronic patient record systems including
maintenance, analysis, assurance of privacy and security of
those records.

These healthcare education programs have been expanded to other
campus locations since their introduction and may be offered at
additional locations in the future depending upon local market
demand.

In addition to the new healthcare programs, the
Telecommunications Management program was revised and renamed
Network and Communications Management. The change in name better
reflects the evolution of the content and focus of the program
since its introduction to include newer areas of
telecommunications such as enterprise network design,
administration, security and management.

In fiscal 2005, DeVry University made further changes and
improvements to its program offerings. The associate degree
program in Electronics and Computer Technology was revised so
that students now have the option to complete the program more
quickly and to take all required coursework on a three-day per
week schedule. Previously offered in a nine semester format, the
Computer Information Systems program has been revised to a new
eight-semester format beginning with summer 2005. Also, a new
undergraduate program, Game and Simulation Programming, was
offered for the first time in summer 2005. This new program
prepares graduates to work in the computer and video game
industry by bringing together competencies in game and simulation
design.

Laboratory courses throughout each curriculum provide the
opportunity to integrate classroom learning with a practical,

hands-on experience that better prepares the student for the
workplace. DeVry University courses focusing on technical topics
include laboratory activities for further development of
technical skills through applied learning activities. For some
courses, laboratory activities are delivered in a specialized
laboratory facility in which students use specified equipment and
software. For some courses, laboratory activities take place in
a lecture-lab classroom, using PCs and software so that learning
and application are effectively integrated.

To facilitate student success, DeVry University invests in
resources for libraries and academic support services that can
assist students in any phase of their educational program. In
addition, DeVry encourages undergraduate students to participate
in an array of offered social and professional activities. DeVry
supports student organizations closely linked to the professional
aspirations of its students. Campuses regularly invite
technology and business leaders into the classroom. Faculty
members serve as mentors for student chapters of professional
associations and sponsor a wide range of student co-curricular
projects. Each student is also required to complete a student
success or problem solving strategy course aimed at preparing
students to assume responsibility for their learning and growth
through practical strategies and methods for realizing success.

Graduate Programs
-----------------
Keller Graduate School was founded in Chicago in 1973 based upon
the concept that the most important components of management
education are effective teaching and student mastery of practical
management skills. Keller emphasizes practitioner orientation,
excellence in teaching and service to working adults. Classes
are offered in the evenings and on weekends. Building on its
original MBA program offering, Keller now offers a total of seven
management masters degree programs and numerous concentrations
within some of these programs at approximately 70 sites in the
U.S. and also in the online format.

At the graduate level, in addition to its original Master of
Business Administration ("MBA") program which Keller Graduate
School began offering in 1977, Keller began offering a Master of
Project Management ("MPM") degree program in 1991 and a Master of

Human Resource Management ("MHRM") degree program in 1993. In
1997, Keller introduced a Master of Telecommunications Management
("MTM") program. In 1998, Keller began offering two new
programs, the Master of Information Systems Management ("MISM")
and the Master of Accounting and Financial Management ("MAFM").
The MAFM program offers students a choice of three professional
certification exam-preparation emphases: Certified Public
Accountant, Certified Management Accountant or Chartered
Financial Analyst. These exam-preparation concentrations were
developed in conjunction with the Becker Professional Review. In
2002, Keller introduced its seventh graduate degree program, the
Master of Public Administration ("MPA"). The MPA offers students
a choice of three tracks: Government Management, Nonprofit
Management and Health Management.

To broaden the scope and appeal of the original MBA program and
the other programs as well, concentrations and graduate
certificates have been developed within these programs.

All of the Keller graduate programs and concentrations are aimed
at satisfying the need for advanced education in high demand
areas. In addition to its expanding network of classroom-based
program offerings, Keller offers all seven of its degree programs
in the online format. These offerings are designed to allow
students to efficiently complete their degrees entirely online or
in any combination of online and on-site coursework that suits
their needs.

Keller's graduate school programs are practitioner-oriented and
offer a unique approach to graduate management education. The
programs build students' competencies in areas critical to
success in today's business world. Faculty members are
practicing professionals who bring their expertise to the
classroom, emphasizing theory and practices that will best serve
students in their work as managers. Critical competencies in
areas such as business communications, electronic commerce,
technology, ethics, quality and international issues are woven
throughout the curricula. Keller's curricula, like the
undergraduate curricula, are generally consistent at all
locations, and are subject to regular review for relevance to
both students and employers.

Academic Calendar
-----------------
Effective with the start of fiscal 2004, DeVry University adopted
a uniform academic calendar for both the undergraduate and
graduate programs across all methods of educational delivery, on-
site and online. The uniform academic calendar consists of three
academic periods of 16 weeks each. Within these periods are a 15-
week semester and two 8-week sessions. To align the
undergraduate and graduate programs to fit this schedule, the
Keller graduate curriculum was redesigned so that all courses,
whether on-site or online, would be offered in the new 8-week
session.

Online Delivery
---------------
Online learning is growing rapidly within higher education. The
vast majority of online students are adult learners attracted by
the flexibility and convenience of this form of learning. The
DeVry University approach to distance learning is to focus on the
quality of education delivered to the student. The technical
feasibility of the delivery system, while an integral component
of successful online course delivery, is not our sole or primary
focus.

To enhance the learning process, many undergraduate and graduate
school courses are being taught using an integrated learning
system that incorporates both on-site and online instruction.
This model better supports student learning by combining onsite
classes with instructor-guided online activities incorporating
feedback from faculty and fellow students throughout the course.

Graduate programs were first offered online in September 1998.
The first online undergraduate program was introduced in 2001.
DeVry University Online not only serves the online student but
also supports campus and DeVry University Center-based students
with an option to "mix and match" on-site and online courses of
study to best meet their individual needs and schedules. Online
program offerings now include all seven of Keller's masters
degree programs and an expanding number of undergraduate programs
to students who reside beyond the geographic reach of local
centers, whose schedules preclude attending weekly classes on-
site and/or who cannot find their desired course at the teaching
center near where they live or work. Additional programs and

concentrations within the programs are expected to be added in an
online format in the future.

In the latter part of fiscal 2005, DeVry University began to
offer a limited number of graduate and undergraduate on-site and
online courses using electronic textbook materials ("eBooks") in
place of conventional paper-based text materials. eBooks are
available to students at the very start of the course and
eliminate the occasional out of stock condition that can occur
with printed textbooks. Among the other advantages of eBooks are
the ability for students to do text searches, highlight key
materials and annotate the eBook with notes and comments. The
eBook can be read online or the student can print copies of any
pages they want in paper format. DeVry University expects to
expand the use of eBooks to other courses during the coming year.

Facilities Improvement and Expansion
------------------------------------
In addition to its programmatic expansion and new delivery method
initiatives described above, DeVry University embarked upon a
strategy of facility improvement and expansion to attract and
retain its students. This improvement and expansion strategy
included facility renovations, expansion of existing campuses,
new campuses openings and the formation of DeVry University
Centers.

Recent facility expansions and improvements include the July
2001, new undergraduate campus opening in the Seattle,
Washington, area, the first campus in that state. In November
2001, a new undergraduate campus was opened in the Washington,
D.C. area, the first campus in that area.

In July 2002, a new undergraduate campus was opened in the
Philadelphia, Pennsylvania, area, the first DeVry University
undergraduate campus in that state. In November 2002, a new
undergraduate campus was opened in Miramar, Florida, the second
campus in the state of Florida. Also, in March 2003, a new
campus was opened in the Denver, Colorado, area, which replaced
the previous primary operating location at the original site
acquired in the July 2000 purchase of Denver Technical College.

In September 2003, a new campus was opened in Houston, Texas, the
second campus in the state of Texas.

In July 2005, a dormitory facility was opened adjacent to the
Fremont, California, campus. The Company believes, particularly
in this market area with very little proximate housing, that the
availability of this student housing option will enhance new
student recruiting and contribute to increased campus
enrollments.

Keller graduate classes are being offered at approximately 70
locations nationwide. Additional teaching centers are planned to
be opened in fiscal 2006. Some of Keller's teaching sites are co-
located on DeVry undergraduate campuses but most operate as a
part of smaller, more centrally located DeVry University Centers,
which offer both graduate and undergraduate programs. Also, one
teaching site is located at the Company's corporate headquarters
in Illinois. In addition, some DeVry University teaching sites
host Becker Professional Review classes where space and location
are appropriate.

DeVry University Online is a cornerstone of both the DeVry
University Center initiative and the Company's educational system
capacity strategy. DeVry University Online provides "mix-and-
match" capability, ensures the availability of a full complement
of courses and helps optimize use of faculty and classroom space
at all teaching locations.

Enrollment Trends
-----------------
In spring 2005, which was the final academic period in the
Company's fiscal year 2005, approximately 38,083 full and part-
time students were enrolled in DeVry University's undergraduate
day, evening and online programs. The Company's DeVry
undergraduate programs accounted for almost 70% of the Company's
revenues in fiscal 2005. In addition, there were approximately
12,113 coursetakers in Keller graduate programs for the Spring
2005 term that began in May.

DeVry University's summer semester began in July 2005. This is
the first semester in the Company's fiscal year 2006. DeVry
undergraduate enrollments have been concentrated in the areas of
computer, electronics and telecommunications technology. The
Company believes that interest in these programs as careers has
been adversely affected by the news of employee layoffs and

financial difficulty encountered by many firms in the technology
sector of the economy. A recent report by the American
Association for the Advancement of Science concluded that
"traditional" young students in four-year colleges are
increasingly deciding not to major in computer science. This
concurs with another report from the Higher Education Institute
of UCLA, which found that 60% fewer students at the college level
wanted to study computer science in 2004 as compared to 2000.
Further evidence of a declining interest in technology as a
career is the fact that of the 1.1 million high school seniors in
the U.S. who took the college entrance exam in 2002, just under
six percent indicated plans to pursue a degree in engineering,
nearly a 33% decrease in interest from the previous decade.
Further evidence of the declining interest in technology as a
career choice is that the number of engineering degrees awarded
in the U.S. have fallen approximately 20% from their peak in
1985.

Partly as a result of these factors, total undergraduate
enrollment for the summer 2005 was 36,220, a decrease of 4.8%
compared to 38,036 in the previous summer. However, in the
graduate school programs, there were 11,434 coursetakers in the
July term, an increase of 11.3% from the same term of last year.

With expanded marketing emphasis on its undergraduate business
and healthcare programs, the increased number of DeVry University
Center locations and the growing demand for its online programs,
new student undergraduate enrollments for the summer 2005
increased by 7.3% from the previous year. This follows an
increase of 6.4% in new undergraduate student enrollments in
spring 2005.

DeVry University operates in the higher education segment of the
overall education market. According to the Department of
Education's National Center for Education Statistics, in the fall
of 2003, there were an estimated 14.4 million students enrolled
in undergraduate programs at degree-granting, Title IV eligible
institutions in the United States. Changing demographics are
expected to increase the size of the higher education market and
benefit the Company's future enrollment.

The total postsecondary student population can be thought of as
two separate categories of students - career-launchers, who are
mostly traditional college age students, and career-enhancers,
who are mostly working adult students. After a period of nearly
two decades during which the number of graduating high school
seniors (career-launchers) declined by 25 percent to
approximately 2.5 million, 1995 marked the beginning of a slow
but steady increase in the number of high school graduates
resulting from the "baby boom echo".

The U.S. Department of Education's National Center for Education
Statistics forecasts that the number of graduating high school
seniors will continue to slowly but steadily increase until it
peaks at about 3.2 million in 2009. The forecasted rate of
increase in the number of high school graduates in many of the
states in which the Company's undergraduate programs are offered
is greater than the forecasted national rate of increase, further
contributing to future enrollment growth opportunities. DeVry
University has campuses in six of the 10 states projected to have
the largest percentage increase in high school graduates from
2001 to 2017. Of the 10 states projected to have the largest
absolute increase in the number of high school graduates during
this period, DeVry University currently has undergraduate
campuses in nine of them.

In addition, it is expected that a greater percentage of high
school graduates will choose to continue their education. Since
bottoming out at 46.6% in 1973, the percentage of U.S. high
school graduates entering college increased, reaching an
estimated peak of 67% in 1997 before declining somewhat to 61.7%
in 2001. By 2003 it had increased to 63.9% and is expected to
increase further, likely flattening in the 64-65% range.

Students in the 18 to 24 year-old age cohort represent a
substantial portion of DeVry University's full-time undergraduate
day school enrollments. An increasing proportion of these
students is demographically different from college bound
generations of the past. They include more minorities, women,
recent immigrants and come from lower income families. Some of
the DeVry undergraduate campuses rank at or near the top of the
list of institutions with degrees granted to minority students in

the fields of computer and information science, business and all
academic disciplines combined. DeVry University's undergraduate
programs have attracted many students from immigrant and minority
populations. Often these students are the first in their family
to attend college.

In addition to the projected growing number of traditional-age
students, more adults, primarily working adult career-enhancers,
are returning to college. It is currently estimated that perhaps
as many as 60% of all college students are 25 years of age or
older, up from about 28% in 1970 and 43% in 2000. The Company
believes that more than half of its DeVry University's
undergraduate enrollments are 25 years of age or older. At DeVry
University Online and DeVry University Centers, which are
designed for the adult student and which have been the fastest
growing segments of DeVry University's operations, an estimated
80% or more of the students are age 25 or older.

The increased number of older students attending college today
has positively influenced DeVry University enrollments and has
been fueled by (1) the development of the knowledge-based
economy; (2) the rapid pace of technological change in the
workplace; (3) the growing recognition of the strong correlation
between education and income; (4) the emergence of e-learning
tools that make continuing education more accessible and
convenient; and (5) growing recognition of the importance of
lifelong learning. The number of college students who are 25
years of age or older has increased from 4.9 million in 1987 to
six million or seven percent of this age cohort in 2000, an
increase of nearly 23% that outpaced the growth in the total
number of students over that time frame. Projections indicate
that the percentage of this age cohort attending college will
continue to increase, reaching 8.2% by 2013. The U.S. Census
Bureau reported that in 2003, only an estimated 27% of American
adults over 25 had a bachelor's degree in a U.S. labor market
that increasingly requires more and more education. The Bureau
of Labor Statistics ("BLS") projects that through 2010, those job
categories requiring at least some postsecondary education will
grow nearly twice as fast as those not requiring such skills. In
addition, the BLS projects that the number of jobs requiring a
bachelor's and/or associates degree will grow among the fastest
of all categories. This trend supports the belief that adult

student participation rates in postsecondary education are
expected to continue to increase as noted above.

Another strong motivation for the growing enrollments in
postsecondary institutions is the income premium associated with
additional education. In 2000, the median income of U.S.
employees with a bachelor's degree was approximately $50,000,
more than 60% higher than the median for those with only a high
school education. The wage gap is even larger for those with
graduate degrees.

MEDICAL AND HEALTHCARE
- ----------------------
Ross University
---------------
Founded in 1978, Ross University operates two schools. Ross
University School of Medicine offers a Doctor of Medicine (M.D.)
degree and Ross University School of Veterinary Medicine offers a
Doctor of Veterinary Medicine (D.V.M.) degree. The schools are
located in the Caribbean island countries of Dominica and St.
Kitts/Nevis, respectively. Ross University is one of the world's
largest providers of medical and veterinary medical education
with over 3,029 students enrolled in the May 2005 semester.

Ross medical students complete a four semester (approximately 16
months) basic science and pre-clinical curriculum in modern
classrooms and laboratories on a campus located on Dominica
followed by a one semester course of Advanced Introduction to
Clinical Medicine at a campus in Miami, Florida. Following their
successful passage of the USMLE Step 1 exam, the remainder of the
ten-semester program is completed through clinical rotations
conducted at more than 40 affiliated teaching hospitals in the
U.S. The educational program is modeled after the educational
program of U.S. medical schools. Ross offers three academic
semesters per year beginning in May, September and January so
that students can complete their basic science and pre-clinical
curriculum in less time than at a U.S. medical school. The
program prepares students for general medical practice and
provides the foundation for postgraduate specialty training in
the U.S. More than 4,000 graduates have received their M.D.
degree from Ross since 1978 and are practicing in all 50 states.

Ross veterinary students complete a seven semester pre-clinical
(basic sciences plus medicine and surgery) curriculum in a large

modern facility on St. Kitts. The basic science curriculum is
structured to provide a veterinary education that is fully
comparable to that offered at U.S. veterinary schools. After
completing their pre-clinical curriculum, Ross veterinary
students enter a clinical clerkship of approximately 48 weeks
duration at one of 23 affiliated U.S. Colleges of Veterinary
Medicine. More than 1,600 students have received their D.V.M.
degree from Ross.

Applicants to Ross University typically have (1) made Ross their
first or only choice of schools because of its commitment to and
focus on teaching instead of the research focus of many other
schools, (2) applied to U.S. medical or veterinary schools but
failed to gain entry, or (3) elected not to apply to U.S. schools
because of self-perceived shortcomings in their academic record
but who still desire to become U.S. physicians or veterinarians.
The average Ross medical student is 26 years old, two years older
than the U.S. medical school average and the student population
is almost 60% male. The average Ross veterinary student is 26
years old, one year older than the U.S. veterinary school average
and the student population is over 70% female. Most Ross
students are either citizens or permanent residents of the U.S.

Deaconess College of Nursing
----------------------------
In March 2005, the Company acquired Deaconess College of Nursing.
Founded more then a century ago, Deaconess College currently
offers two programs in nursing education: a Bachelor of Science
in Nursing ("BSN") Program and an Associate of Science in Nursing
("ASN") Program. The BSN program offers two options; the
traditional 4-year on-campus option and an on-campus or online
option for students who have already achieved Registered Nurse
("RN") certification and who wish to complete their BSN degree.
The ASN program also offers two options. The ASN with Practical
Nurse ("PN") component offers non-traditional students the
opportunity to receive their ASN degree online. These students
may elect to take the Practical Nursing licensure exam at the
completion of half of the program. There is also an opportunity
for Licensed Practical Nurses ("LPN") to work toward their ASN
degree through either the on-campus or online options.

Both degree programs provide nursing skill training and general
education through classroom and online courses. Additionally, as

a part of the program, students who have not previously completed
clinical training and the associated licensing are required to
complete extensive clinical training at hospitals or other
healthcare facilities. Deaconess has developed numerous
partnerships with hospitals to provide this clinical training.
The average Deaconess student is a recent high school graduate
and is female.

PROFESSIONAL and TRAINING
- -------------------------
In June 1996, the Company acquired the Becker CPA Review. At the
time of acquisition, Becker was a leading international training
firm preparing students to take the national Certified Public
Accountant and Certified Management Accountant examinations.

Between 1996 and 1999, Becker acquired several regional CPA
review firms, strengthening its presence in the east coast
market. In July 1999, the Company acquired the operations of
Conviser Duffy CPA Review. Conviser was a national provider of
CPA review courses, serving approximately 12,000 students
annually at more than 200 locations. With the Conviser Duffy
acquisition, Becker teaching sites included numerous college
campuses throughout the United States. In fiscal 2004, the
Company acquired the assets of Person Wolinsky CPA Review.
Person Wolinsky offered CPA review courses in the New York City,
Philadelphia and Washington D.C. areas.

In July 2005, the Company acquired Gearty CPE, a provider of
continuing professional education programs and seminars in
accounting and finance in the New York/New Jersey metro-area.
This acquisition complements Becker's existing CPA exam review
business as it enables Becker to enter the CPE marketplace.

Becker offers CPA review classes at approximately 300 locations,
including sites in more than 30 foreign countries. Becker's
numerous teaching locations and the availability of online makeup
sessions help students whose schedules may occasionally conflict
with class dates. To reach students for whom class attendance is
not practical because of location or schedule, Becker offers the
complete CPA review course conveniently packaged on CD-ROM or in
an online format. CD-ROM and online review course enrollments
have grown steadily over the past several years, equaling
approximately 40% of total enrollment, demonstrating the

importance of distance education for many potential exam takers.
The CD-ROM and online products are interactive, bridging the gap
between classroom study and self-study. The Becker CD-ROM course
provides the same instructor-led lessons and materials used in
the classroom course. This method of study offers the
opportunity to study at one's own pace in the convenience of
one's home, office or anywhere else.

The Becker online course provides the same materials offered in
the classroom or CD-ROM format. In addition each student has an
online instructor who provides individualized attention and
assistance as needed. The structured lesson plan emphasizes the
"work and remember" teaching system which has been successful in
the Becker classroom environment.

Becker's proprietary course materials and teaching methods
include CD-ROM based presentation materials coupled with live
classroom instruction. The Company believes that pass rates on
the CPA exam for Becker students are substantially higher than
the national average pass rate for exam takers who have not taken
the Becker review course. The Becker exam review course
graduates represent nearly one half of all students passing the
CPA exam.

The November 2003 CPA exam was the last exam offered in the
traditional paper and pencil, fixed date and place format.
Beginning in April 2004, the exam is offered only in a computer-
based, on-demand format. The new exam is administered in two out
of every three months. For example, the new exam was offered in
April and May 2005, but not in June, and then offered again in
July and August.

In anticipation of the change in exam format and schedule, Becker
enrollments increased for the review course leading up to the
last of the old format exams. Enrollments then declined
significantly in advance of the first of the new exam format
offerings in April 2004 as some potential exam takers took the
opportunity to assess the experiences and results for the first
group of new format exam takers. For the first twelve months
following the new exam offering, the number of exam candidates
declined by more than 20% to approximately 87,100 compared to
nearly 110,000 exam candidates who took the old exam during 2003.

Although the number of exam takers and enrollments in the Becker
CPA review course have increased since last year's low point,
both the total number of CPA exam parts taken and enrollments in
the Becker review course remain below the level experienced under
the old exam format. The Company believes that this reduction in
exam takers results, in part, from the decrease in the number of
repeat exam takers who may have failed one or more parts of the
old exam and were required to retake the parts they failed.

Unlike the previous exam, which covered all four parts in a
single exam administration, a candidate may now elect to sit for
less than all four parts at one time. Because the new exam
format permits taking just one part at a time, some candidates
are electing to take only one part of the new exam at a time.
This may have the effect of reducing the number of exam parts
taken at any one time and increasing the pass rate on a part by
part basis. Taking just one part of the exam at a time extends
the period over which the Company earns the full review course
revenue.

In the spring of 2000, Becker offered a pilot version of its own
CFA review course for the Level 1 examination. In January 2001,
the Company acquired Stalla Seminars as a complement to its own
review course. Stalla is a leading provider of CFA review
courses and study materials, offering classroom seminars in
selected cities in the United States and in major financial
centers around the world. Stalla also offers CFA exam study
materials in print, on video as a supplement to its classroom-
based seminars or for use in independent study and in an online
format. Although the number of candidates seeking the Chartered
Financial Analyst professional designation has increased
significantly over the past several years, periodic employment
reductions at some financial services firms has negatively
impacted the number of exam takers in some years and may affect
them again in the future. CFA exam pass rates are currently
estimated to be in the mid-thirty percent range for the Level 1
and Level 2 exams compared to a pass rate of over 60% for the
Level 1 exam as recently as 1999. The Company believes that
declining exam pass rates may encourage more exam takers to
enroll in review courses such as those offered by the Company,
rather than just purchasing books and studying for the exam on
their own as many exam takers have done in the past.

Through its CPA and CFA review courses, Becker serves nearly
40,000 students annually.

Customized educational and training programs are offered through
the Center for Corporate Education ("CCE"). CCE helps
organizations achieve superior performance through work force
development, drawing on faculty and curriculum resources from the
DeVry University undergraduate and graduate programs.

COMPETITION
- -----------
DeVry University
----------------
The postsecondary education market is highly fragmented and
competitive with no single institution having a significant
market share. There are more than 4,000 degree granting
postsecondary education institutions in the United States.
According to the U.S. Department of Education, in the fall of
2003, approximately 16.9 million students were attending Title
IV, degree-granting institutions. Approximately 85%, or 14.4
million students were enrolled in undergraduate programs with
another 2.1 million in graduate programs. DeVry University
competes with other (1) for-profit institutions, (2) community
colleges, (3) public and private universities that serve similar
demographic segments, and (4) online education programs.

The undergraduate programs compete with traditional publicly
supported and independent two-year and four-year colleges, other
for-profit schools and alternatives to higher education, such as
employment and military service. Also, some large corporations
offer their employees accredited college courses that may be
applied toward degrees.

At the graduate level, DeVry University competes for students in
a market consisting of students seeking management skills in
business and technology, additional certification or degree
credentialing and educational formats oriented to working adults.
In every market in which DeVry University operates, there are
numerous state institutions and private, not-for-profit
universities. In addition, there is growing competition from
online programs and site-based for-profit school programs.

In each market, local community colleges and state universities
continue to provide educational alternatives to students for whom

lower tuition cost is a high priority. Also, some educational
institutions are reaching out to partner with local businesses to
expand their educational reach. In addition, although the for-
profit segment of postsecondary education has generally led the
way in online education, many traditional universities are
expanding their offerings into the online format.

There is growing competitive pressure from community colleges,
traditional universities and technical colleges that include
industry-specific certification programs, mostly aimed at the
computer information field. Proprietary and community colleges
are offering these industry-specific certification programs and
other short-term certificate programs as a pathway to the job
market for students who do not want the longer and more
expensive, but more comprehensive career preparation.

Tuition at independent not-for-profit institutions is, on
average, higher than the tuition at DeVry University. Publicly
supported colleges may offer similar programs at a lower tuition
level due to government subsidies, tax-deductible contributions
and other financial sources not available to for-profit schools.

There are more than 1,000 public and private community colleges
nationwide. Many local community colleges offer programs similar
in content to DeVry University's associate degree programs but at
a much lower tuition. While community college enrollments have
grown significantly in recent years and may be viewed as
competitors in recruiting for students, they also provide DeVry
University an opportunity to serve their graduates with
bachelor's and master's degree programs through articulation and
transfer agreements.

DeVry University believes that its competitive strengths in
undergraduate program offerings include: career-oriented
curricula developed with regular employer input that helps ensure
graduates learn skills that will be marketable to employers;
faculty with related industry experience; the demonstrated
effectiveness of its undergraduate career services in obtaining
education-related employment; national brand name recognition and
market presence; regional accreditation; authorization by various
states to grant degrees; modern facilities; well-equipped
laboratories; evening, weekend and online class schedules; and a

year-round academic calendar schedule that permits more flexible
attendance and earlier graduation. Only a limited number of
traditional colleges offer a bachelor's degree program that can
be completed in three years. This results in a significant
financial advantage to DeVry students who want to enter the work
force one year earlier than would be possible if they had
attended a traditional four-year undergraduate institution.

Undergraduate classes at DeVry University campuses are generally
offered in morning, afternoon or evening sessions which help
students maintain a part-time job. The availability of part-time
employment and government-provided financial aid partially offset
the competitive advantage of schools charging a lower tuition.
Undergraduate classes at DeVry University Centers are generally
offered in the evening for the scheduling convenience of the
predominantly working adult student although daytime class
schedules are being added in markets where there is a demand.
Each curriculum is generally consistent at all of the
undergraduate campuses, with content variations introduced to
meet local employment market needs. This common curriculum is
another competitive advantage that allows students to transfer,
if necessary, to an undergraduate campus or DeVry University
Center at a different location without interrupting their
studies.

Enhancements to improve the competitiveness of several of the
undergraduate programs, expansion of DeVry University Online and
DeVry University Centers that has added to the number of
locations, class schedules and learning formats all help DeVry
more effectively compete with educational program offerings by
other educational institutions. Some students are attracted to
DeVry University by the "mix and match" on-site and online course
formats that allow for added convenience and flexibility. This
option better serves students by effectively complementing the
student's preferred learning style and providing increased course
scheduling flexibility.

DeVry University differentiates itself in the graduate program
marketplace by stressing a practitioner approach to education,
excellence in teaching by a faculty of practicing professionals
and a high level of service to the adult student. Beginning with
fiscal 2004, graduate programs, both onsite and online, were

offered in six 8-week terms each year. Classroom-based courses
generally meet once a week, either in the evening or on Saturday.
This schedule allows students with heavy travel or other demands
on their time to fit courses into their schedules. In addition,
in most markets, there is flexibility in course scheduling, a
greater choice of elective courses and a more convenient location
than offered by its competitors. There is also an accelerated
format of the MBA program on Saturdays at some locations for
students who wish to complete their degree more quickly and
without disrupting their workweek. As the market for adult
education programs has expanded in recent years, other schools
have implemented multi-location evening and weekend programs.
However, enrollments in DeVry University's graduate programs
continue to increase, demonstrating the recognition it has earned
as an innovator in providing quality practical education.

With DeVry University campuses and centers in a growing number of
states and multiple locations within many of these states, DeVry
University offers a national system of educational offerings to
adults who may be transferred from one part of the country to
another by their employer or who capitalize upon personal career
opportunities in other locations. Additionally, with the
inclusion of all of its graduate programs and selected
undergraduate programs in a distance delivery format, DeVry
University has expanded its availability to all qualified
students without regard to their location or daily schedule. By
delivering courses both at an expanding number of sites and
online, DeVry University benefits from the competitive advantage
of enhancing student satisfaction and success with scheduling and
format flexibility.

Medical and Healthcare
----------------------
Ross University
---------------
For 2004, it is estimated that applications to U.S. medical and
veterinary medical schools aggregated over 37,000 and 6,700,
respectively. From these applicant pools, only approximately
16,000 and 2,300 students, respectively, were accepted. An
additional estimated 2,500 students are accepted to U.S.
osteopathic medical schools. Acceptance levels have remained
largely unchanged for more than two decades. The number of
medical and veterinary school applicants who were denied
admission represents a large segment of prospective students for

Ross University. However, based upon the number of Medical
College Admission Test ("MCAT") takers, which increased to almost
62,000 in 2004, up from approximately 58,500 in 2003, Ross
University believes that the potential market for medical school
students is much larger than the denied applicant pool alone.

The demand for medical education is expected to increase over the
next decade, spurred by a physician/supply demand imbalance that
is projected to grow. The capacity of U.S. medical schools has
not changed materially in over two decades. Because most
university teaching hospitals have a research focus that
adversely affects their economics of operation, causing them to
lose money, and because of budget pressures at state/federally
funded schools, there is little likelihood of any significant
expansion of capacity. Ross University believes the veterinary
medical education market is subject to many of the same forces.

Competing with Ross University in the medical education market,
in addition to the 125 U.S.-based schools of medicine, are twenty
U.S. Colleges of Osteopathic Medicine which admit approximately
2,500 students annually, and fifteen Caribbean based, U.S.
modeled medical schools with U.S. based clinical rotations.
Competing with Ross University in the veterinary education
market, in addition to the U.S.-based schools of veterinary
medicine, are two other offshore schools of veterinary medicine
with much lower enrollments.

Compared to its for-profit competitors, Ross University enjoys
several competitive advantages, including a large alumni base and
strong reputation, financial aid eligibility for its students and
the large network of diverse geographical opportunities for
clinical rotations.

Deaconess College of Nursing
----------------------------
Nursing constitutes the largest occupation in healthcare with
over 2.3 million nursing jobs. It is estimated that more new
nursing jobs will be created in the U.S. during the next decade
than in any other healthcare profession. The strong job market
for nurses has resulted in an increase in applicants to nursing
schools without a corresponding increase in educational capacity.
Competing with Deaconess in the nursing education market are more
than 700 nursing education programs leading to RN licensure. In

the St. Louis area, where Deaconess is currently located, there
are 19 other schools offering nursing programs. These include
both 4-year educational institutions and 2-year community
colleges. However, the availability of both a BSN and ASN
program plus the availability of an online program format
provides Deaconess with a competitive advantage over many of its
nursing school competitors.

Professional and Training
-------------------------
Becker competes with other methods of CPA and CFA exam
preparation, including self-study; accounting firm and
Association for Investment Management and Research sponsored
courses; courses offered by colleges and universities; and
courses offered by other private training companies. Courses
offered by colleges and private competitors generally have a
lower total course cost to help them attract students.

Becker differentiates itself from its competitors by providing
more classroom hours of instruction; extensive and constantly
updated review and practice test materials; and experienced,
qualified instructors for each of the areas of specialty included
in the exam. Becker's CPA courses undergo regular review and
revision to stay current with the latest accounting practices.
With the introduction of the new computerized exam format, Becker
further updated its review course and included practice
simulations, similar to those included in the actual exam. In
addition, Becker's CD-ROM and online courses offer a wider range
of study alternatives than other course providers. The high
success rate of students who take the Becker review course and
the numbers of students who enroll after taking other review
courses or who independently study and do not pass the CPA exam,
are testimony to the quality and value of the Becker methodology.

CPA and CFA exam candidates can also take the Becker review
course content and methodology in conjunction with their DeVry
University MBA or MAFM programs in most states in which Keller
Graduate School classes are offered, earning full graduate
academic credit. These credits can also be used to fulfill the
150 hour rule educational requirement to sit for the CPA exam in
those states where the 150 hour rule has been enacted. This
provides both Becker and DeVry University with an important
competitive advantage. To further extend the marketing and

operational benefits of joint operation, Becker offers classes at
some DeVry University undergraduate campus and center locations.

The CFA review course is taught live in a classroom setting in
selected large financial markets around the world and in an
online format to help reach potential exam takers not able to
attend the classroom course. In the CFA exam preparation market,
much like the CPA exam preparation market, Becker competes with
courses offered by local CFA Society chapters, other training
companies and student self-study.

STUDENT RECRUITING
- ------------------
DeVry University
----------------
Students are recruited by admissions representatives at on-campus
admissions offices and by field student recruiters. Field
student recruiters are an important nationwide element of the
undergraduate recruiting process because a significant portion of
potential undergraduate students live outside the immediate area
in which a DeVry University campus is located. While all
graduate school students are recruited by admissions
representatives, the percentage of undergraduate enrollment which
comes from each of these two recruiting sources varies campus by
campus, depending largely on the school's location and the size
of the local market area. Overall, admissions representatives
currently generate more than 75% of undergraduate total
enrollments. DeVry University employs more than 500
undergraduate admissions representatives and field recruiters,
not including managers and other administrative staff to support
the recruiting process, throughout the United States and Canada.

In order to recruit students in certain states and Canadian
provinces, representatives and recruiters must be licensed or
authorized by the appropriate regulatory agency. Regulations
governing student participation in U.S. federal financial
assistance programs prohibit the payment of commissions, bonuses
or incentives to student recruiters based directly on
the number of students they enroll. The Company believes that
its method of representative and recruiter compensation complies
with the current regulations.

Admissions representatives are salaried, full-time Company
employees. They are located at each undergraduate campus, and at

each DVUC teaching center. They work with potential applicants
who respond to the Company's advertising or otherwise learn of
the school. Admissions representatives generally work with older
students, many of them working adults wanting to attend class in
the evening or on weekends; recently unemployed adults seeking to
improve their job skills as a way to re-enter the workforce; and
students transferring to a DeVry University undergraduate program
from nearby community colleges. Each undergraduate campus has
entered into articulation agreements with nearby community
colleges to facilitate the enrollment of their students seeking
to transfer course credits into a DeVry University program. A
growing number of new students recently enrolled in U.S. DeVry
undergraduate programs had some prior college experience,
particularly as the number of adult students attending classes at
DeVry University Centers and online continues to grow.

Students applying to the DeVry University undergraduate online
education program are recruited primarily by admissions
representatives, either on a campus or center if the applicant
lives or works in geographic proximity, or by a central staff of
admissions representatives located at the Company's newly opened
online operations and recruiting facility and who are dedicated
to serving only online applicants. Students seeking admission to
the undergraduate online program can complete their application
process by telephone, fax and/or e-mail. In addition, some
applicants to online programs who are in areas remote from a
DeVry University location, including active military personnel
who are located on a military base, may be recruited by a field
sales representative in that territory.

Field student recruiters are salaried, full-time Company
employees. The field recruitment organization has the
responsibility of managing recruitment activity in high schools,
community colleges and military bases in its assigned geographic
territory. Field recruiters meet individually with prospective
undergraduate students who are contacted primarily through high
school, club and youth group presentations. These student
recruiters visited over 5,000 high schools, community colleges,
military bases and other locations in North America last year,
making presentations on career choices and the importance of a
college education. These presentations offer a service to
educators and career counseling staff by providing a resource for

educating students on careers in business and technology related
fields. The outcome of these presentations is the collection of
career surveys, principally from high school juniors and seniors.
These surveys provide a large and important source of leads for
student recruitment.

Field recruiters also receive student inquiries generated by
direct mail and television advertising in the particular
recruiter's territory. Follow-up interview sessions with
prospective students are generally held in the student's home
with the student and his or her parents. Recruiting
opportunities also exist for U.S. military veterans with military-
specific technical training. Veterans are attracted to DeVry's
practical career-oriented education, and the expanding number of
locations across the U.S. can often provide a DeVry University
educational program offering near the home area to which the
veteran will relocate.

Most recently, to enhance the productivity of its admissions
representatives and field recruiters, DeVry University has
increased its emphasis on local marketing and outreach,
recognizing that potential applicants in different market areas
can be better recruited by varying means and messages. Also, to
gain efficiency, certain specialized roles have been created in
both lead generation and appointment setting.

In support of its admissions representatives and field
recruiters, DeVry University advertises on television and radio,
in magazines and newspapers, on various Internet sites, and
utilizes telemarketing and direct mail to reach prospective
students. During fiscal 2005, DeVry University strengthened its
marketing programs in order to better communicate the quality of
its degree programs and the value of a DeVry education. Joining
DraftWorldwide, which has been the Company's primary advertising
agency for the past few years, are new relationships with several
other marketing and advertising agencies to improve marketing
efforts, particularly in the areas of Web site design and web
based search engine marketing. In addition, a new agency
relationship was established to focus on marketing of DeVry
University graduate programs.

Prospective students are also frequently referred by high school
career counselors, employers, alumni or currently enrolled
students. In addition to these more traditional recruiting
methods, DeVry University's own Internet site, which was recently
revamped to enhance the recruitment and application process,
provides another avenue for applicants to receive information and
complete an application for admission.

In addition to the student recruitment activities listed above,
DeVry has undertaken a number of new marketing initiatives to
expand its enrollments. Among these initiatives is the recent
partnership agreement with the Chicago Public School system to
create the DeVry Advantage Academy. This is a dual enrollment
and dual credit program that allows high school students with an
aptitude for mathematics and technology to complete their junior
and senior year coursework at DeVry's Chicago campus while also
taking college-level courses taught by DeVry University faculty.
After completing Advantage Academy, students will graduate with
both a high school diploma and an associate degree in network
systems administration. All tuition, textbooks and educational
materials are paid for by the Chicago Board of Education. This
program began in July 2004, with an initial enrollment of 128
students and has been approved for continuation in the current
year. DeVry University hopes to expand this program to other
cities in which it has undergraduate campuses.

Other outreach and recruitment initiatives offered at some of the
DeVry University campus locations include weekend SAT preparatory
classes for high school seniors, Career Reality workshops to
teach students and educators about trends in business and
industry as they relate to the career decision-making process,
free summer classes for high school students seeking to get a
head start on business and technology college credits and
fellowships for high school and community college faculty and
administrators.

Another outreach activity was DeVry University's sponsorship of
local FIRST Robotics high school teams and providing mentors and
judges for local competitions. The purpose of the competition is
to stimulate the next generation of scientists and inventors by
challenging high school students to design and build a robot that
can complete a pre-determined task. Also, in April, in

conjunction with Vivendi Universal Games, DeVry University
sponsored a video game competition at DeVry campuses to inform
prospective applicants about the many educational opportunities
at DeVry.

To be admitted to an undergraduate program in the United States,
an applicant must be either a high school graduate, have a
General Education Development ("GED") certificate or have a
degree from a DeVry University approved postsecondary
institution. Applicants for admission must be 17 years old,
interview with an admissions advisor and complete an application
for admission. In Canada, an applicant must meet either the same
criteria as in the U.S. or meet alternative "mature student"
criteria. Applicants must also meet minimum admissions and
placement examination scores which vary depending on the program
to which they are applying.

In 1996, the Computerized Placement Tests ("CPT"), which were
designed in collaboration with The College Board and Educational
Testing Service, were first used for undergraduate admissions.
These exams help serve the needs of applicants by better
assessing their achievement levels and developmental needs during
the admission process. Submission of ACT or SAT examination
scores deemed appropriate for the desired program or the
submission of acceptable grades in qualifying college-level work
completed at an approved postsecondary institution can also be
used to meet undergraduate admission requirements.

Subsequent to the completion of an application by prospective
students who will be attending a DeVry campus, the campus
maintains contact with these prospective students through phone
calls, mailings and invitations to campus run workshops or other
events to improve the rate at which such applicants begin their
program of study.

To be admitted to a graduate program, applicants must hold a
baccalaureate degree from a U.S. institution that is accredited
by or is in candidacy status with a regional accrediting agency.
International applicants must hold a degree recognized to be
equivalent to a U.S. bachelors' degree. Applicants who meet
baccalaureate degree requirements and whose undergraduate

cumulative grade point average is 2.70 or higher are eligible for
admission. Applicants with a cumulative grade point average
below 2.70 must achieve acceptable scores on either the Graduate
Management Admission Test ("GMAT"), the Graduate Record
Examination ("GRE") or an alternative admission test, designed
and validated by Educational Testing Service. All admissions
decisions are based on evaluation of a candidate's academic
credentials, entrance test scores and a personal interview.

To assist students who live beyond commuting distance to the
campus that they attend, DeVry University helps undergraduate
students secure local living arrangements. Except at its
Fremont, California, campus, DeVry University has not constructed
its own dormitory facilities. However, each campus maintains
lists of nearby available private apartments or rooms for
students' convenience. In addition, some campuses maintain
furnished apartments for shared rental by students. Students pay
their housing rental and fees to DeVry University which then
contracts with the property owner. Thus, DeVry University
becomes the students' landlord and students are assured of a
fixed rental charge per month, similar to more traditional
dormitory or apartment arrangements at other colleges.

Medical and Healthcare
----------------------
Ross University
---------------
The Ross University medical and veterinary schools focus their
marketing efforts on attracting highly qualified U.S. applicants
with the motivation and ability to complete their educational
programs and to pass the applicable licensure examinations. To
generate interest among potential students, Ross employs a
marketing program that includes a national poster campaign at
U.S. undergraduate college and university campuses, Web sites,
visits to undergraduate campuses to meet pre-med / pre-vet
advisors and prospective students, targeted direct mail
campaigns, alumni referrals, information seminars in key markets
and college newspaper advertising to build general awareness of
Ross and promote its information seminars. Nearly half of all
leads come through the Ross Web site.

Ross employs regional admissions representatives who pursue
expressions of interest by arranging for interviews, campus tours

and by assisting prospective students in the application process.
Admission requirements include a four-year undergraduate degree
with courses in biology, chemistry and math as appropriate to the
curriculum. Interviews for the medical school are conducted
principally at Ross University facilities in New Jersey and
Miami, Florida. Interviews may also be conducted at other
locations when appropriate. Interviews for the veterinary school
are conducted principally in Florida, California and New Jersey.
All admission decisions are made by the faculty Admissions
Committee at the respective schools.

To overcome declines in its medical school enrollment caused by
higher new student admission and academic progression standards,
Ross is undertaking a number of changes to its marketing and
recruiting. These changes include a new outside professional
marketing firm and changes to its own key marketing and
recruiting personnel. To further improve its recruiting results,
Ross has recently signed articulation agreements with Rowan
University, Fairleigh Dickinson University and Delaware Valley
College. Articulation agreements help provide a smoother
transition for students as they prepare to enter their medical or
veterinary degree programs.

Deaconess College of Nursing
----------------------------
To generate interest from potential students, Deaconess utilizes
varied marketing approaches. These include visits to Missouri
and Southern Illinois high schools, targeted direct mail
campaigns, alumni referrals, participation in information
seminars in key markets and participation in key area career
fairs. Deaconess holds open house events to attract local
prospective students and advertises in healthcare career
publications, in newspapers and on television and radio. In
addition, Deaconess maintains an extensive informational Web site
that generates nearly one-third of all potential applicant leads.

Deaconess employs regional admission representatives who arrange
for interviews and campus tours for applicants seeking admission.
Admission requirements include having a high school diploma or
GED with a minimum cumulative grade point average depending upon
the program in which the applicant is interested. Applicants
must pass the Deaconess standard pre-admission exam or obtain a
prescribed minimum score on the ACT exam, depending upon the

program in which the applicant is interested. Admissions
decisions are made by a faculty Admissions Committee.

Professional and Training
-------------------------
Becker markets its courses directly to potential students and to
selected employers, e.g., the large national and regional
accounting and financial services firms. Alumni referrals,
direct mail, print advertising and a network of on-campus
recruiters at colleges and universities across the country
generate the new students who take the CPA or CFA review courses.
Becker runs its CPA review program on about 70 college campuses,
recruiting students attending that college. Becker is also the
preferred provider of CPA review for several of the largest CPA
firms. The Becker Internet site provides another source of
information to interested applicants. Becker also enrolls many
students who have previously completed a competitor's course or a
self-study program but who were then unable to pass the exam.

In response to the 150 credit hour requirement to take the CPA
exam, some of the top colleges and universities have designed
their accounting programs to add a fifth year, either with a
master of accounting curriculum or in connection with their MBA
programs. In 1998, Keller introduced a graduate program, Master
of Accounting and Financial Management. The MAFM program
includes tracks for CPA and CFA candidates and culminates with
the appropriate Becker exam review course.

Becker has introduced the CPA review course on CD-ROM and online
for students who are unable to attend classroom based
instruction.

With the acquisition of Stalla Seminars, the CFA exam review
course is now offered in an expanded number of classroom
locations and online. To further expand the reach of its CFA
program review course, several investment analyst societies,
including Toronto, Washington D.C., Chicago and Hong Kong, have
adopted Stalla as their preferred, and in some cases, sole
provider of CFA test preparation courses. Also, several
prominent investment firms have been added to the Stalla client
roster, further expanding the reach and prominence of the Stalla
brand.

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

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

Keller Graduate School was first awarded its NCA accreditation
status in 1977 and DeVry Institutes was first awarded NCA
accreditation status in 1981. Until February 2002, DeVry
Institutes and Keller Graduate School were each separately
accredited by The Higher Learning Commission of the North Central
Association of Colleges and Schools ("NCA"), one of the six
regional collegiate accrediting agencies recognized by the U.S.
Department of Education. The North Central Association is the
same accrediting agency that accredits other four-year publicly
supported and independent colleges and universities in the North
Central region.

In February 2002, the Higher Learning Commission of the North
Central Association approved the merger of DeVry Institutes and
Keller Graduate School of Management into a single educational
institution with the name DeVry University.

A comprehensive evaluation visit by NCA was conducted during
August 2002. Subsequently, the Higher Learning Commission of NCA
approved a 10 year re-accreditation for DeVry University. NCA
further affirmed that DeVry University can offer, without
restriction, any of its programs on-site, online or through any
combination of the two. As a part of the re-accreditation, DeVry
University submitted an interim report to NCA in May 2004 that
included an update to the status of the implementation of the
merger of DeVry and Keller into a single entity. The Company
subsequently received notification that its report was reviewed
and accepted. This successfully completed all requirements
related to the 2002 NCA evaluation.

In addition to the NCA accreditation, the baccalaureate
Electronics Engineering Technology ("EET") programs at most U.S.
locations are accredited by the Technology Accreditation Board
for Engineering and Technology ("TAC of ABET"). The
baccalaureate Computer Engineering Technology ("CET") program at
several U.S. locations is also accredited by TAC of ABET. The
associate and baccalaureate level EET programs in North Brunswick
are TAC of ABET accredited.

DeVry campuses will apply for TAC of ABET accreditation for the
Biomedical Engineering Technology program, and additional
campuses will apply for accreditation of the Computer Engineering
Technology program when their first classes graduate from these
programs. Also, newer DeVry campus locations will apply for TAC
of ABET accreditation for their eligible programs when their
first classes graduate.

The Dallas and Atlanta DeVry undergraduate campuses have received
initial accreditation for their Health Information Technology
program from the Council on Accreditation of the American Health
Information Management Association (AHIMA). Additional DeVry
campuses are also in the process of applying for this
accreditation for their programs.

In the United States, each DeVry University location is approved
to grant associate, bachelor's or master's degrees by the
respective state in which it is located.

Until 2001, under Canadian law, the DeVry Calgary undergraduate
campus was not permitted to grant degrees. However, students
could transfer to campuses in the U.S. to complete their degree
requirements. In 1995, the Alberta Department of Advanced
Education, the State of Arizona and the Higher Learning
Commission of the North Central Association of Colleges and
Schools approved the DeVry campus in Phoenix to offer several
bachelor of science degree-completion programs on the Calgary
campus. This allowed students attending classes at the Calgary
campus to complete their degree studies without relocating to a
campus in the United States.

In 2001, the province of Alberta granted accreditation to DeVry
Calgary to offer bachelor of technology degree programs in
electronics engineering technology and computer information
systems, as well as a bachelor of business operations degree
program. DeVry Calgary became the first private, for-profit
institution in Canada to be provincially accredited to grant
baccalaureate degrees. The Computer Engineering Technology and
Information Technology curricula offered at DeVry Calgary fall
under the accreditation of DeVry Phoenix as an off-site
instructional location. The Electronics Engineering Technology
program is accredited by the Canadian Technology Board (CTAB).

Medical and Healthcare
----------------------
Ross University
---------------
The Commonwealth of Dominica authorizes Ross University School of
Medicine to confer the Doctor of Medicine degree. The medical
school has been recognized and accredited as a University and
School of Medicine by the Dominican Medical Board ("DMB"). The
National Committee on Foreign Medical Education ("NCFME") of the
U.S. Department of Education has affirmed that the DMB has
established and enforced standards of educational accreditation
that are the equivalent of those promulgated by the U.S. Liaison
Committee on Medical Education ("LCME"). In conjunction with the
change in ownership arising from the Company's acquisition of

Ross University in May 2003, the Dominica Medical Board conducted
site visits to the Dominica campus and the Miami clinical
training facility. At its discretion, DMB may conduct additional
site visits and reviews.

In addition, the states of New York, New Jersey, California and
Florida, the only four states to require separate licensure for
medical schools, have approved or found the Ross program of study
to be acceptable.

The Veterinary School has been recognized as a University and
School of Veterinary Medicine by the government of the Federation
of St. Christopher Nevis, St. Kitts and is chartered to confer
the Doctor of Veterinary Medicine degree. The Veterinary School
is American Veterinary Medical Association ("AVMA") listed and
has affiliations with 23 AVMA accredited U.S. Colleges of
Veterinary Medicine for the completion of the final three terms
of study by Ross students. Only students who graduate from an
AVMA listed school are eligible for U.S. licensure.

Deaconess College of Nursing
----------------------------
Deaconess College of Nursing is accredited by the Higher Learning
Commission of the North Central Association of Colleges and
Schools. The ASN and BSN programs are approved by the Missouri
State Board of Nursing. Both the ASN and BSN programs are
accredited by the National League for Nursing Accrediting
Commission ("NLNAC"). The BSN program is accredited by the
Commission on Collegiate Nursing Education ("CCNE").

STATE and PROVINCIAL APPROVAL and LICENSING
- -------------------------------------------
Authorizations from state or provincial licensing agencies or
ministries are required to recruit students, operate the
Company's schools and exam preparation courses, and grant
degrees. Generally, the addition of any new program of study or
new operating location also requires approval by the appropriate
licensing and regulatory agencies. Many states and provinces
require for-profit postsecondary education institutions to post
surety bonds for licensure. The Company has posted approximately
$8.8 million of surety bonds with state and local regulatory
authorities on behalf of DeVry University and an additional $0.7
million on behalf of Becker Professional Review in the U.S. and

CDN $0.3 million of surety bonds with regulatory agencies in
Canada. Certain states have set standards of financial
responsibility different from those prescribed by federal
regulation. The Company believes it is in material compliance
with state and Canadian provincial regulations. If the Company
were unable to meet the tests of financial responsibility for a
specific state, and could not otherwise demonstrate that it was
financially responsible, it could be required to cease operations
in that state. To date, the Company has successfully
demonstrated its financial responsibility where required.

TUITION and FEES
- ----------------
DeVry University
----------------
Effective with the summer 2005 term, which is the first term in
the Company's fiscal year 2006, tuition at the United States
undergraduate campuses and University Centers for two semesters
(one academic year) ranges from $11,790 to $13,060. Variations
in tuition depend on the particular location attended. Based
upon current tuition rates, for a student enrolling in the five-
term undergraduate Network Systems Administration program, total
tuition cost would range from $29,475 to $32,650. For a student
enrolled in the eight-term undergraduate Business Administration
program, total tuition cost would range from $47,160 to $52,240.
Some DeVry University programs, including the Computer
Information Systems and Electronics and Computer Technology
programs, incorporate a laptop computer at some locations as a
required element of the program and their tuition rates are,
accordingly, somewhat higher than those noted above. Students
enrolled in an online program generally pay a higher tuition
rate. Students enrolled on less than a full time basis are
charged a lower tuition, depending upon the number of credit
hours taken each semester, although the tuition cost for a
program taken totally on a part-time basis is higher than if
taken on a full-time basis. Current tuition prices are
approximately five percent higher than those previously in
effect.

Undergraduate tuition rates at DeVry University are below the
average tuition of four-year independent institutions, but are
higher than the average of four-year publicly supported
institutions. For the academic year 2004-2005, the average
annual tuition and fees at four-year private schools was reported

by the College Board to be $20,082, an increase of 6.0% from last
year.

The average annual tuition and fees at four year publicly
supported institutions increased nearly 11% from last year to
$5,132, following an increase of more than 14% in the previous
year. While tuition rates at publicly supported four-year
institutions are considerably higher for out-of-state or non-
resident students, in-state tuition rates generally remain below
those at DeVry University. Two-year publicly supported
institutions reportedly increased their tuition by 8.7% to $2,076
per year. This follows an increase in the previous year of
13.8%. Tuition rate increases at both private and publicly
supported colleges and universities during the past two years are
among the largest rate increases since the late 1980s and early
1990s.

Effective with the January 2005 term, graduate program tuition
per classroom course (four quarter credit hours) ranges from
$1,485 to $1,835, depending on the location at which the student
is enrolled. This is an increase of approximately 5.0% and
compares to tuition rates from $1,410 to $1,770 implemented in
March 2004. The price for a graduate course taken online is
$1,835 compared to $1,800 previously. A further price increase
of approximately 5.0% for both on-site and online courses will be
implemented in September 2005.

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

In addition to the tuition amounts described above, undergraduate
students at DeVry University may incur a technology fee depending
upon their program of study. Students must also purchase
textbooks and supplies as part of their educational program.

Medical and Healthcare
----------------------
Ross University
---------------
Current tuition and fees for the beginning basic sciences portion
of the programs at the Medical School and Veterinary School are
$10,900 and $11,000 per semester, respectively. These tuition
rates became effective in January 2005, and represent a 7.5%
increase from the January 2004 tuition rates. Tuition and fees
for the final clinical portion of the programs are $12,000 and
$13,750 per semester for the Medical and Veterinary schools,
respectively. These amounts do not include the cost of books,
supplies or living expenses. A further price increase of
approximately 5.3% will be implemented effective with the Ross
term that begins in September 2005.

The Company believes that the tuition charged by Ross University
is at the low end of the range of prevailing tuition rates in
private medical and veterinary schools but approximately equal to
or higher than tuition rates in publicly supported medical and
veterinary schools. Tuition rates at most medical schools and at
Ross University have increased every year and the Company
believes that tuition rates will continue to increase.

Deaconess College of Nursing
----------------------------
Tuition rates for the 2004-05 academic year for on-campus and
online programs were $426.00 and $435.00 per credit hour,
respectively. Students enrolled on a full-time basis of between
12 and 17 credit hours are charged a flat tuition amount of
$5,541 per semester. For the 2005-06 academic year, tuition is
being increased to $455.00 and $465.00 per credit hour for the on-
campus and online programs, respectively. Full-time enrollment
tuition is being increased to $5,915 per semester.

The Company believes that the tuition charged by Deaconess is at
the low end of the range of prevailing tuition rates in private
nursing schools but equal to or higher than the tuition rates in
publicly supported schools. Tuition rates at most nursing
schools have increased every year and the Company believes that
tuition rates will continue to increase.

Professional and Training
-------------------------
The price of the complete classroom Becker CPA review course is
$2,460, which includes an enrollment fee. The complete CPA

review course on CD-ROM and the complete online review course are
also priced at $2,460. Exam candidates may elect to enroll for
individual sections of the exam review course at a price of $880
per section. Discounts from these tuition rates are offered
under various enrollment promotions at college campuses and for
students employed by participating accounting firms. The current
list price for the basic onsite CFA exam course is $1,290 but is
subject to various promotional program discounts. The Company
expects to implement a price increase for this program in January
2006.

Financial Aid and Financing Student Education
- ---------------------------------------------
DeVry University
----------------
Students attending DeVry University finance their education
through a combination of family contributions, individual
resources (including earnings from full- or part-time
employment), financial aid (including Company-provided financial
aid) and tuition reimbursement from their employers.

The Company believes that more than 70% of its U.S. undergraduate
students receive some government-sponsored financial aid and that
a similar percentage of the students attending the Calgary,
Canada, DeVry campus receive some government-sponsored financial
assistance. The U.S. Education Department's National Center for
Education Statistics released a study that indicates that 63% of
undergraduate students in 2003-04 received some form of financial
aid, either from the federal government, their states, or their
colleges. A similar 1999-2000 study on student financing of
undergraduate education found a lesser percent of students
received financial aid, approximately 55%. The percentage of
students receiving financial aid varies greatly by the type of
school, ranging from 89% in private for-profit schools, like
those run by the Company, to 47% in public 2-year colleges.

DeVry develops an assistance package for students who require
financial aid on the basis of a financial aid application
completed by the student and the student's family. Government-
sponsored financial aid is of great importance to the Company.
In both fiscal 2003 and 2004, approximately 63% of the U.S.
undergraduate tuition, book and fee revenues were financed by
government-provided financial aid received by its students.

DeVry University further assists its undergraduate students in
locating part-time employment. Data from the National Center for
Education Statistics indicates that almost half of all full-time
college students between the ages of 16 and 24 are employed. The
Company believes that a greater percentage of its full-time
undergraduate students are employed to help finance the cost of
their education.

At Keller Graduate School, student utilization of government-
sponsored financial aid in the form of student loans has been
increasing for the past several years, providing almost 70% of
revenues in 2004. Additionally, the Company believes that more
than half of its graduate students receive some tuition
reimbursement assistance from their employers.

The government-provided financial aid and assistance programs in
which many of the DeVry University, Ross University and Deaconess
College of Nursing students participate are subject to political
and governmental budgetary considerations. In the United States,
the Higher Education Act ("HEA") guides the federal government's
support of postsecondary education. The Act was most recently
reauthorized in the fall of 1998, redefining and extending the
numerous financial aid programs currently in existence.
Typically, the HEA is reviewed and amended every five years.
However, other political agenda items have delayed this process.
Both the Senate and House of Representatives are holding hearings
on the next reauthorization of the Higher Education Act, but it
is not expected to be completed before the end of 2005. Even if
reauthorization continues to be delayed, current financial aid
programs are being extended as they have been in the past.
Various proposals to the reauthorization may have a favorable
impact on the amount of federal aid available in the future to
students. As reauthorization moves forward towards completion
and final approval, there may be proposals for change that could
adversely affect the amount of student financial aid available to
students. There is no assurance that federal funding will be
continued at its present level or in its present form. A
reduction in funding levels to financial aid programs could
result in lower enrollments or an increased amount of Company-
provided financial aid to its students.

Extensive and complex regulations in the United States and Canada
govern all of the government grant, loan and work study programs
in which DeVry University and its students participate.
Regulations and standards that an institution must satisfy in
order for its students to participate in federal financial
assistance programs include, among others, maximum student loan
default rates; limits on the proportion of an institution's
revenue that can be derived from federal aid programs;
prohibition of certain types of incentive payments to student
recruiters; standards of financial responsibility and
administrative capability requirements.

In 1998, the Department of Education introduced a new standard of
financial responsibility test for continued participation by an
institution's students in federal financial assistance programs.
The standard is based upon a composite score of three ratios
which are designed to measure various aspects of an educational
institution's financial stability. These ratios include an
equity ratio which measures the institution's capital resources;
a primary reserve ratio which measures an institution's ability
to fund its operations from current resources; and a net income
ratio which measures an institution's ability to operate
profitably.

In June 2004, the Company received notice from the Department of
Education that the Equity, Primary Reserve and Net Income ratios
("financial responsibility ratios") yielded a composite score of
1.4 for the year ended June 30, 2003. A minimum score of 1.5 is
necessary to fulfill the requirements of the Department's
financial standards. Effective with receipt of this notice by
the Company, the Department required DeVry University to make
financial aid disbursements under a Cash Monitoring mode. Under
this Cash Monitoring, DeVry University could not submit requests
for financial aid funds for its students in an amount greater
than the amount of the actual disbursements made to students
included in the request. DeVry University has historically
requested financial aid reimbursements in a fashion similar to
that imposed by this restriction and, therefore, cash flow was
not significantly affected. In late July 2004, in response to
its request, DeVry University received notice from the Department
of Education that the restriction to operate under Cash

Monitoring had been suspended pending submission of audited
financial statements for the fiscal year ending June 2004.
Audited financial statements were subsequently submitted as
required. The Company's calculation of its composite score at
June 2004 was confirmed by the Department of Education to be
above the required minimum of 1.5. The Company calculated its
composite score at June 30, 2005, and determined that it is above
the required minimum of 1.5.

The Company believes that it has demonstrated the required level
of financial stability and will be able to continue to do so.
Failure to achieve these financial responsibility standards or
otherwise demonstrate, within the regulations, its ability to
continue to provide the educational services it offers could
result in the Company being required to post a letter of credit
to permit its students to continue to participate in federal
financial assistance programs. In addition to the regulations
and standards which must be met by the institution, student
recipients of financial aid must maintain satisfactory academic
progress toward completion of their program of study and an
appropriate grade point average.

Institutions that participate in U.S. federal financial aid
programs must disclose information about undergraduate student
completion rates to current and prospective students. The
federal Student-Right-To-Know Act defines the cohort of students
on which the institution must report as "first-time, full-time
degree-seeking" students. At DeVry University, undergraduate
admission requirements have been changed and student support
services have been added, both aimed at improving student
completion rates. For the summer and fall 1998 freshman student
cohorts (the latest period for which final completion statistics
are available), the graduation rate for the DeVry U.S.
undergraduate campuses remained unchanged from the prior year but
did improve from the rates in the previous several years. The
Company is currently compiling its completion statistics for
1999. Completion rates, as defined by the Student-Right-To-Know
Act at each of the U.S. undergraduate campuses, generally fall
within the range of completion rates at selected four-year urban
public colleges in the areas in which these campuses are located.
Many students who previously attended another college are

admitted to DeVry's undergraduate programs, particularly at its
University Centers and in its online programs, but are not
included in these completion rate statistics. Completion rates
for undergraduate students entering with previous college
experience are generally higher than for first-time students.

DeVry University maintains a staff at its Oakbrook Terrace
headquarters to review, interpret and establish procedures for
compliance with regulations governing financial assistance
programs and process financial aid applications from its
students. Because financial assistance programs are required to
be administered in accordance with the standard of care and
diligence of a fiduciary, any regulatory violation could be the
basis for disciplinary action, including the initiation of a
suspension, limitation or termination proceeding. Changes in or
new interpretations of applicable laws, rules or regulations
could have an adverse effect in the future.

In the United States, DeVry University has completed and
submitted all required audits of compliance with federal
financial assistance programs for fiscal 2004. The Company's
independent public accountants are currently conducting the
required audits of the one-year period ending June 30, 2005. In
conjunction with previously filed audit reports on the processing
of financial aid on behalf of its student's participation in
federal financial aid programs, DeVry University has been
required to post letters of credit, generally of one year
duration. Currently there are approximately $3.1 million in
letters of credit outstanding. This compares to $1.4 million in
letters of credit outstanding last year. The increase in
outstanding letters of credit relates to an increase in audit
findings of untimely refunds of financial aid as required by
student financial aid program regulations.

The Department of Education may periodically conduct site visits
at any of the Company's locations as a part of its program of
periodic review of the administration of student financial
assistance programs. Such program reviews may be conducted at
any educational institution at any time and have been conducted
in the past at several DeVry University campuses. Previous
Department of Education program reviews have not resulted in

material findings or adjustments. Although the Company has no
reason to believe that any proceeding against the Company is
presently contemplated, if such a proceeding were initiated
against the Company and resulted in a substantial curtailment of
DeVry University's participation in government grant or loan
programs, the Company could be adversely affected.

In January 2003, the New York State Comptroller's Office began an
audit of DeVry University New York's compliance with the New York
State Tuition Assistance Program Grant ("TAP") requirements for
the three-year period ending June 2002. Fieldwork was completed
in June 2003, and a preliminary report was issued in July. The
Company responded to the preliminary report, disagreeing with
some of the findings in the report. Subsequently, the Company
received an amended report and responded again. In the first
quarter of fiscal 2005, the Company received the final report and
determination of disallowance of some of the funds disbursed that
resulted in financial liability to the Company. The final
liability amount was not material relative to the total amount of
financial aid disbursed under the New York program and was
approximately equal to the amount the Company had previously
estimated and accrued. The Company has remitted the required
claim of disallowance, and the matter is now closed.

In conjunction with the required annual review procedures related
to the Toronto-area campuses' administration of financial aid
programs under the Ontario Student Aid Program, these campuses
engaged in discussions with the Ontario Ministry of Education
relating to certain additional information requirements for the
2001 and 2002 financial aid years. These additional information
requirements could then be used as the basis for a Ministry claim
for the return of some amounts of financial aid disbursed to
students attending these campuses. The Company's Toronto-area
campus has not accepted new student admissions since 2003 and
discontinued all operations. Students enrolled at that campus
completed their education under an agreement with the RCC College
of Technology as previously announced. Accordingly, the Company
is no longer participating in these financial aid programs.
Final discussions with the Ministry resulted in a resolution of
all claims for an amount of less than CDN$80,000 which had been
previously accrued.

In connection with the Company's actions in the Denver-area
market to operate as a part of DeVry University, the Company
discontinued the original Denver Technical College educational
programs and its separate eligibility for student financial aid.
As required, the Company completed and submitted a final audit of
its participation in these financial aid programs. Approximately
$430,000 of remaining financial aid funds were identified as a
part of this audit as needing to be returned to the appropriate
federal and state funding sources. Amounts owed have been
returned. This settles all of the Company's remaining liability
under these programs. The Company had previously estimated and
accrued for this liability.

In the spring of 2004, the Company received a complaint from a
student at its Alpharetta, Georgia, DeVry undergraduate campus
that an admissions advisor had entered incorrect financial
information into the student's application for financial aid.
Upon review by the Company, it was determined that financial
information entered for this student and several other students
was incorrect. The Company promptly notified the U.S. Department
of Education of its review and findings as required by federal
regulation and terminated several employees for violation of
Company policies. The Company's internal controls prevented any
student from receiving an incorrect disbursement. The Chicago
office of the Inspector General acknowledged that the Company
should continue its internal review and report any further
findings within six months. The Company has completed its review
and determined that no further action is necessary.

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

United States Government Financial Aid Programs The following
U.S. Department of Education financial aid programs under Title
IV of the Higher Education Act are utilized by DeVry University
students in the United States: (1) Federal Pell Grant ("Pell"),
(2) Federal Supplemental Educational Opportunity Grant ("SEOG"),
(3) Federal Family Education Loan Program ("FFELP"), (4) William
D. Ford Federal Direct Student Loan Program ("FDSL"), (5) Federal
Perkins Direct Student Loan program ("Perkins") and (6) Federal
Work Study ("FWS").

Grants These funds, made available by the government to all
eligible students who demonstrate financial need, do not
have to be repaid. Only undergraduate students are eligible
to participate in the Pell and SEOG Grant programs.
Eligible students could receive a Pell grant ranging in
amount from $400 to $4,050 for the 2004-2005 year. For the
2005-2006 year, the maximum Pell grant remains unchanged.
Increases in Pell grant limits have historically lagged
behind the rate of tuition increases.

SEOG is a supplement to the Pell grant, available to only
the neediest undergraduate students because SEOG funds are
limited in amount at each institution based upon a federally-
determined formula. The maximum SEOG award is $4,000 per
academic year. In addition to these federal assistance
funds, DeVry University is required to make a 25%
institutional matching contribution of all federal SEOG
funds. The institutional matching contribution may be
satisfied, in whole or in part, by DeVry scholarship funds,
discussed separately in this section, or by externally
provided scholarship grants.

Loans Students at DeVry University participate in the
Stafford and PLUS programs within the FFELP and FDSL program
and in the Perkins loan program. Under the FDSL program,
students or parents borrow directly from the Department of
Education, rather than from commercial lenders, under terms
that are generally the same as for loans under the FFELP.

STAFFORD LOANS A subsidized Stafford loan, awarded on
the basis of student financial need, is a low interest
loan with interest charges and principal repayment not
scheduled to begin until six months after a student no
longer attends school on at least a half-time basis.
Loan limits per academic year range from $2,625 for
dependent students in their first academic year to
$5,500 for students in their third or higher academic
year, increasing to $8,500 per academic year for
graduate students. An unsubsidized Stafford loan may
be awarded to students who do not meet the needs test.
This loan incurs interest charges from the time the
loan is disbursed; however, the interest payment may be

deferred until the principal payments begin.
Unsubsidized loan limits per academic year range from
$4,000 for students in their first academic year to
$5,000 or $6,000 in higher academic years, depending
upon the student's financial status determination as
dependent or independent, increasing to $10,000 per
academic year for graduate and professional program
students. Both the subsidized and unsubsidized loans
are available to undergraduate and graduate students.

PLUS LOANS A PLUS loan enables parents of a dependant
student to borrow for the cost of their children's
education. These loans are not based on financial
need, they are not subsidized and interest charges and
repayment begin following receipt of the loan.

PERKINS LOANS A Perkins loan is a low interest loan
available to only those undergraduate students who
demonstrate exceptional financial need. Perkins loans
are available up to a maximum of $4,000 per academic
year. Funding for this program is provided, in part,
by the Department of Education and, in part, by the
participating institution. As loans are repaid, the
principal and interest from these repayments is
returned to the pool of funds available for future
loans to students at that institution. New funding
from the Department of Education has been very limited
in amount for the past several years and there is no
certainty that new funding for this program will be
continued.

More than 65% or more of the financial aid received by DeVry
University undergraduate students and 100% of the federal
financial aid received by its graduate students has been
provided by federal student loans.

Work Study Work opportunities, both on or off-campus, under
FWS are offered on a part-time basis to undergraduate
students who demonstrate financial need. Work Study wages
are paid partly from federal funds and partly from qualified
employer funds.

State Financial Aid Programs In addition to the various federal
loan and grant programs, state grant and loan assistance may be
received by eligible students attending DeVry University
undergraduate campuses in Arizona, California, Colorado, Florida,
Georgia, Illinois, Missouri, New Jersey, New York, Ohio and
Pennsylvania.

"90/10 Rule" This U.S. Department of Education regulation
affects only for-profit postsecondary institutions, such as DeVry
University. Under this regulation, students attending a for-
profit institution that derives more than 90% of its revenues
from federal financial assistance programs in any year are not
able to participate in these programs for the following year.
This regulation is commonly referred to as the "90/10 rule."
Prior to 1999, the rule permitted 85% of revenues to be collected
from federal financial assistance programs. When the limit was
increased to 90%, the definition of revenues was modified to
exclude revenue funded by institutional scholarships. Final data
for fiscal 2005 are not yet complete but, in fiscal 2004, the
DeVry U.S. undergraduate campus system derived approximately 63%
of its revenues from these programs. These defined financial aid
programs provided approximately 70% of revenues from students
enrolled in graduate programs.

In addition to the various financial aid programs described
above, there are a number of tax favored programs aimed at
promoting savings for future college expenses. These include
state sponsored "529" college savings plans, state sponsored
prepaid tuition plans, education savings accounts (formerly known
as education IRAs), custodial accounts for minors, Hope and
Lifetime Learning credits and student loan interest tax
deductions.

Canadian Government Financial Aid Programs Canadian
undergraduate students, other than students from Quebec, are
eligible for loans under the Canada Student Loan Plan, which is
financed by the Canadian government but administered at the
provincial level. Canadian Student Loans are available to DeVry
students who are Canadian citizens or permanent residents of
Canada. The loans are interest-free while the student is in
school, and repayment begins six months after the student leaves
school. Canada Study Grants for students whose financial needs

and special circumstances cannot otherwise be met, tax-free
withdrawals from retirement savings plans, tax-free education
savings plans, loan repayment extensions and interest relief on
loans are also available to qualified applicants to help finance
their education.

Company-Provided Financial Assistance The Company's EDUCARD Plan
is available to undergraduate students attending its educational
programs in the U.S. Similar installment payment options are
available at the Calgary, Canada campus. The EDUCARD Plan is an
installment loan program designed to assist students who are
unable to completely cover educational costs with student and
family contributions, federal and state grants and loans. The
installment loan feature of the EDUCARD Plan is available to a
student only after other student financial assistance has been
applied toward the payment of tuition, books and fees and is
available only for those purposes. Repayment of EDUCARD Plan
balances is negotiated in accordance with the financial
circumstances of the particular student, but most typically is a
monthly repayment plan with all balances required to be paid
within 12-24 months following a student's graduation or
termination of study. The receivable balance related to DeVry
University's EDUCARD Plan for its U.S. undergraduate students at
June 30, 2005, was approximately $44.5 million, compared to
approximately $28.0 million last year. The Company believes that
the principal factors leading to the increase in accounts
receivable are higher tuition rates with no commensurate increase
in the amount of available student financial aid, extended
monthly payment plans to better serve the growing number of
military and adult students at DeVry and an increased proportion
of part-time students who have less financial aid eligibility
than do full-time students. Also, the shorter eight-week
sessions at DeVry University Centers and online has produced a
slower collection of receivables as administrative systems and
staff adjust to the new and shorter collection cycle. Amounts
owed by students under the EDUCARD Plan are subject to a monthly
interest charge of one percent of the average outstanding
balance.

In September 2000, several undergraduate campuses began offering
a supplementary loan program with funding from private lenders.
This new program was aimed at students whose eligibility for

federal and state funded financial aid is not sufficient to cover
all their costs of education. This program, with a limited DeVry
University risk sharing for loan defaults, has longer repayment
periods, lower monthly payments and generally lower interest
rates on borrowings than offered by the EDUCARD Plan, and is
intended as an alternative to the current EDUCARD program. This
program has now been expanded to all DeVry University campuses.

In addition to the student financial assistance provided by the
EDUCARD Plan, numerous scholarships are offered to DeVry
University undergraduate students. Scholarship programs are
generally aimed at recent high school graduates and students
enrolled at community colleges with awards that range from $1,000
per term up to the amount of full tuition. Scholarship programs
were offered in previous years and are expected to be offered in
the future to help attract students. DeVry University has also
provided funds in the form of institutional grants which help
those students most in need of financial assistance.

Keller Graduate students who wish to defer tuition payment may
choose from several deferred payment plans, and students eligible
for tuition reimbursement plans may have their tuition billed
directly to their employer.

The U.S. Congress has, from time to time, provided various tax
benefits related to educational expenses incurred by graduate and
undergraduate students. Educational expenses paid by an employer
on behalf of an employee generally are excludable from the
employee's income if provided under a qualified educational
assistance plan. At present, the maximum annual exclusion is
$5,250.

Medical and Healthcare
----------------------
Ross University
---------------
Eligible students attending the Ross University School of
Medicine and the School of Veterinary Medicine can receive
federal financial aid in the form of student loans. Loan limits
are $18,500 per academic year with a $138,500 aggregate borrowing
limit that includes Stafford Loan amounts borrowed as an
undergraduate. Of the $18,500 in academic year borrowings, no
more than $8,500 may be in subsidized loans with the balance in
unsubsidized loans. In addition to student loans under Title IV

regulations, many Ross students borrow additional amounts under
private loan programs to pay the portion of their tuition that
exceeds federal loan limits and also to help pay for living
expenses while they are in school. Ross University offers a
limited number of full tuition scholarships to students who meet
the necessary qualifications.

Deaconess College of Nursing
----------------------------
Approximately 70% of students attending Deaconess College of
Nursing receive some form of financial assistance. Deaconess
students are eligible for most of the same financial aid programs
available to students attending DeVry University. These
programs, which have been previously described, include Federal
Pell Grants, Federal Supplemental Educational Grants, Federal
Work Study, Federal Stafford Loans and Federal PLUS loans.

Professional and Training
-------------------------
Students attending the Becker CPA or CFA review courses are not
eligible for federal or state financial aid, but many of them
receive partial or full tuition reimbursement from their
employers.

STUDENT LOAN DEFAULTS
- ---------------------
DeVry University
----------------
For a variety of reasons, high student loan default rates on
federal student loans are most often found in proprietary
institutions, institutions having large minority student
populations and community colleges, all of which tend to have a
higher percentage of low income students enrolled than do four-
year publicly supported and independent colleges and
universities. In 1989, the U.S. Department of Education
instituted strict regulations that penalize educational
institutions whose students have high loan default rates. These
regulations were further tightened by the 1992 Higher Education
Reauthorization Act. Any individual institution with a FFELP or
FDSL cohort default rate exceeding 20% for the year is required
to develop a default management plan in order to reduce defaults,
although the institution's operations and its students' ability
to utilize student loans are not restricted. Any individual
institution with a FFELP or FDSL cohort default rate of 25% or
more for three consecutive years is ineligible for participation
in these loan programs and cannot offer student loans

administered by the U.S. Department of Education for the fiscal
year in which the ineligibility determination is made and for the
two succeeding fiscal years. In addition, students attending an
institution whose cohort default rate has exceeded 25% for three
consecutive years will be ineligible for Pell grants. Any
institution with a FFELP or FDSL cohort default rate of 40% or
more in any year is subject to immediate limitation, suspension
or termination proceedings from all federal aid programs. DeVry
University has never had a FFELP cohort default rate of 25% or
more for three consecutive years nor a cohort default rate of 40%
or more in any one year.

DeVry University carefully monitors its students' loan default
rate. To help reduce student loan default rates, the Department
of Education requires that all educational institutions wait 30
days before disbursing funds to first-time, first-year
undergraduates to prevent potential early-term dropouts from
defaulting on their loans. Students who leave school in the
early part of their educational program typically default on
their loans at a higher rate than do students who remain and
complete the program. Another significant factor in controlling
student loan default rates is the servicing and collection
efforts by lenders and loan guaranty agencies. DeVry University
assists the efforts of these lenders and agencies by contacting
its students who are delinquent in their loan repayments and
advising them of their responsibilities and rights to deferments
or collection forbearance if they are eligible.

According to the U.S. Department of Education, the final default
rate for all colleges and universities eligible for federal
financial aid has been in the five to six percent range in the
past several years. DeVry University had a FFELP U.S. student
loan cohort default rate for 2002 of approximately 7.1%. This
compares to a weighted system average of 7.6% for 2001 and 8.7%
for the year 2000. The reported rates for 2002 reflect the
proportion of former students who were due to begin repaying
their loans during that year but who were in default by the end
of 2003. Default rates for 2003 have not yet been released.
DeVry University is not subject to any restriction or termination
under any student loan program.

Undergraduate students who attend the U.S. DeVry campuses also
participate in the Federal Perkins loan program. The program is
administered entirely by the institution, including the
responsibility for collection of outstanding loans. Any
institution with a Perkins loan cohort default rate exceeding 15%
must establish a default reduction plan. Any institution with a
Perkins loan cohort default rate between 20-30% will receive a
reduced annual federal contribution to the program. If the
Perkins loan cohort default rate exceeds 30%, the institution
will not receive any new federal contribution to the program.
However, new loans to eligible students may continue to be made
from the pool of funds created by monthly repayments on previous
loans.

For fiscal 2004 (the latest year for which data is available),
2003 and 2002 the DeVry University Perkins loan cohort default
rates were approximately 8.5%, 11.7% and 13.8%, respectively.
Student counseling and additional collection efforts, including
the assistance of outside loan service agencies, have been
implemented and have, in part, contributed to the reduction in
the default rate. Because of the relatively small amounts of new
funding available for this program relative to other available
financial aid programs, even with the addition of funds available
for new loans from the repayment of outstanding loans, this
program is not a material source of financial aid to DeVry
University undergraduate students.

Medical and Healthcare
----------------------
Ross University
---------------
Default rates under Title IV loans for 2002 were 1.3% and 0.7%
for the medical and veterinary schools, respectively. For the
previous year, 2001, the default rates were 1.1% and 0.0% for the
medical school and veterinary school, respectively. Default rates
for 2003 have not yet been released.

Deaconess College of Nursing
----------------------------
Default rates under Title IV loans for 2002 and 2001 were 2.2%
and 2.0%, respectively. Default rates for 2003 have not yet been
released.

CAREER SERVICES
- ---------------
DeVry University believes that the employment of its graduates is
essential to its ability to attract and retain students. Career
services professionals located at the DeVry undergraduate
campuses work with students in the areas of career choice
activity, resume preparation and job interviewing. The staff
also maintains contact with local and national employers to
determine job opportunities and arrange interviews. In many
cases, company hiring representatives conduct interviews at a
campus.

The need for skilled employees has placed an increased premium on
educated workers in our economy as evidenced by the widening gap
in wages of college vs. high-school graduates. In 2000, the
median income of U.S. employees with a bachelor's degree was
approximately $50,000, more than 60% higher than the median
income for those with only a high school education. It is
estimated that 85% of the jobs in the United States currently
require education or training beyond high school, up from only
65% as recently as 1991.

DeVry University attempts to gather accurate data on the number
of its undergraduates employed in positions related to their
program of study within six months following graduation. To a
large extent, the reliability of such data is dependent on the
quality of information that graduates report to DeVry University.
In the U.S., there were more than 58,000 graduates over the ten-
year period ending October 2004, who were eligible for career
services assistance (i.e. excluding graduates who continued their
education, students from foreign countries not legally eligible
to work in the U.S. and other similar categories of students who
were not available for employment.). Of the more than 50,000
graduates during this ten-year period who actively pursued
employment or were already employed, nearly 91% held positions
related to their program of study within six months of
graduation.

For the three undergraduate classes that ended in calendar year
2004, there were 7,538 net graduates (excluding students
continuing their education, students from foreign countries
legally ineligible to work in the U.S. or ineligible for
employment because of extreme circumstances), from undergraduate

degree and diploma programs in the U.S., excluding the one-year
post-baccalaureate Information Technology program. From the
7,538 net graduates, 5,744 actively pursued employment or were
already employed. Of those 5,744 net graduates actively seeking
or already employed, 4,865, or 84.7%, were employed in positions
related to their program of study within six months of
graduation. This compares to 83.4% who were employed in
positions related to their program of study for the three classes
that ended in calendar year 2003 and 82.3% who were employed in
positions related to their program of study for the three classes
that ended in calendar year 2002.

The Company believes that a significant number of graduating
students currently employed in positions not directly related to
their program of study have chosen to not actively seek other
employment opportunities. For the three graduating classes in
calendar year 2004, there were approximately 965 graduates who
were employed but not in positions related to their program of
study. Of these graduates, about 79% chose not to seek other
employment through the Company's career services office.

The 2004 graduates achieved average annual starting compensation
that varies by program of study, ranging from $31,764 to $44,482.
Individual compensation levels vary depending upon the graduate's
previous employment experience, program of study and geographic
area of employment.

In Canada, for the three classes which ended in calendar year
2004, over 87% of graduates who actively pursued employment had
obtained employment or were already employed in positions related
to their program of study within six months of graduation. This
includes those students who received diplomas, who received
bachelor's degrees through the DeVry University Phoenix degree
completion program in Calgary or a bachelor's degree awarded
under the authority of the Government of Alberta and those
students who completed their degree requirements at a U.S. DeVry
campus, but does not include graduates of the one year
Information Technology program. At the Canadian undergraduate
campuses, there were more than 4,400 graduates over the past
decade. For the ten-year period ending October 2004, more than
82% of those graduates who actively pursued employment or who

were already employed when they graduated held positions related
to their program of study within six months of graduation.

The majority of employers of the DeVry University graduates are
in the electronics or information processing industries. The
Company believes that no single employer has hired more than five
percent of its graduates in recent years. Major employers of the
DeVry University undergraduates include the following companies:
Accenture, Applied Materials, AT&T, Cellular One, Eastman Kodak,
EDS, General Electric Company, Hewlett-Packard, IBM, Intel Corp,
MCI, Motorola and Xerox.

DeVry University considers its career services commitment an
important element of its service to students. Based upon
suggestions and recommendations from current graduates, alumni
and staff, the career services function is being restructured so
that all career services, whether for an undergraduate, graduate,
current or former student, are delivered through a single, more
locally based organization versus a single centralized
organization. A new national database is being created to
further assist graduates, allowing them to view, apply for and
interact with job leads appropriate to their experience and
education level.

SEASONALITY
- -----------
The Company's business is somewhat seasonal. Highest enrollment
and revenues at DeVry University, Ross University and Deaconess
College of Nursing typically occur during the fall back-to-school
period, which corresponds to the second and third quarters of the
Company's fiscal year. Slightly lower enrollment occurs in the
spring, and the lowest enrollment generally occurs during the
summer months. In the Professional and Training Segment, Becker
Professional Review had historically experienced higher
enrollments for its courses beginning in July, the period leading
to the fall CPA exam, than for its classes beginning in January,
the period leading to the spring CPA exam. However, with the
introduction of the new on-demand exam format, the Company
believes that the seasonal pattern will be much less pronounced.

Results of operations reflect both this seasonal enrollment
pattern and the pattern of student recruiting activity costs that
precede the start of every term. Revenue, income before interest

and taxes and net income by quarter for each of the past two
fiscal years are included in Note 13 to the Company's
Consolidated Financial Statements, "Quarterly Financial Data."

ADMINISTRATION and EMPLOYEES
- ----------------------------
The Company has approximately 4,800 regular full- and part-time
employees including employees at Becker Professional Review, Ross
University and Deaconess College of Nursing. Over 600 of these
employees work at the corporate headquarters in Oakbrook Terrace,
Illinois, and its newly opened nearby online offices. In
addition, the Company employs more than 900 of its students at
campuses during peak periods as faculty assistants and in other
part-time positions. None of the Company's employees is
represented by a union except for approximately 170
administrative and support employees of Ross University's medical
school on Dominica. These employees are covered by a collective
bargaining agreement with a local union. The Company believes
that its relationship with its employees is satisfactory.

DeVry University
----------------
Each DeVry undergraduate campus is managed by a president or
campus dean and has a staff of academic deans, faculty and
academic support staff, career service and student service
personnel and other professionals. Each campus also has an
admissions director who reports to a central organization
responsible for new student recruiting. Each DeVry University
Center is managed by a center director and has admissions
representatives and appropriate academic and administrative
support staff. Regional vice presidents provide further
oversight to the operations of campuses and centers in
geographically defined areas.

The faculty and staff at each DeVry University location are
supported by a broad range of services provided by staff at the
Company's corporate headquarters in Oakbrook Terrace, Illinois.
Among the centrally provided support services are curriculum
development, academic management, licensing and accreditation,
marketing and sales management, computer services, financial aid
processing, regulatory compliance, tax, payroll, finance and
accounting.

Medical and Healthcare
----------------------
Ross University
---------------
Both the Ross University School of Medicine and School of
Veterinary Medicine are managed by a dean with appropriate
department chairs to oversee the educational operations. In
addition, each campus has student services staff to assist
students with financial aid, housing and other student related
matters. The campuses are supported by a central administrative
staff located in Edison, New Jersey.

Deaconess College of Nursing
----------------------------
Deaconess College of Nursing is organized in a fashion similar to
that of a DeVry University campus. A school president is
supported by program chairs to oversee educational operations and
programs. Student services staff is available to assist campus
and online students with admissions, student financial aid,
housing and other aspects of student life. Administration of the
Deaconess online program offerings is supported, in part, by
staff at DeVry University.

Professional and Training
-------------------------
Becker Professional Review is managed by a central administrative
staff headquartered in Oakbrook Terrace that supports instructors
and coordinates local operations. Certain local operations
management, as well as some other functions such as curriculum
development, are located in smaller regional offices.

Faculty
- -------
DeVry University
----------------
Each DeVry undergraduate campus president hires academic deans
and faculty members in accordance with criteria established by
the Company, accrediting standards and applicable state law.
Most faculty members teaching in technical areas have related
industry experience. Sabbatical and other leave programs have
been initiated to allow faculty to engage in developmental
projects or consulting opportunities to maintain and enhance
their currency and teaching skills.

Faculty members are periodically evaluated based on student
comments and observations by an academic dean. There are
approximately 1,100 full and part-time faculty member employees
among all of the DeVry undergraduate teaching locations. More

than 85% of DeVry full-time undergraduate faculty member
employees hold advanced academic degrees. In addition, DeVry
engages adjunct and visiting faculty, as needed, and mostly in
the evening programs and at DeVry University Online, who teach on
a part-time basis while maintaining employment in their technical
field or specialty.

Graduate program faculty members are practicing business
professionals who are engaged to teach on a course-by-course
basis. A multi-session training course is used to train and
develop new faculty throughout Keller's national system. Over
the past several years, graduate school courses have been taught
selectively utilizing full-time faculty to respond to student
demand in areas of rapidly growing enrollment and to meet
licensing approval requirements in certain states. Less than 10%
of graduate instructors, excluding non-faculty Company employees
who teach courses on an occasional basis, are employed on a full-
time basis.

DeVry University faculty are not tenured. They have teaching
schedules that may include both day and evening classes, either
on a campus or DeVry University Center or online. Additionally,
some faculty may teach both graduate and undergraduate courses,
depending upon their qualifications and the need for faculty at
specific locations or for specific courses.

Medical and Healthcare
----------------------
Ross University
---------------
Ross University has approximately 500 employees, 100 of which are
at its New Jersey administrative office location. The medical
school employs approximately 65 full-time faculty who teach the
basic science program. Full-time faculty members have a Ph.D. or
an M.D. degree. Full-time faculty are supplemented by visiting
or part-time faculty engaged to lecture on very specialized or
emerging subject matter.

The veterinary school employs approximately 50 full-time faculty
who teach the basic science pre-clinical portion of the program.
Faculty members have either a Ph.D. or D.V.M. degree.

Faculty members are not tenured, but each faculty member
generally has an employment agreement of one to three years in
length.

Deaconess College of Nursing
----------------------------
Deaconess College of Nursing has approximately 35 employees.
Included in this total are 11 full-time faculty. In addition,
there are more than 15 part-time faculty who are employed on a
per course basis that assist in teaching courses in the nursing
curriculum. All faculty have a Master's of Science in Nursing
and several have a Ph.D. degree. Faculty members are not
tenured. Certain general education courses in the nursing
program are taught, under the terms of an agreement, by the
faculty at a nearby university.

Professional and Training
-------------------------
Becker's faculty are primarily practicing professionals who teach
the review courses on a part-time, course-by-course basis as
required.

TRADEMARKS and SERVICE MARKS
- ----------------------------
The Company owns and uses numerous trademarks and service marks
including "DeVry", "DeVry University", "Becker Professional
Review", "Ross University" and variants thereof. All trademarks,
service marks and copyright registrations associated with the
Company's businesses are registered in the name of the Company or
one of its subsidiaries and expire over various periods of time.
The Company vigorously defends against infringements of its
trademarks, service marks and copyrights.

ADDITIONAL INFORMATION
- ----------------------
The Company's Web site is at the following Internet address:
http://www.devryinc.com.

We make available free of charge through our Web site, the
Company's annual report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and all amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act (15 U.S.C. 78M(a) or 78o(d)) as soon
as reasonably practicable after we electronically file such
material with, or furnish such material to, the SEC.

Additionally, the Company's Web site also includes copies of the
following:
DeVry Corporate Governance Principles
Policy for Shareholder Communication with Directors
Director Nominating Process
Code of Business Conduct and Ethics
Academic Committee Charter
Audit Committee Charter
Compensation Committee Charter
Finance Committee Charter
Governance Committee Charter

Information contained on the Company's Web site is not
incorporated by reference into this report.

Copies of the Company's filings with the SEC and the above listed
policies and charters may also be obtained by written request to
the Director of Investor Relations at the Company's executive
offices.

ITEM 2 - PROPERTIES
- --------------------

DEVRY UNIVERSITY
- ----------------
DeVry University undergraduate campuses are large and modern
buildings located in suburban communities or urban neighborhoods.
They are easily accessible to major thoroughfares, have available
parking areas, and many are served by public transportation.
Each campus includes teaching facilities, admissions and
administrative offices. Teaching facilities include classrooms,
laboratories, libraries, bookstores and student lounges.
Laboratories include PC's and various telecommunication,
electronic and biomedical equipment necessary to provide an
appropriate environment for students' development of the required
technical skills for their programs of study. Computer
laboratories include both stand-alone and networked PC-compatible
workstations that support all curricular areas with numerous
software packages supporting a variety of business, engineering
and scientific applications. Connections to the Internet and
World Wide Web are included through the computer laboratories as
a part of the program curriculum.

None of the DeVry University campuses that are owned by the
Company is subject to a mortgage or other indebtedness.

In Pomona, California; and Kansas City, Missouri; the Company
currently leases additional space in adjacent office buildings in
order to house selected administrative functions, permitting more
space within the campus building to be used for classrooms and
laboratories. Previously, the Company had also leased additional
space in office buildings adjacent to its Phoenix and North
Brunswick campuses.

In March 2002, the Company announced that it signed a lease for
the construction of a 72,000 square-foot campus in Westminster
(Denver), Colorado. Classes were offered in this facility for
the first time in March 2003. This facility replaces the smaller
facility acquired in 1999 with the Company's acquisition of
Denver Technical College. The original facility is no longer
essential to the Company's operations in the Denver-area and is
being offered for sale.

In the Toronto-area, the Company's teachout agreement with RCC
College of Technology is completed, and the Company has
surrendered its lease, effective June 30, 2005, to its landlord
of the Mississauga, Ontario campus.

In Fremont, California, the Company completed construction of an
84,000 square foot dormitory adjacent to its campus. This
dormitory began housing students in July 2005, the start of the
summer semester. Capacity of this dormitory is approximately 300
students.

The table below sets forth certain information regarding the
large campus properties at which DeVry University programs were
conducted at June 30, 2005:

UNDERGRADUATE CAMPUSES
----------------------

June 2005

Area
(Approximate
Square Feet) Ownership
------------ ---------
Phoenix, Arizona 120,000 Owned
Westminster (Denver), Colorado 72,000 Leased
Orlando, Florida 72,000 Leased
Miramar, Florida 99,000 Leased
Alpharetta (Atlanta), Georgia 65,000 Leased
Decatur (Atlanta), Georgia 108,000 Owned
Chicago, Illinois 156,000 Owned
Addison (Chicago), Illinois 113,000 Owned
Tinley Park (Chicago), Illinois 70,000 Owned
Kansas City, Missouri 75,000 Owned
North Brunswick, New Jersey 99,000 Owned
Long Island City, New York 155,000 Leased
Columbus, Ohio 114,000 Owned
Fort Washington, Pennsylvania 105,000 Leased
North Irving (Dallas), Texas 95,000 Leased
Houston, Texas 101,000 Owned
Pomona (Los Angeles), California 100,500 Owned
Long Beach (Los Angeles), California 98,000 Leased
West Hills, (Los Angeles),
California 108,000 Owned
Fremont (San Francisco),
California 99,000 Owned
Arlington (Washington, D.C.) Virginia 86,000 Leased
Federal Way (Seattle), Washington 102,000 Owned
Calgary, Alberta, Canada 70,000 Leased

In addition to the undergraduate programs that are taught at
these campuses, Keller graduate degree programs and Becker CPA
Review programs are also available at some sites.

In July 2005, there were 55 DeVry University Centers throughout
the United States either in operation or planned to be opened in
the coming months. Undergraduate degree programs are offered at
46 of these centers. The Company has announced plans to open new
DeVry University Center locations in Cincinnati, Ohio, Raleigh-

Durham, North Carolina and Oklahoma City, Oklahoma in fiscal
2006.

DeVry University Centers are established in convenient
metropolitan locations in modern buildings. These teaching
centers, which mostly range in size from approximately 5,000 to
20,000 square feet, include classrooms, computer labs with
Internet access, reference materials, admissions and
administrative offices. Teaching centers have an information
center designed to enhance students' success and support
coursework requiring data and information beyond that provided in
course texts and packets. The information centers include
personal computers; all software required in courses; Internet
access; alternate texts; popular business periodicals; videos of
selected courses; and access to numerous electronic data-bases.

Examples of smaller DeVry University Centers include those in
Scottsdale, Arizona (4,000 square feet); Waukesha, Wisconsin
(4,800 square feet); and Kansas City, Missouri (5,200 square
feet). Larger DeVry University Centers include Cleveland, Ohio
(15,800 square feet); Columbus, Ohio (16,200 square feet); and
Las Vegas, Nevada (18,500 square feet).

In the fourth quarter of fiscal 2005, the Company received an
offer to sell its building located at 925 South Niagara Street,
in Denver, Colorado. The building was acquired in 1999 with the
acquisition of Denver Technical College but was replaced in 2003
when a new and more modern facility was built to serve the Denver-
area market. Although it is still being used for classrooms and
offices, the building is not as well-located nor as well-suited
to current operations as the newer facility. Accordingly, in
June 2005, the Company entered into an agreement to sell the
building. In August 2005, the Company was notified by the
prospective purchasers that they were terminating the sales
contract. The Company has offered this building for sale to
other interested buyers.

MEDICAL AND HEALTHCARE
- ----------------------
Ross University
---------------
The medical school's basic science instructional facilities are
located on an approximately 25 acre campus on the Caribbean
island of Dominica. Approximately 14 acres are occupied under

lease. An additional 11 acres were purchased in fiscal 2004 to
facilitate expansion of instructional facilities and student
housing.

In addition to classrooms and auditoriums, educational facilities
include a gross anatomy lab, a multi-purpose lab, library and
learning resource center, offices, bookstore, cafeteria and
recreational space. Classrooms and laboratories are equipped
with state of the art audio-visual equipment. During fiscal
2005, the medical school refurbished 78 housing units that
occupied part of the land acquired in the previous fiscal year.
The refurbished housing units are being used for students and
visiting faculty. During fiscal 2004, a new 33,000 square foot
multi-purpose building that includes a 308 seat auditorium,
problem-based learning labs and faculty offices was completed and
put into service. A new 21,000 square foot facility with a 300
seat classroom, patient simulator labs and a patient exam center
was also completed and put into service.

The veterinary school's pre-clinical instructional facilities are
located on a 50 acre site. The Company owns 27 acres including a
five acre parcel of land acquired in fiscal 2004 to facilitate
campus expansion. The remaining 23 acres are pasture land leased
from the government under a long-term lease. Educational
facilities include an anatomy/clinical building, pathology
building, classroom buildings, administration building,
bookstore, cafeteria and a library/learning resource center. The
library/learning resource center is believed to be the largest
electronic learning lab in veterinary medical education. Animal
care facilities include kennels, aviary, livestock barns and
paddock. In fiscal 2005, additional emergency backup electrical
generating capacity was added and construction began on a 150-
unit housing facility for first semester students. Estimated
completion of the housing units is late fiscal 2006 or early
fiscal 2007. Plans are being finalized for the construction of a
new 150 seat classroom building to further increase student
capacity.

Ross University central administration is located in
approximately 18,000 square feet of leased office space in
Edison, New Jersey.

Deaconess College of Nursing
----------------------------
Deaconess leases approximately 55,000 square feet of space in a
hospital facility located in St. Louis, MO. The Deaconess
facilities include classrooms, dormitory space and administrative
offices.

PROFESSIONAL and TRAINING
- -------------------------
Becker is headquartered at the Company's corporate headquarters
in Oakbrook Terrace, Illinois. In addition to this main
administrative center, Becker leases approximately 8,300 square
feet of space in Southern California for staff devoted to
curriculum and other development efforts. Becker also leases
approximately 3,500 square feet of space in Melville, New York.
for its eastern regional sales and administrative staff.

CPA and CFA review classes are conducted in leased facilities,
fewer than ten of which are leased on a full-time basis. The
remainder of the classes are conducted in facilities which are
leased on an as-needed basis, allowing classes to be added,
expanded, relocated or closed as current enrollments require.
Becker classes are also offered on several DeVry University
undergraduate campuses and at DeVry University Centers where the
location and facility availability are appropriate.

CORPORATE
- ---------
The Company's administrative offices are located in approximately
160,000 square feet of leased space in an office tower in
Oakbrook Terrace, Illinois, a suburb of Chicago. In addition,
the Company leases more than 50,000 square feet in an adjacent
building for its data center, additional office space, storage
and other miscellaneous use.

In fiscal 2005, the Company purchased a 108,000 square foot
building in Naperville, Illinois, a nearby suburban location, to
house its expanding online operations. A parking deck is
currently under construction to expand the available parking
capacity at this site to facilitate further building occupancy.
With the relocation of staff associated with the online
operations to the Naperville facility, future space requirements
in the Oakbrook Terrace headquarters may be reduced somewhat.

The Company's leased facilities are occupied under leases whose
remaining terms range from one to 15 years. A majority of these
leases contain provisions giving the Company the right to renew
its lease for additional periods at various rental rates,
generally at rates higher than are currently being paid.

ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
The Company is subject to occasional lawsuits, administrative proceedings,
regulatory reviews associated with financial assistance programs and other
claims arising in the normal conduct of its business. The following is a
description of pending litigation that may be considered other than
ordinary and routine litigation incidental to the business.

In January 2002, Royal Gardner, a graduate of one of DeVry University's Los
Angeles-area campuses, filed a class-action complaint against DeVry Inc.
and DeVry University, Inc. in the Superior Court of the State of
California, County of Los Angeles, on behalf of all students enrolled in
the post-baccalaureate degree program in Information Technology. The suit
alleges that the program offered by DeVry did not conform to the program as
it was presented in the advertising and other marketing materials. In
March 2003, the complaint was dismissed by the court with limited right to
amend and re-file. The complaint was subsequently amended and re-filed.
During the first quarter of the Company's fiscal year 2004, a new complaint
was filed in the same court by Gavino Teanio with the same general
allegations and by the same plaintiffs' attorneys. This subsequent action
has been stayed pending the outcome of the Gardner matter. Discovery
continues in the Gardner matter, but there is no determinable date at which
this matter may be brought to conclusion.

In November 2000, Afshin Zarinebaf, Ali Mousavi and another graduate of one
of DeVry University's Chicago-area campuses filed a class-action complaint
in the Circuit Court for Cook County, Illinois that alleges DeVry graduates
do not have appropriate skills for employment in the computer information
systems field. The complaint was subsequently dismissed by the court, but
was amended and re-filed to include as a plaintiff Mark Macenas, a then-
current student in another curriculum from a second Chicago-area campus.
Discovery continues, and a hearing to determine class-action certification
has been held, though the court has not yet announced its ruling.

The two alleged class actions seek money damages of an indeterminate
amount. The Company has accrued $0.65 million representing the estimated
minimum amount to resolve the above two class-action claims.

attending these campuses. The Company's Toronto-area campus discontinued
operation and its students completed their education under an agreement
with RCC College of Technology as previously announced. Accordingly, the
Company is no longer participating in these financial aid programs. Final
discussions with the Ministry resulted in a resolution of these claims
during the fourth quarter of fiscal year 2005 for an amount less than
CDN$80,000, for which the Company had previously accrued.

In August 2005 counterclaims were filed against the company's subsidiary
Dominica Management, Inc. and the Ross University School of Medicine by
defendants American University of Antigua College of Medicine, Neal Simon
and Sol Weltman in a case filed by Dominica Management, Inc. in the U.S.
District Court for the Southern District of New York in September 2004.
The original case filed by Dominica Management, Inc. sought relief
primarily for alleged copyright infringement, misappropriation of trade
secrets and confidential information, and unfair competition. The
counterclaims allege, inter alia, anticompetitive behavior, tortious
interference with prospective economic relationships, and defamation.
Damages sought in connection with the counterclaims are in excess of
$1,000,000. Discovery into these claims is commencing.

While the ultimate outcome of these contingencies is difficult to estimate
at this time, the Company does intend to vigorously defend itself with
respect to the pending claims. At this time, the Company does not believe
that the outcome of current claims, administrative proceedings, regulatory
reviews and lawsuits will have a material effect on its cash flows, results
of operations or financial position.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
There were no matters submitted to a vote of the Company's security holders
during the fourth quarter of the fiscal year.

EXECUTIVE OFFICERS OF THE REGISTRANT

The name, age and current position of
each executive officer of the Company
are:

Name, Age and Office Business Experience
- -------------------- -------------------

Dennis J. Keller 64 Mr. Keller co-founded Keller
Graduate School of Management in
Chairman of the Board, DeVry Inc. 1973. From the inception of the
Company, Mr. Keller has been
Chairman of the Board. Mr. Keller
previously held the position of
Chief Executive Officer. In
November 2002 he became Co-Chief
Executive Officer with Ronald
Taylor until July 2004.

Ronald L. Taylor 61 Mr. Taylor co-founded Keller
Graduate School in 1973 and has
Director and Chief Executive been a director since its
Officer inception. Mr. Taylor was Dean of
Keller Graduate School from its
inception until 1981, when he
became President and Chief
Operating Officer of KGSM. Mr.
Taylor became Co-Chief Executive
Officer of the Company in November
2002 and was appointed Chief
Executive Officer in July 2004.

Daniel M. Hamburger 41 Mr. Hamburger joined the Company in
November 2002 as an executive vice
President and Chief Operating president with responsibility for
Officer, DeVry Inc. the Company's online programs and
Becker Professional Review
division. In July 2004, Mr.
Hamburger was appointed president
and chief operating officer of the
Company.

Prior to joining the Company, Mr.
Hamburger was chairman and chief
executive officer of Indeliq, a
developer of simulation-based
training software, which merged
with Accenture Learning in 2002.
From 1998 to 2000, he was president
of W.W. Grainger's Internet
Commerce Division.

O. John Skubiak 55 Mr. Skubiak joined Keller Graduate
School of Management more than 25
Executive Vice President and years ago. He has held senior
President, DeVry University management positions with Keller
Graduate School and DeVry
Institutes over that time. Mr.
Skubiak assumed his current
position in July 2004, with
responsibility for all DeVry
University operations other than
its online operations.

Thomas C. Shepherd 55 Dr. Shepherd joined the Company in
October 2004 as president of Ross
Executive Vice President, DeVry University. Prior to joining the
Inc. and President, Ross Company, Dr. Shepherd was president
University of Bastyr University, a Washington
based university with offerings in
healthcare education. He also co-
founded Royale Healthcare, a
hospital management company, and
has served in senior management
roles for several hospitals and
healthcare facilities.

Paul Eppen 42 Mr. Eppen joined the Company in
April 2004 as a senior vice
Senior Vice President and Chief president and chief marketing
Marketing Officer, DeVry Inc. officer. Prior to joining the
Company, Mr. Eppen held similar
positions at True Green Companies,
a division of Service Master from
May 2001, and at Conseco Direct
from June 1998. He has also held
senior marketing positions with New
York Life Ins. Co and Spiegel. In
2005, Mr. Eppen assumed additional
responsibility for public relations
and alumni outreach.

Norman M. Levine 62 Mr. Levine has been with the
Company since 1982 and its chief
Senior Vice President and financial officer since 1989. He
Chief Financial Officer, DeVry became a senior vice president in
Inc. January 2001, assuming the added
responsibility for the Company's
tax planning and compliance. In
2005, Mr. Levine assumed additional
responsibility for the Company's
investor relations efforts.

Gerald Murphy 57 Mr. Murphy joined the Company in
1995 as a vice president with
Senior Vice President, DeVry responsibility for the operation of
University several of the DeVry undergraduate
campuses in the U.S. and Canada,
following which he was responsible
for new DeVry campus locations and
program development. Mr. Murphy is
currently responsible for the
oversight of all the DeVry
University site operations.

Sharon Thomas Parrott 55 Ms. Thomas Parrott joined the
Company in 1982 after several years
Senior Vice President, Government as an officer in the U.S.
and Regulatory Affairs and Chief Department of Education's Office of
Compliance Officer, DeVry Inc. Student Financial Assistance. She
served the Company in several
student finance positions and later
assumed responsibility for
corporate communications and
government and public relations.
In her current position, she is
responsible for implementing and
maintaining the Company's corporate
and government compliance program.
She is also responsible for
managing relations with key
external audiences, including
government officials, education
policymakers and legislators.

Thomas A. Babel 50 Mr. Babel joined the Company in
1984 and held a number of positions
Vice President, Student Finance, including director of student
DeVry Inc. accounts and dean of student
finance.

In his current position since
September 2003, Mr. Babel is
responsible for student finance
policies and the delivery of
federal and state financial aid in
compliance with U.S. and Canadian
federal, state and provincial
student financial assistance
regulations.

Jack L. Calabro 63 Mr. Calabro joined DeVry in 1999 as
vice president of Human Resources.
Vice President, Human Resources, Prior to joining DeVry, Mr. Calabro
DeVry Inc. was vice chancellor of human
resources at City Colleges of
Chicago and vice president of human
resources at Helene Curtis
Industries.

James R. Dill 57 Mr. Dill joined the Company in
1972, originally working at the
Vice President, Operations, DeVry DeVry Columbus campus. Most
University recently Mr. Dill had been the
president of DeVry University -
Addison. In his current position,
Mr. Dill is responsible for the
management of several DeVry
University operating locations.

Rose Marie Dishman 61 Dr. Dishman joined the Company in
1992, serving originally as dean of
Regional Vice President, DeVry academic affairs for the DeVry
University Pomona undergraduate campus before
becoming president of the three
Southern California campuses. In
her current position, Dr. Dishman
is responsible for the management
of several DeVry University
operating locations.

James A. Dugan 56 Mr. Dugan joined the Company in
1980 serving in a number of
Regional Vice President, DeVry operating positions at DeVry
University University - Phoenix, most recently
as its president. In his current
position, Mr. Dugan is responsible
for the management of several DeVry
University operating locations.

Galen Graham 56 Dr. Graham joined the Company in
1982 serving in a number of
Regional Vice President, DeVry operating positions at the DeVry
University Columbus campus, most recently as
its president. In his current
position, Dr. Graham is responsible
for the management of several DeVry
University operating locations.

John Holbrook 54 Mr. Holbrook joined the Company in
2005 as vice president of new
New Student Recruitment, DeVry student recruitment. Mr. Holbrook
University is responsible for field and campus
admissions recruiting performance,
including the improvement of full-
time day enrollments. Prior to
joining the Company, Mr. Holbrook
served in related senior recruiting
management roles with other
national educational organizations,
most recently serving as director
of field recruitment and training
for ITT.

Timothy Joyce 44 Mr. Joyce joined the Company in
August 2000 as controller. Prior
Controller, DeVry Inc. to joining the Company, Mr. Joyce
was vice president and controller
of THK America, a manufacturer and
distributor of electronic devices,
in Schaumburg, Illinois. In
addition to his responsibilities as
controller, Mr. Joyce is also
actively participating in the
Company's Sarbanes-Oxley compliance
efforts.

James W. Kho 60 Dr. Kho joined the Company in 2000,
serving originally as president of
Vice President, Operations, DeVry DeVry University - Fremont. In his
University current position, Dr. Kho is
responsible for the management of
several DeVry University operating
locations.

C. Robert LeValley 62 Mr. LeValley joined the Company in
1972 as an admissions
Regional Vice President, DeVry representative, progressing to
University positions of increasing
responsibility, serving most
recently as president of DeVry
University - Kansas City. In his
current position, Mr. LeValley is
responsible for the management of
several DeVry University operating
locations.

Donna M. Lorraine 52 Dr. Lorraine joined the Company in
1994 as an assistant professor.
Vice President, Operations, DeVry Dr. Lorraine has been president of
University DeVry University campuses in Dallas
and Atlanta. In her current
position, Dr. Lorraine is
responsible for several DeVry
University operating locations.

Patrick L. Mayers 65 Dr. Mayers joined Keller Graduate
School of Management in 1978 as
Vice President, Academic Affairs, dean of academic affairs. Dr.
DeVry Inc. and Dean, Keller Mayers served as vice president of
Graduate School of Management academic affairs for Keller
Graduate School until 1997 at which
time he became vice president of
academic affairs for the DeVry
Institutes. In 2002, Dr. Mayers
was promoted to vice president of
Academic Affairs for DeVry
University and now also serves as
the dean of Keller Graduate School.

Timothy H. Ricordati 49 In 2002, Dr. Ricordati was promoted
to head all enrollment management
Vice President, Student Services activities at DeVry University.
and Retention, DeVry University Previously, Dr. Ricordati was Dean
of the Keller Graduate School of
Management, responsible for the
Company's university center and
online education operations and
DeVry University enrollment
management. Currently Dr.
Ricordati is responsible for
overseeing and coordinating DeVry
University student services,
including student life and service
activities, career services and
retention programs.

Steven Riehs 45 Mr. Riehs joined the Company in
2004 as vice president and general
manager of all online operations,
Vice President and General including enrollment growth,
Manager, Online Operations, DeVry program development and student
Inc. services. Prior to joining the
Company, Mr. Riehs was chief
executive officer at BrainX, Inc.,
an education software company; vice
president in the medical division
of Kaplan Educational Centers and
vice president and chief operating
officer of Compass Medical
Education Network.
81

Kenneth Rutkowski 58 Mr. Rutkowski joined the Company in
1985 as director of operations and
Vice President, Operations administrative services and was
Services and Administration, DeVry promoted to his current position in
Inc. 1991. His responsibilities include
managing the Company's real estate,
business insurance coverage and
various administrative functions.

Thomas J. Vucinic 58 Mr. Vucinic has been the general
manager of Becker Professional
Vice President, DeVry Inc. and Review since 1997. Prior to that,
General Manager, Becker Mr. Vucinic was the Company's
Professional Review director of financial planning and
analysis.

Gerald J. Wawrzynek 50 Mr. Wawrzynek has been with the
Company since 1987. He is
Vice President, Tax and Treasury, responsible for the Company's
DeVry Inc. treasury operations and its tax
planning and compliance.

David M. Webster 55 Mr. Webster joined the Company in
April 2005 as its general counsel
Vice President, General Counsel and corporate secretary. Prior to
and Corporate Secretary, DeVry joining the Company, Mr. Webster
Inc. was senior vice president and
general counsel at Hawaiian
Airlines and was of counsel at the
law firm of Butler Rubin Saltarelli
& Boyd. Mr. Webster has previously
been general counsel of A.T.
Kearney, a partner in the law firm
of Winston & Strawn and has held
positions in the U.S. Arms Control
and Disarmament Agency and the
Federal Bureau of Investigation.

PART II
-------

ITEM 5 - MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
- -----------------------------------------------------------
(a) Market Information
------------------
The Company's common stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "DV."

The following table sets forth the high and low sales price information by
quarter for the past two years as reported in the consolidated transaction
reporting system.

FISCAL 2005 FISCAL 2004
----------------- --------------------
HIGH LOW HIGH LOW
------ ------ ------ ------
First Quarter $27.74 $17.09 $30.15 $21.85

Second Quarter 20.83 13.05 27.74 21.97

Third Quarter 19.35 15.45 31.89 24.96

Fourth Quarter 24.48 18.55 32.38 26.10

(b) Approximate Number of Security Holders
--------------------------------------
There were 664 holders of record of the Company's common stock as of
September 1, 2005. The number of holders of record does not include
beneficial owners of its securities whose shares are held by various
brokerage firms and other financial institutions. The Company believes
that there are over 10,000 beneficial holders of its common stock including
employees who own stock through the exercise of stock options, who own
stock through participation in the employee stock purchase plan or who own
stock through their investment election in the Company's profit sharing
plan.

(c) Dividends
---------
The Company is a holding company and, as such, is dependent on the earnings
of its subsidiaries for funds to pay cash dividends. Cash flow from the
Company's subsidiaries may be restricted by law and is subject to some
restrictions by covenants in the subsidiaries' debt agreements, including
maintaining consolidated net worth, fixed charge coverage and leverage at
or above specified levels. The Company has not paid any dividends on its

common stock and expects for the foreseeable future to retain all of its
earnings from operations for use in the Company's business. From time to
time, the board of directors will review the Company's dividend policy.
Any payment of dividends will be at the discretion of the board of
directors and will be dependent on the earnings and financial requirements
of the Company and other factors as the board of directors deems relevant.

ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
Selected financial data for the Company for the last five years are
included in the exhibit, "Five-Year Summary - Operating, Financial and
Other Data", on page 164 of this report.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------
The following discussion of the Company's results of operations and
financial condition should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto appearing
elsewhere in this report.

In fiscal year 2005, DeVry Inc. continued its programmatic diversification
with the introduction of more business and healthcare programs, expanding
the Company's position at the intersection of technology, business and
healthcare education. We also expanded our existing programs to new
locations, opening seven new DeVry University Centers and streamlined our
operations to better position us for the future. In March 2005, the
Company completed the acquisition of Deaconess College of Nursing, which
along with DeVry University undergraduate biomedical programs, adds to the
Company's strong presence in the rapidly growing field of healthcare. In
July 2005, at the start of fiscal year 2006, the Company acquired Gearty
CPE, a provider of continuing professional education programs and seminars
in accounting and finance, primarily in the New York/New Jersey metro area.
This acquisition allowed Becker Professional Review to enter the continuing
professional education marketplace.

DeVry undertook several workforce reductions to better match human
resources to the changing demands of our business. In addition, the
Company implemented a comprehensive growth plan, which is aimed primarily
at DeVry University. The focus of this plan is to improve recent financial
results caused principally by declines in enrollment of full-time

technology program undergraduate students. However, enrollments in
business and management programs at DeVry University Centers and DeVry
University Online continued to grow.

Changes to our management structure during fiscal 2005 included creation of
the position of vice president of new student recruitment at DeVry
University, aimed at better focusing undergraduate student recruiting
efforts. Also during fiscal 2005, the Company added a general manager to
oversee all aspects of its growing online operations and moved much of the
online sales and support functions from its corporate headquarters location
to a nearby newly-acquired facility to promote operational efficiency.

FISCAL YEAR ENDED JUNE 30, 2005 VS. FISCAL YEAR ENDED JUNE 30, 2004
The following table presents information with respect to the relative size
to revenue of each item in the Consolidated Statements of Income for both
the current and two previous fiscal years. Percents may not add due to
rounding.
Fiscal Year
---------------------------------
2005 2004 2003
---- ---- ----
Revenue 100.0% 100.0% 100.0%

Cost of Educational Services 56.0% 53.5% 53.9%
Student Services & Admin. Exp. 38.4% 35.1% 33.2%
Interest Expense 1.2% 1.0% 0.2%
------- ------- -------
Total Costs and Expenses 95.6% 89.6% 87.3%
------- ------- -------
Income Before Income Taxes and
Cumulative Change in Accounting 4.4% 10.4% 12.7%

Income Tax Provision 1.0% 3.0% 4.9%
Non-Recurring Tax Benefit - - (1.2%)
------- ------- -------
Income Before Cumulative Effect of
Change in Accounting 3.4% 7.4% 9.0%

Cumulative Effect of Change
in Accounting 0.2% - -
------- ------- -------
Net Income 3.7% 7.4% 9.0%
======= ======= =======

Total consolidated revenue for fiscal 2005 declined from 2004 by $3.6
million or 0.5%. Revenues are reported net of tuition refunds applicable
to students who withdraw from the academic term for which they are enrolled
during the period specified by the refund policy. Revenues increased in
the Professional and Training segment, Medical and Healthcare segment and
in the Keller Graduate School of Management operations of DeVry University.
However, lower DeVry University undergraduate enrollments for each of the
three semesters that began during this fiscal year continued to affect
overall financial results. Continued declines in full-time technology
enrollments, principally at the large campus locations, was the primary
cause of decreased total enrollment. Further contributing to the decline
in revenue in fiscal 2005 compared to fiscal 2004 was the completion of
outsourcing of campus bookstore operations at DeVry University as discussed
more fully below.

DeVry University
----------------
In the DeVry University segment, revenues declined from fiscal 2004 by
$20.1 million, or 3.0%. Within DeVry University, total graduate courses
taken during the year increased by 7.8% and tuition pricing was increased
by approximately five percent effective with the term that began in January
2005. However, while total undergraduate enrollments continued to decline,
enrollments in the undergraduate DeVry University Center and online
operations within DeVry University continued their growth. Enrollment
growth at the University Center and online operations, which are focused to
serve working adult students interested primarily in the Company's business
programs, was not sufficient to offset declines in full-time undergraduate
enrollments at the large campuses whose primary focus has been recent high
school graduates enrolled in technology-based programs. To reverse the
pattern of declining technology and full-time student enrollments,
additional marketing efforts were initiated. As a result of these
additional marketing efforts, new undergraduate student enrollments in
technology programs for spring 2005 declined by 14% from the year ago
period, a much lesser rate than the decline of 30% vs. prior year in the
preceding fall. For the summer 2005, new technology program enrollments
were only 3.5% below those of a year ago, again reflecting the results of
additional marketing efforts as the rate of decline in new technology
enrollments continued to lessen.

For the spring of fiscal 2005, new student undergraduate enrollment
increased by 6.4% from the prior year, following a decline of 5.8% in new
student enrollments for the preceding fall. For the three semesters in
fiscal 2005, the Company reported total undergraduate enrollments that were

seven percent below those of a year-ago, reflecting the continued effect of
declines in new student enrollments during fiscal 2003 and the latter part
of fiscal 2002. Furthermore, a greater proportion of undergraduate students
are now working adults who typically enroll for less than a full-time
academic load. These part-time students pay a somewhat lesser tuition
amount each term than do full-time students at the undergraduate campus
locations. Therefore, the average tuition revenue per enrolled student has
declined somewhat from previous years. Partially offsetting these declines
was an approximately five percent tuition increase that became effective in
November 2004. The previous tuition price increase, also approximately
five percent, was implemented in March 2004.

For the summer 2005, which is the first term in the Company's fiscal year
2006, new DeVry University undergraduate student enrollments increased by
7.3% from last year as enrollments in the DeVry University Centers and
online continued to increase. However, total undergraduate enrollments
remained below prior year levels, down by 4.8%, from last summer. This
represents a lesser rate of decline in total enrollments when compared to
the decline in total undergraduate enrollments in spring that was 6.8%
lower than in spring 2004. For the Keller Graduate School July session,
total coursetakers increased by 11.3% from the prior July to 11,434.

Also contributing to the decline in DeVry University revenues was the
completion of the transition to outsource management of DeVry University
campus bookstore and educational supply sales to Follett Higher Education
Group ("Follett"). During fiscal 2005, the Company completed an amended
agreement with Follett to undertake the management of the remaining nine
DeVry University campus locations, completing the transition that began
several years ago. As a result of this transition, the Company no longer
reports sales revenue at its previously owned bookstores but reports
instead the commission income it receives on the sales made by Follett to
DeVry University students. Accordingly, for fiscal 2005, revenues from the
sale of books and educational supplies at DeVry University declined by
approximately $8.6 million from last year, reflecting both the effects of
lower student enrollments and completion of the outsourcing agreement.
Although reported revenues have declined as noted above, there has been no
significant effect on income as the commission earned from Follett
approximates the profits previously generated by the bookstores when they
were under Company management.

Professional and Training
-------------------------
In the Professional and Training segment, revenues reached a record high,
increasing by $8.1 million, or 22.5% from last year. The increase in
revenues this year is largely attributable to the sharp decline in revenues
during the third quarter of last year at Becker Professional's CPA exam
operations following the change in the CPA exam schedule and format. This
year, with the new format exam offered on a regular schedule in each
quarter of the year, the number of exam takers and enrollments in the
Becker review course rebounded sharply from last year.

The change in the schedule of CPA exam administration also resulted in the
realignment of the fiscal year for this business from its previous April
year-end to a June year-end, consistent with the fiscal year-end for the
rest of the Company. This change in accounting was made effective with the
first quarter of this fiscal year.

Medical and Healthcare
----------------------
The Medical and Healthcare segment revenues include Ross University and the
results of the Deaconess College of Nursing from its date of acquisition at
the end of March 2005. With approximately 450 students enrolled at the
time of its acquisition, Deaconess revenues for the final three months of
the fiscal year were approximately $1.1 million. At Ross medical and
veterinary school operations, revenues increased by approximately $7.2
million, or 8.7%, largely as a result of a price increase of slightly less
than eight percent implemented in January 2005. For the May semester,
total enrollments at the medical and veterinary schools were 3,029, or 8.5%
below those of a year-ago, as a result of changes to admissions standards
for new students and increased satisfactory academic progress policies for
continuing students. Revenue for the May 2005 term is recognized partly in
fiscal 2005 and partly in the Company's new fiscal year 2006.

Other Educational revenue declined by $3.6 million, or 7.7%, from last
year. Other Educational revenue is composed primarily of the sale of books
and supplies in connection with the Company's educational programs,
including the commission income earned from Follett. Also included is this
category of revenue is the sale of Becker CPA Review course materials on CD-
ROM and other CPA and CFA review study materials, application and other non-
refundable student fees and interest or payment deferral charges on
students' outstanding accounts receivable balances. The decrease in
revenue from last year occurred because of the transition of the DeVry
University bookstore operations to Follett as described above.

Interest Income on the Company's short-term investments of cash balances
increased by $0.5 million. The increase is a result of both generally
higher short-term interest rates available for these investments and a
greater use of cash balances for investment rather than for use in
offsetting bank service fees as the Company did in the previous year.

The Company's Cost of Educational Services increased by $17.2 million, or
4.1%, from last year. Cost of Educational Services includes the cost of
faculty and related staff in support of educational operations. Faculty
and related staff represent more than half of the costs in this expense
category. Also included in this expense category are the costs of
facilities, supplies, bookstore and other educational materials, student
education-related support activities and the provision for uncollectible
student accounts.

Throughout the year, the Company maintained spending restraint and
implemented cost reductions in areas that we believe did not affect the
quality of student services. However, there have been cost increases in
support of the expanding number of DeVry University Centers and growth in
DeVry University Online enrollments. For example, in spring 2005, courses
were being taught at eight new DeVry University Centers compared to the
year-ago period and the number of online course takers increased by 79%
from last year to 19,759.

Also included in the Cost of Educational Services is approximately $6.7
million of expense related to workforce reductions, principally at DeVry
University, that were initiated during the year. In addition, the Company
incurred an additional approximately $0.4 million of workforce reduction
costs under its agreement with RCC College of Technology for the final
phases of the teach out of the Toronto-area campus programs as described in
more detail below.

Additions to land, buildings and equipment during this fiscal year were
$42.9 million as the Company continued its investment in new and improved
laboratory and computer equipment, improvements to facilities for its
students and staff and expansion of operations. As a result, depreciation
expense, most of which is included in Cost of Educational Services,
increased to $40.9 million. In addition the Company recognized a $1.5
million pre-tax impairment loss related to a Company owned building in the
Denver, Colorado area that was acquired in 1999 with the acquisition of
Denver Technical College. Although still used partly as classrooms and
offices, this facility is being offered for sale as it is no longer

essential to the Company operations in the Denver-area, having been largely
replaced by a new and larger DeVry University campus serving the Denver
market.

Student Services and Administrative Expense increased by $24.6 million, or
8.9% from last year. Included in this expense category are the costs of
new student recruiting, general and administrative costs, expenses
associated with curriculum development and the amortization expense of
finite-lived intangible assets related to acquisitions of businesses
including, most recently, Ross University and Deaconess College of Nursing.
Amortization expense during fiscal 2005 included in this expense category
was $14.1 million compared to $13.7 million last year.

The higher expense Student Services and Administrative expense also
reflects greater efforts to generate more new student enrollments through
increased advertising and student recruiting for all of the Company's
educational programs, particularly the DeVry University undergraduate
programs. Additional admissions advisors were added during the year at
both DeVry University in support of its growing online operations and at
Ross University's medical and veterinary schools. All new student
recruitment expenditures are charged to expense as incurred.

The Company believes that reductions in technology field employment during
the past several years has lessened applicant interest in these fields.
Therefore, the Company increased the level of recruitment activity to
increase student enrollments, particularly at DeVry University. The
Company believes that increased and more effective expenditures for new
student recruitment were largely responsible for the increase in new
undergraduate student enrollment for the spring semester of fiscal 2005,
which increased by 6.4% from the previous year. Costs of student
recruitment efforts for the summer of fiscal 2006 are included in the just
completed fiscal 2005. For summer of fiscal 2006, which is the first term
of the new fiscal year, new student enrollments increased for the second
consecutive semester, up 7.3% from last year.

Also contributing to the increase in Student Services and Administrative
Expense is approximately $1.7 million related to workforce reductions that
were initiated during the year affecting employees whose wages were
included in this expense category.

Initial development work on the DeVry University new student information
system has been largely completed and the system functionality deployed.

This new student information system provides better support for the
educational processes and related student services. In accordance with
accounting principles for internal software development costs, certain wage
and outside consulting costs were capitalized. Indirect expenses, such as
training and employee communications, were charged directly to expense as
incurred. During the year, approximately $0.5 million was capitalized for
this project. With initial development work now nearly complete, no
further amounts are being capitalized. Costs associated with further
development and improvements to the system are being charged to expense as
incurred. Cumulatively, a total of $20.6 million was capitalized for this
project. All of the initial elements of the system have been placed into
service and the capitalized costs are being amortized to expense over their
estimated useful lives, not exceeding five years. For the year, a total of
$4.3 million of previously capitalized costs were amortized to expense.
These amounts compare to $5.3 million that was capitalized during fiscal
2004 and $2.3 million of previously capitalized costs that were amortized
to expense.

In addition to the new student information system, the Company undertook
the implementation of a new budgeting and forecasting system this year to
better manage the costs associated with the growing size and complexity of
its operations. During the year, approximately $0.6 million of development
costs were capitalized for this project.

One of the Company's directors is also an investor in, and a director of, a
consulting firm engaged by the Company to assist with system development
projects, including the new student information system. Fees paid to this
consulting firm during fiscal 2005 and 2004 were approximately $1.1 million
and $4.8 million, respectively. The Company estimates that, based upon
current systems development activity, fees to be paid to this consulting
firm in fiscal 2006 will be reduced from the level of fiscal 2005.

DeVry University
----------------
The DeVry University segment operating income of $11.4 declined by almost
83% from last year. As discussed above, contributing to these lower
earnings was $20.1 million less revenue than last year resulting, in part,
from reduced total undergraduate student enrollments in each of the summer,
fall and spring terms this year and an increased proportion of part-time
students that each generate less tuition revenue than their full-time
counterparts had generated in previous years. Partly offsetting these
reductions were higher enrollments at the Keller Graduate School and
tuition price increases implemented during the year. Expenses associated

with new student recruitment increased from last year as the Company worked
to overcome the declining undergraduate enrollments and incurred additional
costs associated with new DeVry University operating locations. In
addition, growing online enrollments required us to add staff and
facilities to support these operations. Workforce reduction costs,
totaling approximately $8.0 million and an asset impairment charge of
approximately $1.5 million related to the offering for sale of a Denver-
area facility discussed above, also contributed to the increase in expense
and lower earnings.

Although spending on undergraduate campuses was curtailed as enrollments
there continued to decline, significant fixed costs of operation, such as
facility-related costs, could not be reduced. Operating losses of
approximately $3.3 million in DeVry University's Canadian operations, which
include the operating losses associated with the final shutdown of the
Company's Toronto-area campus and teach out agreement with RCC, were
approximately $0.7 million higher than last year. The Company believes
that almost all costs associated with this shutdown have been recognized
and operating results in Canada should improve in the future.

Professional and Training
-------------------------
In the Professional and Training segment, operating income of $14.6 million
was a record high, more than doubling from last year. In fiscal 2004, the
CPA exam format and schedule of exam offerings was changed, affecting exam
candidates' enrollment in the Becker CPA Review course. With the new CPA
exam format and schedule effective for the entire fiscal 2005, enrollments
and revenues rebounded.

Effective with the beginning of fiscal year 2005, the Becker business cycle
and fiscal year, which had previously ended in April to match the old CPA
exam period, was changed to align with the June 30 year-end of DeVry Inc.
With the current and nearly continuous exam administration schedule, the
Company believes that the historical Becker operating year is no longer the
most appropriate fiscal year-end. This change in accounting was
implemented and reported in the first quarter of fiscal 2005 as a
Cumulative Effect of Change in Accounting equal to $1.8 million of after
tax income, or approximately $0.02 per share. Revenues and operating
income for the Professional and Training segment in fiscal 2005 are
reported for the same July through June period as the rest of the Company.
In fiscal 2004, revenues and operating income in this segment were reported
for the period May 2003 through April 2004.

Medical and Healthcare
----------------------
In the Medical and Healthcare segment, we acquired the Deaconess College of
Nursing at the end of the third quarter of this fiscal year. Deaconess
operations during the fourth quarter, while contributing approximately $1.1
million of revenue, had no significant effect on the operating income of
this segment, which increased by approximately $0.3 million from last year.
Although revenues increased, operating margins at Ross University declined
from 39.3% last year to approximately 37.1% in the current year, partly as
a result of higher faculty wages and an increased number of faculty.
Continued additions and improvements to facilities at both the medical and
veterinary schools during the past two years have resulted in an increase
to depreciation expense of almost $1.3 million this year and is expected to
increase still further in the coming year. In response to the reduced
enrollments in the last two terms of fiscal 2005 caused by changes in
academic policies described above, Ross increased its marketing support and
added several additional admissions counselors, increasing student
recruitment expense and contributing to the declining operating margin.

Interest expense on the Company's borrowings was $9.0 million, an increase
of $1.2 million from last year. Borrowing levels throughout the year were
generally lower than last year, but the interest rate on the Company's
borrowings is based upon short-term interest rates, which increased
significantly over that period. For example, at June 30th, the interest
rates on the Company's Senior Notes was 4.44% compared to 2.42% one year
ago.

Taxes on income were 23.1% of pretax income for the year compared to 28.6%
last year. The lower effective tax rate this year reflects the greater
proportion of Ross University's earnings to the total Company earnings.
Earnings of Ross University's offshore operations are not subject to U.S.
federal or state taxes and are also currently exempt from income taxes in
the jurisdictions in which they operate. For the foreseeable future, the
Company intends to reinvest the Ross University earnings and cash flow to
reduce outstanding debt; improve and expand facilities and operations at
the schools; and pursue other business opportunities outside the United
States. Accordingly, the Company has not recorded a current provision for
the payment of U.S. income taxes on these earnings.

FISCAL YEAR ENDED JUNE 30, 2004 VS. FISCAL YEAR ENDED JUNE 30, 2003
- -------------------------------------------------------------------
Total consolidated revenues for fiscal 2004 set a new record, increasing by
$105.3 million, or 15.5%, from the previous year. Approximately 70% of the

increase in revenue was generated by the Ross University medical and
veterinary school operations that the Company acquired in May 2003 and were
not included in fiscal 2003 results until the final six weeks of the year,
from its mid-May date of acquisition until June 30, 2003.

Tuition revenues, which are the largest component of total revenues,
increased by $109.2 million, or 17.4%, from fiscal 2003. As with total
revenues, most of the increase was generated by the Ross University segment
but the DeVry University segment also contributed to this increase.
Tuition revenue is reported net of tuition refunds.

DeVry University
----------------
Revenues in the DeVry University segment increased by $38.9 million, or
6.2% from fiscal 2003. The increase is primarily the result of higher
enrollments and higher tuition pricing at Keller Graduate School. Revenues
at Keller were higher than last year, in part, because of the July 2003
conversion in course length from ten weeks to eight weeks as the graduate
program academic calendar was aligned with the DeVry University calendar.
This change in course length increased the number of terms each year from
five to six, and correspondingly increased revenue by 20% for the year
assuming that all students proceeded through the year with continuous
enrollment at the accelerated six term pace. For fiscal 2004, total
graduate courses taken increased by more than 26% as a result of the change
in course length and higher student enrollments in each term.
Revenues for the DeVry University segment also increased slightly from the
prior year because of tuition price increases, in July 2003 and March 2004,
of approximately five to six percent each, partially offsetting lower total
undergraduate enrollments. Undergraduate total student enrollments for the
term that began in November 2003 were 4.0% lower than last year and
undergraduate total student enrollments for the term that began in March
2004 were 4.5% lower than in the year earlier period. Although new student
undergraduate enrollments in fiscal 2004 were higher than in the previous
year in both of the final two terms of the year cited above, the increases
have been in online programs and programs at DeVry University Center
locations that are designed to serve working adult students. These
students typically enroll for less than a full-time academic load, and
accordingly, they pay a somewhat lesser tuition amount than students at the
undergraduate campus locations. Even though undergraduate enrollments in
business programs continue to increase, the Company believes that declines
in enrollment in its technology programs at its campus locations have been
caused by past reductions in technology field employment, which decreased
applicant interest in these fields. During fiscal year 2004, a new

undergraduate campus was opened in Houston, Texas, and several new DeVry
University Center locations were opened or expanded.

At the start of the summer term, which is the beginning of fiscal 2005,
graduate coursetakers increased from last year by 8.4% to 10,276. However,
total undergraduate enrollments in the summer term of fiscal 2005 of 38,036
remained below the level of the summer term of fiscal 2004, declining by
7.4% from 41,075. On a continuing operation basis, excluding the students
at the Mississauga (Toronto), Canada, campus that did not accept new
students after the summer term of fiscal 2003, the decline in total
enrollment from the summer of fiscal 2004 was 5.8%.

DeVry University entered into an agreement with Follett Higher Education
Group ("Follett") several years ago to manage some of the undergraduate on-
campus bookstores. The wider range of ancillary merchandise and
experienced retail store management available from Follett are believed to
provide an improved level of student service. DeVry University receives a
commission from Follett based upon the level of bookstore sales at these
campuses. At fiscal 2004 year-end, Follett was managing 14 campus
bookstores. Sales at Follett managed bookstores, net of commissions to
DeVry University, were approximately $16.0 million in fiscal 2004 compared
to $17.0 million in fiscal 2003. During fiscal 2004, sales of books to
students enrolled in online courses and at some DeVry University Centers
were managed by a different company under a similar commission agreement.
The Company has entered into an agreement with Follett to manage the
remaining campus bookstores and its online and center book sales, with the
transition occurring over several quarters in fiscal 2005.

Professional and Training
-------------------------
At Becker Professional Review in the Professional and Training segment,
revenues decreased from the previous year by more than $7 million dollars.
Effective with calendar year 2004, the twice a year, paper and pencil CPA
exam format is no longer being offered. Instead, the exam is now available
on demand almost year-round in a new computer based format. Candidates may
choose to take the four exam sections individually and at different times.
While this provides greater flexibility for candidates sitting for the
exam, it may extend the time over which exam candidates take review
courses, such as those offered by Becker and, therefore, extends the period
over which review course revenue is earned. The Company also believes that
some exam candidates delayed taking the new exam so as to benefit from the
experiences of the first of the takers of the new format exam, thus
reducing enrollments and revenues in the third and fourth quarter.

Beginning with fiscal 2005, the number of exam candidates did increase from
the reduced levels experienced in the latter part of fiscal 2004.

Medical and Healthcare
----------------------
Ross University revenues were included in fiscal 2004 for the entire year.
In fiscal 2003, Ross University segment revenues were included only for the
six-week period from the date of its acquisition until the end of the
fiscal year.

Other Educational revenue declined by $3.6 million, or 7.2%, from the prior
year. Other Educational revenue is composed primarily of the sale of books
and supplies in connection with the Company's educational programs,
including the Becker CPA Review course on CD-ROM and other CPA and CFA
review study materials, application and other non-refundable fees and
interest or payment deferral charges on students' outstanding accounts
receivable balances. The decrease in revenue from the year ago period
occurred primarily in the DeVry University segment where lower
undergraduate enrollments and a further outsourcing of book sales, as
discussed more fully above, affected this source of revenue.

Interest Income on the Company's short-term investments of cash balances
decreased by $0.3 million from fiscal 2003. The decrease is due to lower
interest rates available on investments and the use of most cash balances
to offset bank service fees rather than for short-term investments.

The Company's Cost of Educational Services increased by $54.0 million, or
14.8%, from fiscal 2003. Cost of Educational Services includes the cost of
faculty and related staff that represents more than half of this expense
category. Also included in this expense category are the costs of
facilities, supplies, bookstore and other educational materials, student
education-related support activities and the provision for uncollectible
student accounts.

The increase in this expense category includes a full year of cost of
operations at Ross University that was not a part of the Company for most
of the previous fiscal year. Cost increases were incurred through all of
the Company's previously existing operations, and costs associated with new
DeVry University Centers, the undergraduate Houston campus that opened in
September and a growing online student enrollment requiring additional
faculty and staff to support this growing method of delivery. At the new
DeVry undergraduate campuses in Philadelphia and South Florida that were

opened in the first half of last fiscal year, additional faculty and staff
are being hired as students progress into the higher terms of their
educational programs. For the Keller Graduate School term that began in
May 2004, courses were taught in seven new locations compared to the April
term of May 2003.

In the fourth quarter of fiscal 2003, the Company incurred charges of
approximately $2.5 million related to work force reductions in the eastern
Canada and U.S. operations. No such charges were incurred during fiscal
2004. However, in the second quarter of fiscal 2004, the Company
recognized an approximately $0.5 million pre-tax loss from asset impairment
on the furniture and laboratory equipment associated with the Company's
Toronto-area operations. Under its agreement with RCC College of
Technology for the teach out of the DeVry student programs that allows
students to complete their program of study, this equipment may become the
future property of RCC and will have no further useful life for DeVry
beyond the period of the teach out.

Additions to land, buildings and equipment were $42.8 million in fiscal
2004 as the Company continued its investment in new and expanded facilities
and equipment for students and staff. As a result of these and previous
years' additions to facilities and equipment, depreciation expense, most of
which is included in Cost of Educational Services, increased by $3.1
million compared to the previous fiscal year, after increasing by $4.9
million in fiscal 2003 from fiscal 2002. Fiscal 2003 depreciation expense
included a $0.8 million pre-tax impairment loss on long-lived leasehold
improvements in the Company's Canadian operations.

Student Services and Administrative Expense increased by $49.8 million, or
22.1% from the prior year. Student Services and Administrative Expense
includes the costs of new student recruiting, general and administrative
costs, expenses associated with curriculum development and the amortization
expense of finite-lived intangible assets related to acquisitions of
businesses, including the acquisition of Ross University. Amortization
expense included in this expense category during fiscal 2004 was $13.7
million compared to only $2.5 million in fiscal 2003.

The increase in expense also includes marketing and administration at Ross
University for a full year compared to just the six-week period at the end
of fiscal 2003. The increased expense in fiscal 2004 also reflects the
higher advertising and selling costs associated with efforts to generate

more new student enrollments, primarily in DeVry University's undergraduate
educational programs.

The Company believes that recent reductions in technology field employment
decreased applicant interest in these fields, requiring the Company to
increase the level of its recruitment activity to maintain enrollments.
Expenditures for new student recruitment are charged to expense as
incurred. The Company believes that increased expenditures for new student
recruitment were largely responsible for the increases in new undergraduate
student enrollments for the past several terms. For the undergraduate term
that began in July 2004, that is the start of the Company's fiscal 2005,
new student undergraduate enrollments increased by 0.9% from last year,
excluding the final admission in July 2003 of new students to the now
discontinued Toronto-area operations. For the previous two undergraduate
term that began in March 2004 and November 2003, new student undergraduate
enrollments increased by 3.9% and 3.2%, respectively, from the previous
year in the final terms before new students were no longer being accepted
in Toronto.

Information systems development costs are also included in Student Services
and Administrative Expense. In response to the growing size and complexity
of its varied educational program offerings, the Company continued its
development and implementation of a new student information system to
better support the educational process and supporting activities. In
accordance with accounting principles for internal software development
costs, certain wage and outside consulting costs associated with this
project are being capitalized. Indirect expenses, such as training and
employee communication, are being charged directly to expense as incurred.
At the end of fiscal 2004, costs capitalized totaled $20.0 million, of
which $5.3 million was capitalized during this year. This compares to
$14.7 million of total capitalized costs at the end of fiscal 2003, of
which $6.0 million was capitalized in that year.

Many of the elements of this system have now been placed into service and
the capitalized costs are being amortized to expense over the estimated
useful life of each program element, but not exceeding five years.
Amortization began in the fourth quarter of fiscal 2002. In fiscal 2004,
amortization expense totaled $2.3 million compared to $0.5 million in the
previous year. Cumulatively, a total of $2.9 million has been amortized to
expense through the end of fiscal 2004. In addition to the amounts
amortized to expense, $5.2 million of related but indirect activity costs
were charged directly to expense in fiscal 2004. This compares to $5.5

million charged directly to expense in the previous year.
One of the Company's Directors is also an investor in, and a director of, a
consulting firm engaged by the Company to assist with system development
projects, including the new student information system. Fees paid to this
consulting firm have been negotiated to a level believed to be comparable
to those charged to similar customers. Fees paid to this consulting firm
during fiscal 2004 and 2003 were approximately $4.8 million and $4.1
million, respectively. As the student information system moved from its
development phase to deployment, fees paid by the Company to this
consulting firm in fiscal 2005 declined to approximately $1.1 million.

DeVry University
----------------
In the DeVry University segment, operating income and the operating margin
declined from last year. Contributing to the fiscal year 2004 lower
earnings were the lesser total undergraduate student enrollments discussed
above and increased spending on undergraduate new student recruiting to
increase future term enrollments. Income was also affected by the
increased number of new teaching locations and expanding educational
operations to support the increased enrollments in online programs.
Although spending at the undergraduate campuses was curtailed as
enrollments declined, significant fixed costs of operation, such as
facility-related costs, were not able to be reduced. Also affecting income
was the recognition of a $0.5 million pre-tax asset impairment loss on the
Toronto-area furniture and laboratory equipment used under the teach out
agreement with RCC as discussed above. This agreement has reduced the
Company's operating losses at the Toronto campus below what such losses
were under Company management in fiscal 2003 and below what the losses
would have been if the Company continued to manage the educational process
and services through the current year. Partly offsetting these factors in
the undergraduate operations was the positive effect on margins from higher
enrollments at Keller Graduate School and from the positive effect on
income from the conversion to an eight-week term length aligned with the
common DeVry University calendar as discussed above. Additionally, price
increases of approximately five to six percent for both undergraduate and
graduate students were implemented in July 2003 and another price increase
was implemented for the term that began in March 2004.

Professional and Training
-------------------------
In the Professional and Training segment, operating income declined by
almost $7.9 million from the previous year because of the effects on
enrollment and revenues from the change in the CPA exam format and schedule
as discussed above. Also, cost increases for development of the new CPA

exam format materials adversely affected income for the year. Because of
the change to the CPA exam schedule, the Company believes that the
historical Becker operating year that ended in April with the
administration of the spring CPA exam is no longer the most appropriate
fiscal year end. Effective with the Company's fiscal 2005, the Becker
fiscal year will be aligned with the June 30 year-end of DeVry Inc. This
change in accounting will be implemented and reported in the first quarter
of fiscal 2005. The cumulative effect of this change in accounting is
expected to add approximately $0.02 per share for the first quarter and
total year of fiscal 2005.

Medical and Healthcare
----------------------
Income from the Ross University acquisition was first incorporated into the
Company's financial results in the fourth quarter of fiscal 2003 following
completion of its May 2003 acquisition. For fiscal year 2004, Ross
University contributed $32.7 million of operating income, or a 39.4%
margin, before interest expense and amortization expense of intangible
assets associated with its acquisition.

Interest expense increased by $6.6 million from fiscal 2003 because of the
fourth quarter of fiscal 2003 borrowings for the acquisition of Ross
University. During fiscal 2004, borrowings were reduced by $40 million to
$250 million using existing cash balances and cash generated from
operations. Short-term interest rates, that serve as the basis for the
interest rate on this debt, remained low during fiscal 2004 but have now
begun to increase. The Company intends to make further debt reductions
during fiscal 2005, which should offset the effect of higher interest
rates.

Taxes on income were 28.6% of pretax income for the year 2004 compared to
29.3% in the previous year. In fiscal 2003, the Company recognized non-
recurring tax benefits of $8.1 million associated with the restructuring of
its Canadian operations. Without this non-recurring benefit, the tax rate
for fiscal 2003 would have been 38.7%. The Company's tax rate on income is
the composite of state and federal taxes on operations other than from Ross
University and a single digit rate on the earnings of Ross University, most
of which is earned offshore in jurisdictions where the Company has
agreements with those governments that exempt Ross earnings from local
income taxes. For the foreseeable future, the Company intends to reinvest
the Ross University earnings and cash flow to reduce outstanding debt,
improve and expand facilities and operations at the schools; and pursue

100

future business opportunities outside the United States. Accordingly, the
Company has not recorded a current provision for the payment of U.S. income
taxes on these earnings.

APPLICATION OF CRITICAL ACCOUNTING POLICIES
- -------------------------------------------
Note 1, Summary of Significant Accounting Policies, in the Notes to
Consolidated Financial Statements for the fiscal year ended June 30, 2005,
describes in more detail the method of application of significant
accounting policies and should be read in conjunction with the discussion
below.

Revenue Recognition
- -------------------
DeVry University tuition and technology fees, Ross University tuition
revenues for the basic science semesters and Deaconess College of Nursing
revenues are billed at the start of each academic term. That revenue is
recognized ratably on a straight-line basis over that academic term.
Revenues from Ross University clinical terms is recognized based upon the
student's weekly schedule of actual attendance. Tuition and other refunds
are reported as a reduction of revenues. Textbook and other educational
supply sales and commissions on such sales by Follett are recognized when
the sale occurs.

Expense Recognition
- -------------------
Advertising costs are charged to expense in the period in which materials
are purchased or services are rendered. Similarly, all start-up expenses
related to new operating locations and new curriculum development costs are
also charged directly to expense as incurred.

Allowance for Uncollectible Accounts
- ------------------------------------
The allowance for uncollectible accounts is determined by analysis of both
the current level of accounts receivable and current loss rates on
collections of accounts receivable from students. In addition, the
determination of the allowance considers projections of future receivable
levels and collection loss rates. This analysis is performed periodically
throughout the year and required provisions to maintain the allowance at
appropriate levels are charged to expense in each period as required.

Internally Developed Software
- -----------------------------
Selected costs associated with developing the Company's new student
information system and its new budgeting and forecasting system have been
capitalized in accordance with the rules on accounting for costs of
computer software developed for internal use.

Land, Buildings and Equipment
- -----------------------------
Fixed asset acquisitions are recorded at cost. Depreciation, including
depreciation on the capitalized software development costs, is computed on

101

a straight-line basis over the estimated useful life of the asset.

Stock Based Compensation
- ------------------------
Stock based compensation is accounted for using the intrinsic value
approach of APB 25 and all required disclosures relative to such
compensation and its pro forma effect on earnings are disclosed in Note 1
of the Notes to Consolidated Financial Statements. Effective with the
first quarter of fiscal 2006, stock based compensation will be recorded as
compensation expense in accordance with SFAS #123R.

Impairment of Goodwill and Other Intangible Assets
- --------------------------------------------------
In accordance with SFAS 142, entitled "Goodwill and Other Intangible
Assets," the Company annually undertakes an assessment of the fair value of
its reporting units compared to their carrying value for potential
impairment of goodwill, and of the fair value compared to carrying value of
intangible assets arising from a business combination. This assessment is
performed either annually, or more frequently if circumstances require,
with the assistance of an independent professional valuation specialist.
The valuation is based upon several factors including estimates of future
revenues and earnings, a discounted cash flow analysis for several future
years, and includes other assumptions such as future income tax and
interest discount rates. Such estimates require significant judgment, and
over the period of future years, actual results may differ from these
estimates. Although management believes that its estimates are
appropriate, decreases in earnings and cash flow from the estimates used in
these assessments and/or significant changes in other assumptions
underlying the analysis could result in impairment charges in future
periods. At June 2005, intangible assets from business combinations
totaled $73.7 million, and goodwill totaled $289.3 million. Together these
assets equal approximately 40% of total assets, and any impairment could
significantly affect future results of operation.

Impairment of Long-Lived Assets
- -------------------------------
The Company evaluates the carrying amount of its major long-lived assets,
principally real-estate, whenever changes in circumstances or events occur
that indicate that the value of such assets may not be fully recoverable in
accordance with SFAS #144, "Accounting for Impairment or Disposal of Long-
Lived Assets". In conjunction with an offer to purchase one of its owned
educational facilities, the Company determined that this facility was no
longer essential to its Denver-area operations. Although the original
offer to purchase the property was terminated by the prospective
purchasers, the Company has now offered this property for sale to other
interested buyers. Accordingly, the Company, with the assistance of an
independent professional valuation specialist, determined the fair value of
this property in relation to its expected market value.

102

Environmental Liabilities
- -------------------------
The Company's educational operations do not produce or cause environmental
problems and the Company is not currently subject to any environmental
claims. Accordingly, the Company has made no estimate of future
liabilities.

Income Tax Liabilities
- ----------------------
The Company recognizes income tax expense based upon income earned.
However, some expenses may be recorded in one period for financial
statement reporting but in another period's tax return, e.g. depreciation
expense. These timing differences give rise to deferred tax assets and
liabilities that are recorded on the Company's balance sheet to reflect the
subsequent payment of these amounts. These deferred tax items are
regularly analyzed and valuation reserves established as required for
deferred tax assets when their realization is in doubt.

Estimates and Assumptions
- -------------------------
The Company's financial statements include estimates and assumptions about
the reported amounts of assets, liabilities, revenues and expenses whose
exact amounts will not be known until future periods. The Company's
management has discussed with the Audit Committee of the Board of Directors
the critical accounting policies discussed above and the significant
estimates included in the financial statements in this Report. Although
the Company believes its assumptions and estimates are reasonable, actual
amounts may differ from the estimates included in the financial statements
and could produce materially different results in the future.

Significant estimates and assumptions included in the Company's financial
statements include the method of revenue recognition across the academic
periods, determining the useful lives of equipment and facilities whose
value is a significant portion of the Company's total assets, determining
the value and useful lives of acquired finite-lived intangible assets,
determining the value of indefinite-lived intangible assets, determining
the pattern of the amortization of finite-lived intangible assets over
their economic life, estimating losses to be realized in the future on the
collection of presently owed student receivable balances, estimating costs
associated with any settlement of law suits in which the Company is a
defendant and estimating health care reimbursement claims for medical
services rendered but for which claims have not yet been processed or paid.
In fiscal 2005, the Company revised the estimate of its liability for
future teaching obligations at Becker Professional Review relating to its
free continuing help policy. After review, the Company concluded that
there was no expected future cost associated with this obligation.

103

The methodology by which each of the above estimates has been determined
for fiscal 2005 is consistent with the manner in which such estimates were
made in prior years although the parameters used in setting the value of
these estimates is regularly analyzed and may change as current conditions
warrant. Variances from estimate to actual expense for these items in past
years have not been material. Although different assumptions about the
parameters affecting each of these estimates could produce a different
amount of estimate, the reasonably determined range of estimates for each
item would generally not be large enough to materially change the overall
Company reported financial results.

CONTINGENCIES
- -------------
The Company is subject to occasional lawsuits, administrative proceedings,
regulatory reviews associated with financial assistance programs and other
claims arising in the normal conduct of its business. The following is a
description of pending litigation that may be considered other than
ordinary and routine litigation incidental to the business.

104

Discovery continues, and a hearing to determine class-action certification
has been held, though the court has not yet announced its ruling.

In conjunction with the required annual review procedures related to its
administration of financial aid programs under the Ontario Student Aid
Program, the Toronto-area DeVry campuses engaged in discussions with the
Ontario Ministry of Education relating to certain additional information
requirements for the 2001 and 2002 financial aid years. These additional
information requirements could then serve as the basis for a Ministry claim
for the return of some amounts of financial aid disbursed to students
attending these campuses. The Company's Toronto-area campus discontinued
operation and its students completed their education under an agreement
with RCC College of Technology as previously announced. Accordingly, the
Company is no longer participating in these financial aid programs. Final
discussions with the Ministry have resulted in a resolution of these claims
during the fourth quarter of fiscal year 2005 for an amount less than
CDN$80,000, for which the Company had previously accrued.

105

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary source of liquidity is the cash received from
payments for student tuition, books, educational supplies and fees. These
payments include funds originating as student and family educational loans;
other financial aid from various federal, state and provincial loan and
grant programs; and student and family financial resources.

The pattern of cash receipts during the year is somewhat cyclical. The
level of accounts receivable from which payments are collected reaches a
peak immediately after the billing of tuition, books and fees each
semester. At DeVry University, the principal undergraduate semesters begin
in July, November and March although shorter eight-week session courses are
also offered beginning in the months of September, January and May. These
shorter sessions have the effect of somewhat smoothing the cash flow peaks
throughout the year as they represent a new revenue billing and collection
cycle within the longer semester cycle. Collections of student receivables
generally reach their peak during the first half of each academic period,
reaching seventy to eighty percent of collections for that entire period.
Collections during this first part of each period exceed payments for
operating expenses applicable to that period and generally provide
sufficient cash flow for the balance of the semester's operation when
collections are lower.

Accounts receivable reach their lowest level just prior to the start of the
next semester, dropping to their lowest point during the year at the end of
June. The end of June corresponds to both the end of the undergraduate
spring semester, the end of a graduate school term and the end of a student
financial aid year, at which time substantially all financial aid for the
previous 12 months has been disbursed to students' accounts. Ross
University in the Medical and Healthcare segment experiences a similar
operating pattern but its semesters begin in May, September and January,
thus smoothing the cyclical pattern of the Company's cash flows from DeVry
University.

The Becker CPA Review operation within the Professional and Training
segment operation has historically had two major term starts per year, but
the change to an on-demand CPA exam format beginning in April 2004 has
created a new and much smoother enrollment and cash flow pattern throughout
the year than previously experienced.

At June 30, 2005, total Company accounts receivable, net of related
reserves, were approximately $39.2 million, compared to $28.2 million last

106

year. Contributing to the increased receivables was approximately $1.0
million of receivables at Deaconess College of Nursing which was not a part
of the Company last year. The higher revenues, change in business cycle
and fiscal year-end period at Becker CPA Review resulted in an
approximately $3.3 million increase in receivables compared to the period
reported last year. Higher revenues at Keller Graduate School and an
increase in the average receivable per student at the undergraduate
operations within DeVry University resulted in an approximately $8.2
million increase in receivables. The increase in accounts receivable at
DeVry University was caused by higher tuition rates with no commensurate
increase in the amount of available student financial aid, extended payment
plans to better serve the growing number of military and adult students at
DeVry and an increased proportion of part-time students whose financial aid
eligibility is less than for full-time students. Also, the shorter eight-
week session length at DeVry University Centers and online has produced a
slower collection of receivables as administrative systems and staff adjust
to the new and shorter collection cycle. Reserves for uncollectible
accounts for both undergraduate and graduate student receivables were
increased throughout the year to reflect the Company's current collection
experience on balances owed.

The Company has undertaken a number of initiatives to help improve the
collection of its student receivables. These initiatives include the
addition of a new payment processing system that allows students to
initiate payments to DeVry electronically. Electronic payments from
students may be charged to their credit card, checking or savings account.
These electronic payments are received by DeVry more quickly than if sent
by mail or delivered by the student to their teaching location. DeVry
University has also added a self-service Web site that allows students to
view their personal, up-to-date financial aid information. By allowing
students to view the status of their financial aid awards, students can
respond more quickly to additional document requests needed for further
processing and can receive messages with student-specific information.

To further help reduce the level of Company-provided interim student
financing under the DeVry University undergraduate EDUCARDr program, many
students participate in supplementary loan programs funded by private
lenders. The supplementary loans are aimed at students whose eligibility
for federal and state funded financial aid is not sufficient to cover all
their costs of education. Some of these loans are subject to a limited
Company default risk sharing agreement. At June 30, 2005, the Company had

107

fully reserved for and recognized as expense the entire amount of its share
of the default risk.

The Company is highly dependent upon the timely receipt of financial aid
funds at DeVry University, Ross University and Deaconess College of
Nursing. The Company estimates that historically, more than 60% of its
DeVry University undergraduate students' tuition, book and fee revenues
were financed by government-provided financial aid to students. Keller
Graduate School collections from student participation in federal loan
programs has increased during the past several years and is now
approximately equal to 70% of revenues. Ross University collections from
student participation in federal loan programs are approximately 70% of its
revenues, both at the medical and veterinary school. The financial aid and
assistance programs in which the Company's students participate are subject
to political and governmental budgetary considerations. There is no
assurance that such funding will be maintained in the future.

Extensive and complex regulations in the United States and Canada govern
all of the government funded financial assistance programs in which the
Company's students participate. The Company's administration of these
programs is periodically reviewed by various regulatory agencies. Any
regulatory violation could be the basis for disciplinary action, including
initiation of a suspension, limitation or termination proceeding against
the Company. Such program reviews may be conducted at any educational
institution at any time and have been conducted in the past at the
Company's educational facilities and headquarters locations. Previous
Department of Education and state regulatory agency program reviews have
not resulted in material findings or adjustments.

Under the terms of the Company's participation in governmental financial
aid programs, certain cash received from various state governments and the
U.S. Department of Education is maintained in restricted bank accounts.
These funds are received either subsequent to the completion of the
financial aid authorization and disbursement process for the benefit of the
student or just prior to that authorization. Once the authorization and
disbursement process to the student has been completed, the funds are then
available for transfer to unrestricted accounts at which time these funds
become available for use by the Company in current operations. This
process generally occurs within the period of the academic term for which
such funds were authorized, with no academic term being more than 16 weeks
in length. At June 30, 2005, cash in the amount of $13.9 million was held
in restricted bank accounts. At June 30, 2004, cash in restricted bank
accounts equaled $13.5 million.

108

In June 2004, the Company received notice from the Department of Education
that the Equity, Primary Reserve and Net Income ratios ("financial
responsibility ratio") yielded a composite score of 1.4 for the year ended
June 30, 2003. A minimum composite score of 1.5 is necessary to fulfill
the requirements of the Department's financial responsibility standards.
Effective with receipt of this notice, the Department required DeVry
University to make financial aid disbursements under a Cash Monitoring
mode. Under this Cash Monitoring, DeVry University could not submit
requests for financial aid funds for its students in an amount greater than
the amount of the actual disbursements made to students included in the
request. DeVry University has historically requested financial aid
reimbursements in a fashion similar to that imposed by this restriction
and, therefore, cash flow was not significantly affected. In late July
2004, DeVry University received notice from the Department of Education
that the restriction to operate under Cash Monitoring was suspended pending
submission of audited financial statements for the fiscal year ending June
30, 2004. Audited financial statements were subsequently submitted as
required. The Company's calculation of its composite score at June 2004
was confirmed by the Department of Education to be above the required
minimum of 1.5. The Company has calculated its composite score at June 30,
2005, and determined that it is above the required minimum of 1.5.

Cash generated from operations in fiscal 2005 was $87.6 million, compared
to $134.4 million last year. Contributing to the decrease in cash flow
from operations was lower net income, down $29.5 million from last year,
and an increase in accounts receivable, up $11.1 million, both as described
above.

Capital expenditures in fiscal 2005 were $42.9 million compared to $42.8
million in the previous year. In just the past three years, the Company
has invested over $129 million for expansion, facility improvement and the
replacement and improvement of school laboratories, teaching and
administrative equipment for its educational program offerings.

For fiscal 2006, capital expenditures are expected to be approximately the
same as it was in fiscal 2005 and the two previous years. Although there
are no new large DeVry University campus sites planned or under
construction, there are further facility expansion plans at both the Ross
University medical and veterinary schools. Other new or expanded operating
locations are expected to be in leased facilities, thus requiring less

109

capital spending by the Company. Capital spending on improvements,
including instructional technology, and expansion is an integral component
of the Company's operating strategy.

In May 2003, in conjunction with its acquisition of Ross University, the
Company terminated its $85 million revolving loan agreement with a group of
banks and entered into two new loan agreements, a revolving credit
agreement with a group of banks and senior notes held by a group of
insurance company lenders. These new loan agreements provided funding for
the Ross acquisition and for working capital needs as might be required by
the Company. Under these new agreements, all borrowings and letters of
credit issued under these agreements are through DeVry Inc. and Global
Education International ("GEI"), an international subsidiary.

In June 2004, the Company amended the revolving credit agreement with its
group of banks to extend loan maturity to July 1, 2009; reduce the interest
rate on outstanding borrowings by approximately 0.25% depending upon the
achievement of certain financial performance ratios; and increase, at the
Company's option, the borrowing limit by $75,000,000.

The current loan agreements and their borrowing limits are as follows:

Revolving Credit Agreement
- --------------------------
DeVry Inc. as Borrower $125,000,000 (can be increased by $75,000,000
at the Company's option)
GEI as Borrower 50,000,000
-----------
Total $175,000,000

Senior Notes
- ------------
DeVry Inc. as Borrower $ 75,000,000
GEI as Borrower 50,000,000
-----------
Total $125,000,000

All borrowings and letters of credit under the revolving credit facility
now mature on July 1, 2009. At June 30, 2005, aggregate borrowings under
these agreements totaled $225 million, consisting of borrowings of $100
million under the revolving credit agreement and borrowings of $125 million
under the senior notes. Based upon these levels of borrowing at fiscal
year-end, a 1.0% increase in short-term interest rates would result in
$2.25 million of additional annual interest expense.

110

At fiscal year-end, letters of credit issued under the revolving credit
agreement totaled approximately $7.9 million. Approximately $6.6 million
of these letters of credit were issued in conjunction with DeVry
University, Deaconess College of Nursing and Ross University's
participation in student financial aid programs. Most of the letters of
credit have expiration dates of one year or less. To-date, no amount has
ever been drawn under any letter of credit issued on behalf of the Company.

Under the terms of the revolving credit agreement, there are no required
repayments until the 2009 maturity date. There are also no required
repayments under the terms of the senior note agreements until their
maturity in 2010. Prepayments during the first two years of the senior
note agreements included a prepayment penalty. At June 2005, the two year
prepayment penalty period had expired.

Borrowings under the revolving credit agreement bear interest, at the
Company's discretion, at either the prime rate or a Eurodollar LIBOR rate
plus 0.75% to 1.50%, depending upon the achievement of certain financial
ratios. At June 30, 2005, the additional interest rate was 1.25%, the same
rate as at June 2004. Borrowings under the senior note agreement bear
interest at a Eurodollar LIBOR rate plus 1.25%. Both agreements include
financial and other covenants such as achieving a required fixed charge
coverage and leverage ratio of, and achieving a minimum Department of
Education financial responsibility ratio of 1.5. Covenants in the
agreement are generally similar to those typically found in other loan
agreements and are not expected to hinder the Company's plans for future
operation.

As discussed above, in June 2004 the Company received notification from the
Department of Education that the Company's financial responsibility ratio
yielded a composite score of 1.4 for the year ended June 30, 2003. This
notification created an Event of Default as defined by the revolving credit
agreement covenants that require a minimum composite score of 1.5. The
composite score as calculated by the Department of Education was affected
by the inclusion of intangible assets from the Ross University acquisition.

In June 2004, the lenders waived this default effective June 2003. The
Company's calculation of its composite score at June 2004 was confirmed by
the Department of Education to be above the required minimum of 1.5. The
Company has calculated its composite score at June 30, 2005, and determined
that it is above the required minimum of 1.5.

111

In the first quarter of fiscal 2004, the Company entered into several
interest rate cap agreements to protect approximately $100,000,000 of its
current borrowings from sharp increases in short-term interest rates upon
which its borrowings are based. These interest rate cap agreements expire
during the first quarter of the Company's new fiscal year, 2006. The
Company intends to periodically evaluate the need for future interest rate
protection in light of projected changes in interest rates and its
borrowing levels.

The Company's only long-term contractual obligations consist of its
revolving line of credit and senior notes, operating leases on facilities
and equipment, and agreements for various services. At June 30, 2005,
there were no required payments under the Company's borrowing agreements
prior to their maturity. Required payments under non-cancelable operating
leases with a term in excess of one year are $40.3 million and $37.8
million for fiscal 2006 and 2007, respectively.

The Company is not a party to any off-balance sheet financing or contingent
payment arrangements, nor are there any unconsolidated subsidiaries of the
Company. There are no loans extended to any officer, director or other
person affiliated with the Company. The Company has not entered into any
synthetic leases, and there are no residual purchase or value commitments
related to any facility lease. The Company has not entered into any
derivative, swap, futures contract, put, call, hedge or non-exchange traded
contract except for the interest rate cap agreements noted above. Under the
terms of these interest rate cap agreements, the Company was not obligated
to any further payment liability beyond their original purchase price.

As of the end of the fiscal year, the Company had posted more than $9.5
million of surety bonds to various governmental jurisdictions on behalf of
DeVry University and Becker Professional Review in the United States, and
approximately CDN $0.3 million in Canada. The surety bonds are related
primarily to its student recruiting and educational operations in those
jurisdictions. If the Company were to fail to meet its obligations in
these jurisdictions, it could be responsible for payment up to the amount
of the bond issued to that jurisdiction. To-date, no surety bond has ever
been paid in connection with the Company failing to meet its obligations.

112

A summary of the Company's contractual obligations at June 30, 2005, is
presented below:

(Dollars in Thousands)

Less Than 1-3 4-5 After
Due In Total 1 Year Years Years 5 Years
-------- --------- -------- -------- -------
Long-term Debt $225,000 $50,000 - $175,000 -
Operating Leases $287,200 $40,300 $108,300 $ 50,000 $88,600
Employment Agreement $ 6,400 - $ 2,800 $ 1,900 $ 1,700
Other Long-term
Obligations - - - - -
___________________________________________________________________________
Total Cash
Obligations $518,600 $90,300 $111,100 $226,900 $90,300

Included in the Company's consolidated cash balances of $161.8 million at
June 30, 2005, is $56.1 million of cash attributable to the Ross University
offshore operations. For the foreseeable future, it is the Company's
intention to reinvest this cash and subsequent earnings and cash flow to
service GEI's outstanding debt, improve and expand facilities and
operations of the Ross schools and pursue future business opportunities
outside the United States. In accordance with this plan, cash held by Ross
University will not be available for general Company purposes such as at
DeVry University.

The Company believes that current balances of unrestricted cash, cash
generated from operations and, if necessary, the revolving loan facility
will be sufficient to fund both its current operations and its current
growth plans for the foreseeable future, unless future investment
opportunities, similar to the acquisition of Ross University, should arise.

EFFECT OF NEW ACCOUNTING STANDARDS
- ----------------------------------
In December 2004, the FASB issued SFAS #123R entitled "Share-Based Payment"
(including stock options). This revised accounting standard requires the
recognition of compensation expense arising from share-based payments, such
as stock options. The Company currently accounts for its stock based
compensation using the intrinsic value approach of APB 25 and, in
accordance with APB 25, has not recognized compensation cost for employee
stock options to date. As required, however, disclosures relative to such

113

compensation and its pro forma effect on earnings are included in the
footnotes to the financial statements.

The new accounting standard is effective for the Company beginning with its
first quarter of fiscal 2006. The Company estimates that the additional
compensation cost to be recognized in its fiscal 2006 will be approximately
$0.05 per share. This estimate is based upon a forecast of the number of
shares subject to stock option grants during fiscal 2006 and the fair value
of these grants. The Company estimates that there will be a cumulative
effect from the change in accounting required by this new standard that
reduces Retained Earnings by approximately $12.2 million but increases
Additional Paid in Capital by approximately $3.1 million as of June 30,
2003. Had the new accounting standard been in effect during fiscal 2004,
net income in that year would have been reduced by approximately $3.5
million, or six percent from that originally reported, and earnings per
share would have been $0.77 compared to the $0.82 originally reported. For
fiscal 2005, net income would have been reduced by approximately $6.5
million, or 23% from that originally reported and earnings per share would
have been $0.31 compared to the $0.40 originally reported.

The Company expects to adopt this new accounting standard using the
retrospective method and restating previous years' financial statements
accordingly. The Company is still evaluating the effects of the proposed
new standard on its previously reported statements of income and financial
position but believes that the amounts noted above fairly present the
approximate effects of this accounting standard.

In May 2005, the FASB released SFAS #154 entitled "Accounting Changes and
Error Corrections." This new accounting standard details the manner in
which changes in accounting principle are to be recognized and disclosed.
This new standard requires retrospective application to prior periods'
financial statements for changes in accounting principle. This standard
becomes effective for the Company's fiscal year 2007. The Company is not
currently contemplating any changes in accounting principle and,
accordingly, can not determine how this new standard might effect its
future period financial statements.

114

ITEM 7A - QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
- --------------------------------------------------------------------
The nature of the Company's operations does not subject it to a
concentration or dependency upon the price levels or fluctuations in
pricing of any one particular or group of commodities.

The financial position and results of operations of Ross University's
Caribbean operations are measured using the U.S. dollar as the functional
currency. Substantially all Ross University financial transactions are
denominated in the U.S. dollar.

The financial position and results of operations of the Company's Canadian
educational programs are measured using the local currency as the
functional currency. The Canadian operations have not entered into any
material long-term contracts to purchase or sell goods and services, other
than the lease agreement on its principal teaching facility. The Company
does not have any foreign exchange contracts or derivative financial
instruments related to protection from changes in the value of the Canadian
dollar. Because the assets and liabilities of the Company's Canadian
operations are small relative to those of the Company, Canadian assets are
currently less than 2.5% of total Company assets, changes in currency value
within the range of changes recently experienced, would not have a material
effect on the Company's results of operations or financial position. Based
upon the current value of the net assets in the Canadian operations, a
change of $0.01 in the value of the Canadian dollar relative to the U.S.
dollar would result in a pre-tax translation adjustment of less than
$100,000.

The Company's customers are principally individual students enrolled in its
various educational programs. Accordingly, concentration of accounts
receivable credit risk is small relative to total revenues or accounts
receivable.

The Company's cash is held in accounts at various financial institutions.
The Company selects the financial institutions with which it maintains
deposits from amongst only those that are the largest and most financially
secure. Therefore, although the amount on deposit at a given institution
will typically exceed amounts subject to guarantee, the Company has not
experienced any deposit losses to date nor does it expect to incur such
losses in the future.

115

The interest rate on the Company's debt is based upon LIBOR interest rates
for periods typically ranging from one to three months. Based upon the
level of Company borrowings at fiscal year-end, a 1.0% increase in short-
term interest rates would result in $2.25 million of additional annual
interest expense. During July and August, the Company repaid $42 million
of its borrowings, reducing the annual effect of a 1.0% change in interest
rates to $1.83 million. However, future investment opportunities and cash
flow generated from operations may affect the level of outstanding
borrowings and the effect of a change in interest rates.

In the first quarter of fiscal 2004, the Company entered into several
interest rate cap agreements to protect a portion of its borrowings from
sharp increases in short-term interest rates. These agreements, however,
expire by the end of the first quarter of fiscal year 2006 and will no
longer afford any protection from changes in interest rates. The Company
intends to periodically review further debt repayment and the need for
additional interest rate protection agreements in light of projected
changes in working capital, investment requirements and expectations about
future period interest rates.

116

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
The following financial and supplemental schedule statements of the Company
and its subsidiaries are included below on pages 119 through 160 of this
report:
10K
Report Page
-----------
Consolidated Balance Sheets at
June 30, 2005 and 2004 119 - 120

Consolidated Statements of Income for the
years ended June 30, 2005, 2004 and 2003 121

Consolidated Statements of Cash Flows for
the years ended June 30, 2005, 2004 and 2003 122

Consolidated Statements of Shareholders'
Equity for the years ended June 30, 2005,
2004 and 2003 123

Notes to Consolidated Financial Statements 124 - 157

Schedule II. - Valuation and Qualifying Accounts 158

Report of Independent Registered Public Accounting Firm 159 - 160

Schedules other than the one listed above are omitted for the reason that
they are not required or are not applicable, or the required information is
shown on the financial statements or notes thereto.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- ------------------------------------------------------------------------
None.

ITEM 9A - CONTROLS AND PROCEDURES
- ---------------------------------
CEO and CFO Certificates
- ------------------------
The required compliance certificates signed by the Company's CEO and CFO
are included as Exhibits 31 and 32 of this Annual Report on Form 10-K.

Disclosure Controls and Procedures
- ----------------------------------
Disclosure controls and procedures are designed to help ensure that all the
information required to be disclosed in our reports filed with the SEC is

117

recorded, processed, summarized and reported within the time periods
specified by the appropriate rules.

The Company has appointed a Senior Vice President and Chief Compliance
Officer to oversee all of its regulatory affairs, internal controls and
compliance efforts, including those related to disclosure controls and
procedures and those relating to internal control over financial reporting.
In addition, the Company has recently hired a Corporate Compliance Officer,
reporting to this Senior Vice President to further enhance its efforts in
these important areas. The Company has also engaged independent
professional internal audit resources in addition to its own internal
resources to assist in the testing and review that lead to the assessment
of internal controls.

Evaluations required by Rule 13a - 15 of the Securities Exchange Act of
1934 of the effectiveness of the Company's disclosure controls and
procedures as of the end of the period covered by this Report have been
carried out under the supervision and with the participation of the
Company's management, including its Chief Executive Officer and its Chief
Financial Officer. Based upon these evaluations, the Chief Executive
Officer and Chief Financial Officer have concluded that the Company's
disclosure controls and procedures were effective as required, and have
attested to this in Exhibit 31 of this Report.

Management's Report on Internal Control Over Financial Reporting
- ----------------------------------------------------------------
The management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting, as defined
by Rule 13a - 15(f) of the Securities Exchange Act. Because of its
inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

As of June 30, 2005, the Company's management has assessed the
effectiveness of its internal control over financial reporting, using the
criteria embodied by the Committee of Sponsoring Organizations of the
Treadway Commission's 1992 report Internal Control - Integrated Framework.
Based upon this assessment, the Company concluded that as of June 30, 2005,
its internal control over financial reporting was effective based upon
these criteria.

118

Our management's assessment of the effectiveness of the Company's internal
control over financial reporting as of June 30, 2005 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting
firm, as stated in their report which appears herein.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
- ----------------------------------------------------
There were no changes in internal control over financial reporting
identified in connection with the evaluation referred to above that
occurred during the fourth quarter of fiscal year 2005 that materially
affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

ITEM 9B - OTHER INFORMATION
- ---------------------------
None.

119

DEVRY INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

June 30,
2005 2004
-------- --------

ASSETS:

Current Assets:

Cash and Cash Equivalents $161,823 $146,227
Restricted Cash 13,935 13,457
Accounts Receivable, Net 39,226 28,150
Inventories 164 3,281
Deferred Income Taxes 17,142 7,619
Prepaid Expenses and Other 10,048 10,141
------- -------
Total Current Assets 242,338 208,875
------- -------
Land, Buildings and Equipment:

Land 68,013 64,256
Buildings 212,428 203,651
Equipment 234,201 222,898
Construction In Progress 15,813 6,214
------- -------
530,455 497,019

Accumulated Depreciation and Amortization (243,688) (210,132)
------- -------
Land, Buildings and Equipment, Net 286,767 286,887
------- -------
Other Assets:

Intangible Assets, Net 73,699 86,346
Goodwill 289,308 284,397
Perkins Program Fund, Net 13,290 12,247
Other Assets 4,633 5,380
------- -------
Total Other Assets 380,930 388,370
------- -------
TOTAL ASSETS $910,035 $884,132
======= =======

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

120

DEVRY INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

June 30,
2005 2004
-------- --------

LIABILITIES:

Current Liabilities:

Current Portion of Revolving Loan $ 50,000 $ 35,000
Accounts Payable 30,681 27,349
Accrued Salaries, Wages and Benefits 34,071 31,041
Accrued Expenses 34,462 24,610
Advance Tuition Payments 14,685 16,819
Deferred Tuition Revenue 22,823 21,830
------- -------
Total Current Liabilities 186,722 156,649
------- -------
Other Liabilities:

Revolving Loan 50,000 90,000
Senior Debt 125,000 125,000
Deferred Income Taxes 21,408 17,660
Accrued Post-employment Agreements 6,352 3,679
Deferred Rent and Other 12,629 12,887
------- -------
Total Other Liabilities 215,389 249,226
------- -------
TOTAL LIABILITIES 402,111 405,875
------- -------
COMMITMENTS & CONTINGENCIES (Note 11)

SHAREHOLDERS' EQUITY:

Common Stock, $0.01 Par Value, 200,000,000
Shares Authorized,70,475,000 and
70,331,000 shares Outstanding
at June 30, 2005 and 2004, Respectively 706 704
Additional Paid-in Capital 73,372 71,797
Retained Earnings 433,580 405,036
Accumulated Other Comprehensive Income 266 720
------- -------
TOTAL SHAREHOLDERS' EQUITY 507,924 478,257
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $910,035 $884,132
======= =======

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

121

DEVRY INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except for Per Share Amounts)
(Unaudited)

For The Year Ended
June 30,
-----------------------------
2005 2004 2003
-----------------------------

REVENUES:

Tuition $737,132 $737,546 $628,326
Other Educational 43,530 47,173 50,810
Interest 642 166 443
------- ------- -------
Total Revenues 781,304 784,885 679,579
------- ------- -------
COSTS AND EXPENSES:

Cost of Educational Services 437,345 420,108 366,075
Student Services and
Administrative Expense 300,165 275,587 225,767
Interest Expense 9,047 7,834 1,280
------- ------- -------
Total Costs and Expenses 746,557 703,529 593,122
------- ------- -------
Income Before Income Taxes and
Cumulative Effect of Change
in Accounting 34,747 81,356 86,457

Income Tax Provision 8,013 23,295 33,459
Non-recurring Tax Benefit - - (8,150)
------- ------- -------
Income Before Cumulative Effect
of Change in Accounting 26,734 58,061 61,148

Cumulative Effect of Change in
Accounting, Net of Tax 1,810 - -
------- ------- -------
NET INCOME $ 28,544 $ 58,061 $ 61,148
======= ======= =======

EARNINGS PER COMMON SHARE
Basic
Income Before Cumulative
Effect of Change in Accounting $0.38 $0.83 $0.87
Cumulative Effect of Change
in Accounting 0.03 - -
----- ----- -----
Net Income $0.41 $0.83 $0.87
===== ===== =====

Diluted
Income Before Cumulative
Effect of Change in Accounting $0.38 $0.82 $0.87
Cumulative Effect of Change
in Accounting 0.02 - -
----- ----- -----
Net Income $0.40 $0.82 $0.87
===== ===== =====

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

122

DEVRY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

For The Year Ended June 30,
----------------------------
2005 2004 2003
-------- -------- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 28,544 $ 58,061 $ 61,148
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:

Depreciation 42,353 40,836 37,758
Amortization 15,213 14,748 2,574
Provision for Refunds and
Uncollectible Accounts 43,521 35,495 34,501
Deferred Income Taxes (5,775) 5,470 8,940
Loss on Disposals of Land, Buildings
and Equipment 803 439 263
Changes in Assets and Liabilities, Net of
Effects from Acquisitions of Businesses:
Restricted Cash (412) 595 6,206
Accounts Receivable (54,267) (39,340) (23,633)
Inventories 3,131 1,034 592
Prepaid Expenses And Other 2,153 (3,153) (3,070)
Perkins Program Fund Contribution
and Other (764) 654 (1,114)
Accounts Payable 2,852 8,483 (2,132)
Accrued Salaries, Wages,
Expenses and Benefits 12,465 (685) 2,061
Advance Tuition Payments (2,299) 6,251 (6,997)
Deferred Tuition Revenue 40 5,539 (16,904)
------- ------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 87,558 134,427 100,193
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (42,909) (42,808) (43,762)
Payments for Purchases of Businesses, Net
of Cash Acquired (4,861) (1,493) (295,908)
------- ------- -------
NET CASH USED IN INVESTING ACTIVITIES (47,770) (44,301) (339,670)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 1,091 2,631 404
Proceeds from Revolving Credit Facility 45,000 25,000 165,000
Repayments Under Revolving Credit Facility (70,000) (65,000) -
Proceeds from Senior Note Issuance - - 125,000
------- ------- -------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES (23,909) (37,369) 290,404

Effects of Exchange Rate Differences (283) (1) 29
------- ------- -------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 15,596 52,756 50,956

Cash and Cash Equivalents at Beginning
of Year 146,227 93,471 42,515
------- ------- -------
Cash and Cash Equivalents at End of Year $161,823 $146,227 $ 93,471
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest Paid During the Year $7,063 $7,091 $662
Income Taxes Paid During the Year, Net 7,450 22,471 17,373

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

123

DEVRY INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in Thousands)

Common Stock
------------------- Accumulated
Additional Other
Amount Paid-in Retained Comprehensive
$.01 Par Capital Earnings Income Total
------------------ -------- ----------- --------

Balance at June 30, 2002 $700 $66,345 $285,827 $674 $353,546
Comprehensive Income:
Net Income in 2003 61,148 61,148
Foreign Currency
Translation 29 29
-------
Comprehensive Income 61,177
-------
Proceeds from Exercise
of Stock Options 1 403 404

Tax Benefit from Exercise
of Stock Options 540 540
---------------------------------------------------
Balance at June 30, 2003 701 67,288 346,975 703 415,667

Comprehensive Income:
Net Income in 2004 58,061 58,061
Change in Fair Value
of Interest Rate
Hedge 18 18
Foreign Currency
Translation (1) (1)
-------
Comprehensive Income 58,078
-------
Proceeds from Exercise
of Stock Options 3 2,628 2,631

Tax Benefit from Exercise
of Stock Options 1,881 1,881
---------------------------------------------------
Balance at June 30, 2004 704 71,797 405,036 720 478,257

Comprehensive Income:
Net Income in 2005 28,544 28,544
Change in Fair Value
of Interest Rate
Hedge (30) (30)
Foreign Currency
Translation (424) (424)
-------
Comprehensive Income 28,090
-------
Proceeds from Exercise
of Stock Options 2 1,089 1,091

Tax Benefit from Exercise
of Stock Options 486 486
---------------------------------------------------
Balance at June 30, 2005 $706 $73,372 $433,580 $266 $507,924
===================================================

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

124

DEVRY INC.
Notes to Consolidated Financial Statements

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
- --------------------
DeVry Inc. (the Company), through its wholly owned subsidiaries,
including DeVry University, Dominica Management, Inc. (DMI),
Becker CPA Review Corp. and Ross University School of Nursing &
Health Sciences operates an international system of degree-
granting, career-oriented higher education schools and a leading
international training firm.

DeVry University is one of the largest regionally accredited
higher education systems in North America, offering both
undergraduate and graduate programs. Its DeVry undergraduate
operations award associate and bachelor's degrees in
electronics, computer information systems and technology,
biomedical engineering technology, business administration,
technical management, and network and communications
management. The undergraduate programs are offered at 22 large
campus locations and 46 smaller teaching centers located in
conjunction with graduate program teaching sites, all in the
United States; at one campus location in Canada; and through
DeVry University Online. Several new U.S. teaching centers are
scheduled to open in fiscal 2006. The University's Keller
Graduate School of Management awards master's degrees in
business administration, accounting and financial management,
information systems management, human resource management,
project management, public administration and telecommunications
management. At June 30, 2005, graduate school programs were
offered at 70 locations in the United States, and through the
Online Education Center. Several additional locations are
scheduled to open in fiscal 2006.

DMI operates the Ross University School of Medicine and the Ross
University School of Veterinary Medicine (collectively referred
to as Ross University), with campuses in the Caribbean countries
of Dominica and St. Kitts/Nevis, respectively. Ross students
complete their basic science curriculum in modern, fully
equipped campuses in the Caribbean and complete their clinical
education in U.S. teaching hospitals and veterinary schools
under affiliation with Ross.

Becker Professional Review (Becker) is a leading international
training firm preparing students to pass the Certified Public
Accountant (CPA) and Chartered Financial Analyst (CFA) exams.
Currently, the CPA exam review course is offered at
approximately 300 locations worldwide.

Ross University School of Nursing & Health Sciences operates the
Deaconess College of Nursing (Deaconess). Located in St. Louis,
Missouri, Deaconess offers associate and bachelor's degree programs in
nursing. In addition, Deaconess offers a bachelor's degree completion
program designed for registered nurses who have previously completed
an associate degree program. Non-clinical coursework is offered both
on campus and online.
125

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Principles of Consolidation
- ---------------------------
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation. Unless indicated, or the
context requires otherwise, references to years refer to the Company's
fiscal years then ended.

Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents can include time deposits, commercial paper,
municipal bond funds and bankers acceptances with original maturities
of three months or less or that are highly liquid and readily convertible
to a known amount of cash. These investments are stated at cost, which
approximates market, due to their short duration or liquid nature. The
Company limits the amount of credit exposure with any one investment
instrument or with any one financial institution except for the
concentration of balances at three of the Company's principal depository
and disbursement banks to maximize cash availability and efficiency of
operation. Net cash balances on deposit with these banks were
approximately $58 million, $47 million and $38 million at June 30, 2005,
and $66 million, $42 million and $15 million at June 30, 2004.

The Company periodically evaluates the creditworthiness of the security
issuers and financial institutions with which it invests and maintains
deposits.

Financial Aid and Restricted Cash
- ---------------------------------
Financial aid and assistance programs, in which most DeVry University,
Ross University and Deaconess students participate, are subject to
political and governmental budgetary considerations. There is no
assurance that such funding will be maintained at current levels.
Extensive and complex regulations in the United States and Canada
govern all of the government financial assistance programs in which
students participate. Administration of these programs is
periodically reviewed by various regulatory agencies. Any regulatory
violation could be the basis for disciplinary action, including the
initiation of a suspension, limitation or termination proceeding.

A significant portion of revenues is received from students who participate
in government financial aid and assistance programs. Restricted cash
represents amounts received from the United States and state
governments under various student aid grant and loan programs. Restricted
funds are held in separate bank accounts. These funds are either received
subsequent to the completion of the authorization and disbursement process
for the benefit of the student or just prior to that authorization. Once the
authorization and disbursement process to the student has been
completed, the funds are transferred to unrestricted accounts, and
these funds then become available for use in current operations. This
transfer generally occurs within the period of the academic term for
which such funds were authorized, with no term being more than 16
weeks in length.
126

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition
- -------------------
DeVry University tuition and technology fee revenues are
recognized ratably on a straight-line basis over the applicable
academic term. Ross University basic science curriculum revenues
are recognized ratably on a straight-line basis over the
academic terms. The clinical portion of their education program
is conducted under the supervision of the U.S. teaching
hospitals and veterinary schools. The Company is responsible
for the billing and collection of tuition from Ross University
students during the period of clinical education. Revenues are
recognized on a weekly basis based on actual education program
attendance during the period of the clinical program. Fees paid
to the hospitals and veterinary schools for supervision of Ross
University students are charged to expense on the same basis.
Deaconess tuition and fee revenues are recognized ratably on a
straight-line basis over the applicable academic term. The
provision for refunds, which is reported as a reduction to
Tuition Revenue in the Consolidated Statements of Income, and
the provision for uncollectible accounts, which is included in
the Cost of Educational Services in the Consolidated Statements
of Income, also are recognized in the same straight-line fashion
as revenue to most appropriately match these costs with the
tuition revenue in that term.

Estimates of the Company's expected exposure to refunds are determined
at the onset of each academic term, based upon actual experience in
previous terms, and monitored and adjusted as necessary within the
term. If a student leaves school prior to completing a term, federal,
state and Canadian provincial regulations and accreditation criteria
permit the Company to retain only a set percentage of the total
tuition received from such student, which varies with, but generally
equals or exceeds, the percentage of the term completed by such
student. Payment amounts received by the Company in excess of such
set percentages of tuition are refunded to the student or the
appropriate funding source. All refunds are charged against revenue
during the applicable academic term. Reserves for uncollectible
accounts are analyzed periodically in light of current collection and
loss experience. Related reserves with respect to uncollectible
accounts and refunds were $29,088,000 and $19,341,000 at June 30, 2005
and June 30, 2004, respectively.

Textbook sales and other educational product sales, including training
services and the Becker CD-ROM product, are included in Other
Educational Revenues in the Consolidated Statements of Income.
Textbook and other educational product revenues are recognized when the
sale occurs, generally at the start of each academic term. Revenue from
training services, which are generally short-term in duration, is recognized
when the training service is provided. Also included in Other Educational
Revenues are receivable interest billings from various student-deferred
tuition payment plans. Interest charges are generally billed monthly and
are recognized when billed. In addition, fees from international licensees
of the Becker programs are included in Other Educational Revenues and
recognized into income when payment is received.
127

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition, continued
- ------------------------------
The Company defers DeVry University enrollment fee revenue. This
deferred revenue will be recognized in subsequent periods as student
services are provided. Additionally, the Company has elected to defer
certain direct costs of activities associated with these fees, limited
to the extent of the revenue deferral. These costs are subsequently
amortized over the periods in which student services are provided.
These deferred costs were $398,000 and $281,000 at June 30, 2005 and 2004,
respectively. Since changes to the deferrals involve the recording of
equivalent amounts of revenues and costs, net income is not affected.
Similar enrollment fee revenue deferrals are recorded at Ross University
and Becker.

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

Land, Buildings and Equipment
- -----------------------------
Land, buildings and equipment are recorded at cost. Cost includes additions
and those improvements that increase the capacity or lengthen the useful
lives of the assets. Repairs and maintenance costs are expensed as
incurred. Upon sale or retirement of an asset, the accounts are
relieved of the cost and the related accumulated depreciation, with
any resulting profit or loss included in income in the period
incurred. Assets under construction are reflected in Construction in
Progress until they are ready for their intended use. Interest
is capitalized as a component of cost on major projects during the
construction period.

Leasehold improvements are amortized using the straight-line method over the
term of the lease or the estimated useful life of the asset, whichever
is shorter. Leased property meeting certain criteria is capitalized,
and the present value of the related lease payments is recorded as a
liability. Amortization of capitalized leased assets is computed on the
straight- line method over the term of the lease or the life of the related
asset, whichever is shorter.

Depreciation is computed using the straight-line method over estimated
service lives. These lives range from five to 31 years for buildings and
leasehold improvements, and from three to eight years for equipment.
128

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Business Combinations, Intangible Assets and Goodwill
- -----------------------------------------------------
Intangible assets relate mainly to acquired business operations
(see "Note 2-Business Combinations"). These assets consist of the
fair value of certain identifiable assets acquired. Goodwill
represents the excess of the purchase price over the fair value of
assets acquired and liabilities assumed.

Statement of Financial Accounting Standards No. 142 entitled
"Goodwill and Other Intangible Assets" ("SFAS 142) provides that
goodwill and indefinite-lived intangibles arising from a business
combination are not amortized and charged to expense over time.
Instead, goodwill and indefinite-lived intangibles must be
reviewed annually for impairment, or more frequently if
circumstances arise indicating potential impairment. This
impairment review was completed at the end of fiscal 2005. For
goodwill, if the carrying amount of the reporting unit containing
the goodwill exceeds the fair value of that reporting unit, an
impairment loss is recognized to the extent the "implied fair
value" of the reporting unit goodwill is less than the carrying
amount of the goodwill.

For indefinite-lived intangible assets, if the carrying amount
exceeds the fair value, an impairment loss shall be recognized in
an amount equal to that excess. See "Note 3-Intangible Assets"
for results of the Company's required impairment analysis of its
intangible assets and goodwill.

Intangible assets with finite lives are amortized over their
expected economic lives, generally five to 15 years.
Amortization of all intangible assets and certain goodwill is
being deducted for tax reporting purposes over statutory lives.

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

Perkins Program Fund
- --------------------
DeVry University is required, under federal aid program regulations,
to make contributions to the Perkins Student Loan Fund, currently at a
rate equal to 33% of new contributions by the federal government. As
previous borrowers repay their Perkins loans, their payments are used to
fund new loans, thus creating a revolving loan fund. The Company carries
its investment in such contributions at original values, net of allowances
for expected losses on loan collections, of $2,722,000 and $3,031,000 at
June 30, 2005 and 2004, respectively. The allowance for future loan losses
is based upon an analysis of actual loan losses experienced since the
inception of the program. The federal contributions to this revolving loan
129

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Perkins Program Fund, continued
- -------------------------------
program do not belong to the Company and are not recorded on the Company's
financial statements. Upon termination of the program by the federal
government or withdrawal from future participation by DeVry
University, subsequent student loan repayments would be divided
between the federal government and DeVry University in proportion to
their relative cumulative contributions to the fund.

Internal Software Development Costs
- -----------------------------------
The Company capitalizes certain internal software development costs that are
amortized using the straight-line method over the estimated lives of the
software, not to exceed five years. Capitalized costs include external
direct costs of materials and services consumed in developing or obtaining
internal-use software, and payroll-related costs for employees directly
associated with the internal software development project. Capitalization
of such costs ceases at the point at which the project is substantially
complete and ready for its intended purpose. Capitalized software
development costs for projects not yet complete, which are included as
equipment in the Land, Buildings and Equipment section of the Consolidated
Balance Sheets, were $3,120,000 as of June 30, 2004. There were no such
capitalized costs at June 30, 2005. The gross capitalized software
development costs for completed projects, which are also included as
Equipment in the Land, Building and Equipment section of the Consolidated
Balance Sheets, were $20,605,000, $16,962,000 and $2,305,000 at
June 30, 2005, 2004, and 2003, respectively.

Fair Value of Financial Instruments
- -----------------------------------
The carrying amounts reported in the Consolidated Balance Sheets for cash and
cash equivalents, restricted cash, accounts receivable, accounts payable,
accrued expenses, and advanced and deferred tuition payments approximate fair
value because of the immediate or short-term maturity of these
financial instruments. All of the Company's long-term debt (see "Note
6-Long-Term Debt") bears interest at a floating rate reset to current
rates on a periodic basis not currently exceeding six months. Therefore,
the carrying amount of the Company's long-term debt approximates fair value.

Foreign Currency Translation
- ----------------------------
The financial position and results of operations of Ross University's
Caribbean operations are measured using the U.S. dollar as the
functional currency. As such, there is no translation gain or loss
associated with these operations. The financial position and results
of operations of the Company's Canadian operations are measured using
the local currency as the functional currency. Assets and liabilities
of the Canadian operations are translated to U.S. dollars using
exchange rates in effect at the balance sheet dates. Income and expense
items are translated at monthly average rates of exchange. The resultant
translation adjustments are included in the component of Shareholders'
Equity designated as Accumulated Other Comprehensive Income. Transaction
gains or losses during the years ended June 30, 2005, 2004 and 2003 were
not material.
130

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes
- ------------
Income taxes are provided by applying statutory rates to income recognized
for financial statement purposes. Deferred income taxes are provided for
temporary differences between the financial reporting and income tax bases
of assets and liabilities. Effects of statutory rate changes are recognized
for financial reporting purposes in the year in which enacted by law.
The Ross University operating subsidiaries on Dominica and St.
Kitts/Nevis have agreements with their respective governments that
exempt them from local income taxation through the years 2043 and
2023, respectively. Also, for the foreseeable future, the Company
intends to reinvest existing cash balances, subsequent earnings and
cash flow in Ross University or other business opportunities outside
the United States. Accordingly, no provision for current income taxes
is being recorded.

Guarantees
- ----------
Under its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences while the officers or
directors are performing at the Company's request in such capacity.
The indemnification agreement period is for an officer's or
director's lifetime. The maximum potential amount of future payments
the Company could be required to make under these indemnification
agreements is unlimited; however, the Company has a director and
officer liability insurance policy that limits its exposure and
enables it to recover a portion of any future amounts paid. As a
result of its insurance policy coverage, the Company believes the
estimated fair value of these indemnification agreements is minimal.
The Company has no liabilities recorded for these agreements of
June 30, 2005 and 2004.

Derivative Instruments and Hedging Activities
- ---------------------------------------------
The Company uses derivative financial instruments to manage its
exposure to movements in interest rates. The use of these financial
instruments modifies the exposure of these risks with the intent to
reduce the risk to the Company. The Company does not use financial
instruments for trading purposes, nor does it use leveraged financial
instruments. Credit risk related to the derivative financial
instruments is considered minimal and is managed by requiring periodic
settlements and high credit standards for its counterparties.
All derivative contracts are reported at fair value, with changes in
fair value reported in earnings or deferred, depending on the nature
and effectiveness of the offset or hedging relationship. Any
ineffectiveness in a hedging relationship is recognized immediately
into earnings.

During the first quarter of fiscal 2004, the Company entered into
several interest rate cap agreements to protect approximately
$100,000,000 of its current borrowings from sharp increases in
short-term interest rates upon which its borrowings are based.
These agreements will expire during the first quarter
131

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Derivative Instruments and Hedging Activities, continued
- --------------------------------------------------------
of fiscal 2006. The Company intends to periodically evaluate the
need for interest rate protection in light of projected changes in
interest rates and borrowing levels. These interest rate cap
agreements are designated as cash flow hedging instruments and are
intended to protect the portion of the Company's debt that is
covered by these agreements from increases in short-term interest
rates above 3.5%.

These cap agreements were purchased at fair market values totaling
$568,000. This cost was capitalized and is being amortized to earnings
and recorded as interest expense over the 24-month term of the
agreements. Differences between the changes in fair value of the
interest rate caps and the amount being amortized to earnings are
reported as a component of Other Comprehensive Income. These amounts
are being reclassified and recognized into earnings over the 24-month
term of the agreements. As of June 30, 2005, a $12,000 loss is recorded
as Other Comprehensive Income in the Consolidated Balance Sheet. This
represents the cumulative difference between the decline in the fair
market value of the interest rate caps of $507,000 and the $495,000
expensed as interest during the term of the agreements. A loss of
$30,000 and a gain of $18,000 were recorded as Other Comprehensive
Income for the years ended June 30, 2005 and 2004, respectively.
Interest expense of $405,000 and $90,000 was charged to earnings for
these interest rate caps for the years ended June 30, 2005 and 2004,
respectively. For the year ended June 30, 2005 and 2004, there was no
ineffectiveness related to these agreements.

Earnings per Common Share
- -------------------------
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Shares used in
this computation were 70,383,000, 70,142,000 and 69,942,000 in 2005, 2004 and
2003, respectively. Diluted earnings per share is computed by dividing
net income by the weighted average number of shares assuming dilution.
Dilutive shares are computed using the Treasury Stock Method and
reflect the additional shares that would be outstanding if dilutive
stock options were exercised during the period. Shares used in this
computation were 70,591,000, 70,757,000 and 70,336,000 in 2005, 2004
and 2003, respectively. Excluded from the June 30, 2005, 2004 and
2003 computations of diluted earnings per share were options to
purchase 2,915,000, 1,107,000 and 1,260,000 shares of common stock,
respectively. These outstanding options were excluded because the
option exercise prices were greater than the average market price of
the common shares; thus, their effect would be anti-dilutive.

Use of Estimates
- ----------------
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the amounts of revenues and expenses during the
reported period. Actual results could differ from those
estimates.
132

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based Compensation
- ------------------------
During fiscal 2005, the Company granted options at fair market value to
purchase up to 1,456,000 shares of the Company's common stock under the
1999 and 2003 Stock Incentive Plans (See Note 9). Of these grants,
approximately 668,000 vest over the next 3 to 5 years. The remaining 788,000
were granted in the fourth quarter and were immediately vested.

For the year ended June 30, 2005, the Company elected to continue to
account for its stock-based awards under the intrinsic value method in
accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB Opinion No. 25"), and
has provided the pro forma disclosures as required by FASB Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), and FASB Statement Of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition
and Disclosure-An Amendment of FASB Statement No. 123" ("SFAS 148")
for the years ended June 30, 2005, 2004 and 2003 below. Under this
method, the Company generally recognizes no compensation expense with
respect to such awards, since the exercise price of the common stock
options awarded is equal to the fair market value of the underlying
security on the date of the grant.

Pro forma information regarding net income and earnings per share is
required by SFAS 123 for awards granted after June 30, 1995, as if the
Company had accounted for its stock-based awards under the fair value
method of SFAS 123. Prior to fiscal 2005, the fair value of the
Company's stock-based awards was estimated as of the date of grant
using the Black-Scholes option pricing model ("Black-Scholes model").
The Black-Scholes model was developed to estimate the fair value of
freely tradable, fully transferable options without vesting
restrictions, which significantly differ from the Company's stock
option awards. This model also requires highly subjective assumptions,
including future stock price volatility and expected time until
exercise, which greatly affect the calculated grant date fair value.

Beginning with all options granted in the first quarter of fiscal
2005, the fair value of the Company's stock-based awards is estimated
using a binomial model. This model uses the Company's actual
cancellation and historical exercise experience to determine the
option value. It also takes into account the illiquid nature of
employee options during the vesting period, something that the Black-
Scholes model does not consider. For these reasons, Company management
believes that the binomial model provides a fair value that is more
representative of actual experience and future expected experience
than the value calculated in previous years using the Black-Scholes
model.

The weighted average estimated grant date fair values, as defined by
SFAS 123, for options granted at market price under the Company's
stock option plans during fiscal 2005, 2004 and 2003 was $7.87, $17.07
and $10.62, per share, respectively. The fair values of the Company's
stock option awards were estimated assuming no expected dividends and
the following weighted average assumptions:

2005 2004 2003
---- ---- ----
Expected Life (in Years) 5.42 7.50 7.50
Expected Volatility 41.35% 58.16% 56.25%
Risk-free Interest Rate 3.82% 3.75% 3.80%
Pre-vesting Forfeiture Rate 1.88% - -

133

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based Compensation, continued
- -----------------------------------
The use of a pre-vesting forfeiture rate is optional under SFAS 123;
however, it is an important element of option valuation and,
accordingly, has been included in option valuation using the binomial
model.

The following table illustrates the effect on net income and earnings
per share if the Company had applied the fair value recognition
provisions of SFAS 123, to stock-based employee compensation. The
change from the Black-Scholes valuation model to a binomial model had
no significant effect on the pro forma amounts presented below.

(dollars in thousands except for per share amounts)

2005 2004 2003
---- ---- ----

Net Income as Reported $28,544 $58,061 $61,148

Stock-based employee compensation
expense had the fair value method
been applied to all options
awarded, net of income tax (6,532) (3,447) (2,761)
------ ------ ------
Pro Forma Net Income $22,012 $54,614 $58,387
====== ====== ======

Earnings per Common Share:

Basic as Reported $0.41 $0.83 $0.87

Stock-based employee compensation
expense had the fair value method
been applied to all options
awarded, net of income tax (0.10) (0.05) (0.04)
---- ---- ----
Pro Forma Basic $0.31 $0.78 $0.83
==== ==== ====

Diluted as Reported $0.40 $0.82 $0.87

Stock-based employee compensation
expense had the fair value method
been applied to all options
awarded, net of income tax (0.09) (0.05) (0.04)
---- ---- ----
Pro Forma Diluted $0.31 $0.77 $0.83
==== ==== ====

Prior to the third quarter of fiscal 2005, the company accounted for
options granted to retirement eligible employees that vest upon an
employees' retirement under the nominal vesting approach. This
approach recognized pro forma compensation cost over the vesting
period of the option. In the third quarter of fiscal 2005, the Company
134

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based Compensation, continued
- -----------------------------------
began applying the non-substantive vesting period approach to these options.
Under this approach, pro-forma compensation cost is recognized at the grant
date for options issued to retirement eligible employees where the
options vest upon retirement. This approach was retroactively applied
to all such options granted and it resulted in an immaterial
adjustment in the pro forma disclosures.

In December 2004, the FASB issued SFAS #123R entitled "Share-Based
Payment" (including stock options). This revised accounting standard
requires the recognition of compensation expense arising from share-
based payments, such as stock options. The Company currently accounts
for its stock based compensation using the intrinsic value approach of
APB 25 and, in accordance with APB 25, has not recognized compensation
cost for employee stock options to date. As required, however,
disclosures relative to such compensation and its pro forma effect on
earnings are disclosed above.

The new accounting standard is effective for the Company beginning
with its first quarter of fiscal 2006. The Company estimates that the
additional compensation cost to be recognized in its fiscal 2006 will
be approximately $0.05 per share. This estimate could be affected by
changes from current expectations for future stock option grants that
may be issued during fiscal 2006. The Company estimates that there
will be a cumulative effect from the change in accounting required by
this new accounting standard that reduces Retained Earnings by
approximately $12.2 million but increases Additional Paid in Capital
by approximately $3.1 million as of June 30, 2003. Had the new
accounting standard been in effect during fiscal 2003, 2004 and 2005,
net income and earnings per share would not be materially different
from that reported in the pro forma disclosure above.

The Company expects to adopt this new accounting standard using the
retrospective method and restating previous years' financial
statements accordingly. The Company is still evaluating the effects
of the proposed new standard on its previously reported statements of
income and financial position but believes that the amounts noted
above fairly present the approximate effects of this accounting
standard.

Comprehensive Income
- --------------------
The differences between changes in the fair values of the cash flow
hedging instruments described above in "Derivative Instruments and
Hedging Activities", and the amount of these instruments being
amortized to earnings are reported as a component of Comprehensive
Income. The amount recorded in Other Comprehensive Income is a loss
of $30,000 for the year ended June 30, 2005 and a gain of $18,000 for
the year ended June 30, 2004. The Company's only other item that meets
the definition for adjustment to arrive at Comprehensive Income is the
change in cumulative translation adjustment. The amounts recorded in
Other Comprehensive Income for the changes in translation rates were a
loss of $424,000 for the year ended June 30, 2005 and a loss of $1,000
for the year ended June 30, 2004.
135

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Comprehensive Income, continued
- -------------------------------
The Accumulated Other Comprehensive Income balance at June 30, 2005,
is composed of a $12,000 loss related to the cash flow hedge and a
cumulative translation gain of $278,000. At June 30, 2004, this
balance is composed of a $18,000 gain related to the cash flow hedge
and a cumulative translation gain of $702,000.

Advertising Expense
- -------------------
Advertising expenses are recognized as expense in the period in
which materials are purchased or services are performed.

NOTE 2: CHANGE IN ACCOUNTING - CHANGED FISCAL YEAR OF SUBSIDIARY

Prior to July 1, 2004, the accounts of Becker Professional Review
were consolidated based on an April 30 fiscal year end, which
management believed was its natural year-end based on its then
business cycle. As a result of a change in the CPA exam schedule,
the Company has aligned the Becker fiscal year end to that of DeVry
Inc. The results of operations for the two-month period from May 1,
2004 through June 30, 2004, are included as a cumulative effect of
change in accounting in the Consolidated Statements of Income for
the first quarter of fiscal 2005. The cumulative effect of this
change in accounting added $1,810,000, or $0.02 per share to net
income for the first quarter. This amount is net of income tax
expense of $1,189,000.

Net Income and basic and diluted earnings per share for the years
ended June 30, 2005, 2004 and 2003 are set forth below as if the
consolidation of the Becker operations had been accounted for in the
same manner for all periods presented.

Proforma
(In Thousands)
Year Ended June 30,
-----------------------------------
2005 2004 2003
---- ---- ----
Net Income $26,734 $58,958 $61,074
Earnings per Share
Basic $0.38 $0.84 $0.87
Diluted $0.38 $0.83 $0.87

NOTE 3: BUSINESS COMBINATIONS

Deaconess College of Nursing
- ----------------------------
On March 24, 2005, Ross University School of Nursing and Health
Sciences, a newly formed, wholly owned subsidiary of the Company,
acquired the operations of Deaconess College of Nursing (Deaconess)
for $5,391,000 in cash, subject to purchase price adjustments. Funding
was provided from the Company's existing operating cash balances. The
results of Deaconess' operations have been included in the
consolidated financial statements of the Company since the date of
acquisition.
136

NOTE 3: BUSINESS COMBINATIONS (continued)

Deaconess College of Nursing, continued
- ---------------------------------------
Located in St. Louis, Missouri, Deaconess had approximately 450
students enrolled at the date of purchase and offers associate and
bachelor's degree programs in nursing. In addition, Deaconess offers
a bachelor's degree completion program designed for registered nurses
who have previously completed an associate degree program. Classes are
offered days, evenings and weekends with non-clinical coursework offered
both on campus and online. The addition of Deaconess will further
diversify the Company's curricula.

The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.

At March 24, 2005
(In Thousands)

Current Assets $ 659
Property and Equipment 37
Intangible Assets 1,470
Goodwill 4,911
-----
Total Assets Acquired 7,077

Current Liabilities Assumed 1,686
-----
Net Assets Acquired $5,391
=====

Of the $1,470,000 of acquired intangible assets, $470,000 was assigned
to the value of the Deaconess Title IV financial aid eligibility and
$730,000 was assigned to accreditations, both of which have been determined
to not be subject to amortization, and $270,000 was assigned to student
relationships that have an average useful life of approximately 3 years.
The Company determined this allocation based upon a number of factors,
including a preliminary valuation analysis prepared by an independent
professional valuation specialist. The $4,911,000 of goodwill was all
assigned to the Medical & Healthcare operating segment.

The amounts recorded at June 30, 2005, relating to the acquisition are
subject to adjustment, as the Company has not yet completed the final
allocation of purchase price. The purchase price is still subject to
final closing adjustments. The Company expects to finalize the
purchase price and complete the allocations during the first quarter
of fiscal 2006. There is no pro forma presentation of prior year
operating results related to this acquisition due to the insignificant
effect on consolidated operations.

Ross University
- ---------------
On May 16, 2003, the Company acquired all outstanding shares of capital
stock of Dominica Management, Inc. (DMI) for $329,259,000, in cash
which includes approximately $4,175,000 of acquisition-related fees.
The results of DMI's operations have been included in the consolidated
financial statements of the Company since that date. DMI owns and operates
Ross University School of Medicine and Ross University School of Veterinary
Medicine. With campuses located in the
137

NOTE 3: BUSINESS COMBINATIONS (continued)

Ross University, continued
- --------------------------
Caribbean countries of Dominica and St. Kitts/Nevis, Ross University
is one of the world's largest providers of medical and veterinary
education, with more than 3,000 students. The acquisition gives the
Company entry into a growing sector of the higher education market.
The addition of Ross University further diversified the Company's
curricula and helped maintain a leadership position in career-focused
education.

The total consideration paid for DMI of $328,052,000 was comprised of
$58,052,000 in cash from current operations, $125,000,000 of senior
notes due 2010 and privately placed with institutional investors, and
$145,000,000 of borrowings under a revolving line of credit agreement
from a group of banks led by Bank of America, N.A.(Note 7). Based on a
final purchase price allocation analysis performed for the Company by
independent professional valuation specialists, acquired intangible
assets totaled $66,700,000. Of this amount $5,100,000 was assigned to
the value of tradenames, $14,100,000 was assigned to the value of the
Ross Medical and Veterinary Schools' U.S. Title IV financial aid
eligibility and accreditations, all of which are not subject to
amortization, and $47,500,000 was assigned to student relationships
that have an initial average useful life of approximately five years.
The goodwill balance of $239,408,000 was all assigned to the Ross
University operating segment. None of the intangible assets or
goodwill is expected to be deductible for U.S. tax reporting purposes.

The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.

At May 16, 2003
(In Thousands)

Current Assets $ 45,751
Property and Equipment 21,986
Intangible Assets 66,700
Goodwill 239,408
Other Assets 199
-------
Total Assets Acquired 374,044

Current Liabilities 44,939
Deferred Income Tax Liability, net 1,053
-------
Total Liabilities Assumed 45,992
-------
Net Assets Acquired $328,052
=======

The net deferred income tax liability included a current deferred tax
asset of $5,726,000, resulting from a deduction for the exercise and
non-statutory disposition of employee incentive stock options related
to the acquisition. Additionally, the Company recorded a non-current
deferred tax liability of $6,779,000 resulting from a book and tax
basis difference associated with the intangible assets not subject to
amortization that were recorded in purchase accounting. No deferred tax
liability was recorded with respect to student relationship intangibles,
as this temporary difference relates to operations that have been granted
tax-free status in their local jurisdictions during the periods in
138

NOTE 3: BUSINESS COMBINATIONS (continued)

Ross University, continued
- --------------------------
which the temporary difference is expected to reverse. The Company
also initially recorded a current tax liability of $13,599,000,
resulting from a deemed distribution arising upon acquisition of
accumulated earnings and profits of its non-U.S. subsidiaries through
the acquisition date. In fiscal 2004, this accrual was reduced by
$1,443,000, with a corresponding reduction recorded to goodwill.

The following unaudited pro forma financial information for the year
ended June 30, 2003, presents the results of operations of the Company
and DMI as if the acquisition had occurred at the beginning of fiscal
2003. The pro forma information is based on historical results of
operations and does not necessarily reflect the actual results that
would have occurred, nor is the information necessarily indicative of
future results of operations of the combined enterprises (dollars in
thousands except for per share amounts):

Revenues $738,229
Net Income 62,578
Earnings per Common Share:
Basic $0.90
Diluted $0.89

Person/Wolinsky
- ---------------
On October 21, 2003, Becker Professional Review, a wholly owned
subsidiary of the Company, acquired certain tangible operating assets
and trade names of Person/Wolinsky CPA Review ("Person/Wolinsky").
These assets were purchased for $2.7 million in cash. Funding was
provided from the Company's existing operating cash balances.
Person/Wolinsky is a training firm preparing students to pass the CPA
exam. Founded in 1967, its primary locations include New York City,
Philadelphia and Washington, D.C.

Based on an analysis performed for the Company by independent
professional valuation specialists, the purchase price of
Person/Wolinsky was allocated as follows in the third quarter of 2004:

Amortized Intangible Assets:
Trade Names $110,000
Non-compete Agreement 50,000
Other 20,000
-------
Total $180,000
=======

Goodwill $2,520,000
---------
139

NOTE 4: INTANGIBLE ASSETS

Intangible assets consist of the following:

As of June 30, 2005
--------------------------------
Gross Carrying Accumulated
Amount Amortization
--------------------------------
Amortized Intangible Assets:
Student Relationships $47,770,000 $(28,080,000)
License and Non-compete
Agreements 2,650,000 (2,563,000)
Class Materials 2,900,000 (900,000)
Trade Names 110,000 (48,000)
Other 620,000 (617,000)
---------- ----------
Total $54,050,000 $(32,208,000)
========== ==========
Unamortized Intangible Assets:
Trade Names $20,972,000
Trademark 1,645,000
Ross Title IV Eligibility
and Accreditations 14,100,000
Intellectual Property 13,940,000
Deaconess Title IV
Eligibility and
Accreditations 1,200,000
----------
Total $51,857,000
==========

As of June 30, 2004
--------------------------------
Gross Carrying Accumulated
Amount Amortization
--------------------------------
Amortized Intangible Assets:
Student Relationships $47,500,000 $(14,737,000)
License and Non-compete
Agreements 2,650,000 (2,126,000)
Class Materials 2,900,000 (700,000)
Trade Names 110,000 (21,000)
Other 620,000 (507,000)
---------- ----------
Total $53,780,000 $(18,091,000)
========== ==========
Unamortized Intangible Assets:
Trade Names $20,972,000
Trademark 1,645,000
Ross Title IV Eligibility
and Accreditations 14,100,000
Intellectual Property 13,940,000
----------
Total $50,657,000
==========
140

NOTE 4: INTANGIBLE ASSETS (continued)

Amortization expense for amortized intangible assets was
$14,117,000 and $13,694,000 for the years ended June 30, 2005 and
2004, respectively. Estimated amortization expense for amortized
intangible assets for the next five fiscal years ending June 30
is as follows:

Fiscal Year
2006 $10,036,000
2007 6,807,000
2008 3,598,000
2009 203,000
2010 200,000

The weighted-average amortization period for amortized intangible
assets is three and five years for Deaconess and Ross Student
Relationships, respectively, six years for License and Non-compete
Agreements, 14 years for Class Materials, four years for Trade Names
and six years for Other. These intangible assets, except for the Ross
Student Relationships, are being amortized on a straight-line basis.
The amount being amortized for the Ross Student Relationships is based
on the estimated progression of the students through the respective
medical and veterinary programs, giving consideration to the revenue
and cash flow associated with both existing students and new
applicants. This results in the basis being amortized at an annual
rate for each of the five years of estimated economic life as follows:

Year 1 27.4%
Year 2 29.0%
Year 3 21.0%
Year 4 14.5%
Year 5 8.1%

Indefinite-lived intangible assets related to Trademarks, Trade Names,
Title IV Eligibility, Accreditations and Intellectual Property are not
amortized, as there are no legal, regulatory, contractual, economic or
other factors that limit the useful life of these intangible assets to
the reporting entity. As of the end of fiscal years 2005 and 2004,
there was no impairment loss associated with these indefinite-lived
intangible assets, as fair value exceeds the carrying amount.

The Company determined that as of the end of fiscal 2005 and 2004,
there was no impairment in the value of the Company's goodwill for any
reporting units. This determination was made after considering a
number of factors including a valuation analysis prepared by an
independent professional valuation specialist. The carrying amount of
goodwill related to the DeVry University reportable segment at June
30, 2005 and 2004, was unchanged at $22,195,000. The carrying amount
of goodwill related to Professional and Training reportable segment at
June 30, 2005 and 2004, was unchanged at $22,716,000. The carrying
amount of goodwill related to the Medical & Healthcare segment was
$244,397,000 at June 30, 2005, and $239,486,000 at June 30, 2004. The
increase of $4,911,000 is the result of the allocation of the purchase
price for Deaconess as described in Note 2 above.
141

NOTE 5: REDUCTION IN WORKFORCE CHARGES AND IMPAIRMENT OF LONG-LIVED ASSETS

During the second quarter of fiscal 2005, the Company offered a
voluntary separation plan to its employees with more than 20 years of
service. In the third quarter of fiscal 2005, the Company implemented
an involuntary reduction in force that reduced its workforce at its
educational facilities and corporate office. In the fourth quarter of
fiscal 2005, the Company offered another voluntary separation plan for
its DeVry University faculty employees with more than 15 years of
service and implemented an involuntary reduction in force of its
faculty employees. These voluntary and involuntary separation plans
resulted in workforce reductions of approximately 230 employees. In
addition to these separation and reduction in force plans, the Company
experienced other involuntary separations during fiscal 2005. In
relation to all of these voluntary and involuntary reductions in
force, the Company recorded pre-tax charges of approximately $8.4
million in the fiscal 2005. These charges consist of severance pay
and in some cases, extended medical and dental benefits coverage.
These charges are classified as Cost of Educational Services and
Student Services and Administrative Expense in the Consolidated
Statements of Income and are related to the DeVry University and
Medical & Healthcare reportable segments.

Cash payments for the voluntary separation plans and the all
involuntary reductions in force were approximately $4.7 million in
fiscal 2005. Of the total amount accrued for these events,
approximately $3,700,000 remained to be paid as of June 30, 2005.
Payments will continue into the first quarter of fiscal 2006.

The workforce reductions relate to actions across several of the
company's businesses resulting from process improvements and its
continuing efforts to realign costs with revenues. The majority of the
workforce reductions are in the U.S. and include managerial,
professional, clerical and instructor roles.

Included in the fiscal 2005 depreciation expense is a $1.5 million pre-
tax impairment loss on a Company owned building in the Denver,
Colorado area that has been offered for sale. This building was
acquired in 1999 with the acquisition of Denver Technical College.
Although still used partly as classrooms and offices, this facility is
no longer essential to the Company operations in the Denver-area,
having been largely replaced by a new and larger DeVry University
campus serving the Denver market. This charge is classified as Cost of
Educational Services in the Consolidated Statements of Income and
related to the DeVry University reportable segment.

In October 2003, the Company announced that its subsidiary, DeVry
Canada LLC, had signed an agreement with RCC College of Technology
("RCC") that enables DeVry to phase out its operations at its Toronto
campus commencing with the term that began in November 2003. Based in
Vaughn, Ontario, RCC provides career-focused electronics and computer
technology diploma programs.

Under the terms of the agreement, which have been approved by the
Ontario Provincial Ministry, DeVry College of Technology contracted
with RCC to manage the completion of programs of study for DeVry's
current student body in Toronto. DeVry's Toronto campus no longer
admits new students. RCC will use existing DeVry curricula to deliver
courses that allow current DeVry students to earn DeVry diplomas and
certificates. The agreement also makes provisions for the acquisition
of DeVry assets by RCC and the use of certain portions of DeVry
curriculum under the RCC brand name.
142

NOTE 5: REDUCTION IN WORKFORCE CHARGES AND IMPAIRMENT OF LONG-LIVED ASSETS
(continued)

In the second quarter of fiscal 2004, the Company recognized an
approximately $0.5 million pre-tax asset impairment loss in accordance
with Statement of Financial Accounting Standards No. 144 entitled
"Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS
144), on the furniture and laboratory equipment associated with the
Company's Toronto-area operations. This equipment became the property
of RCC in accordance with the terms of the teachout agreement. This
charge is classified as Cost of Educational Services in the
Consolidated Statements of Income and related to the DeVry University
reportable segment.

During fiscal 2004, the Company provided a severance accrual of
approximately $600,000 related to those employees in Toronto who are
affected by the RCC transaction. These employees were either
terminated or will be phased out upon the teachout of DeVry students
by RCC. In fiscal 2005, additional severance expense of approximately
$400,000 was accrued for these employees. All of these charges consist
of severance pay and extended medical and dental benefits coverage and
are classified as Cost of Educational Services in the Consolidated
Statements of Income and are related to the DeVry University
reportable segment. Cash payments against this accrual were
approximately $450,000 in fiscal 2005. Of the total amount accrued for
this event, approximately $220,000 remained to be paid as of June 30,
2005.

During fiscal 2003, the Company assessed the expected future results
of its DeVry University Canadian operations. The assessment performed
by the Company included estimates of expected future cash flows
associated with the Canadian operations, which indicated an impairment
loss with respect to certain long-lived assets that were held and used
by the Company. Upon completing this analysis, it was determined that
recognition of an impairment loss related to Canadian leasehold
improvements was appropriate. This resulted in a charge in the quarter ended
December 31, 2002 of approximately $800,000. In addition, as of June
30, 2003, the Company reserved the remaining net rent liability on its
Scarborough campus that was closed. This resulted in a charge of
$200,000 in the quarter ended June 30, 2003. All of these charges are
classified as Cost of Educational Services in the Consolidated
Statements of Income and related to the DeVry University reportable
segment.

In fiscal 2003, the Company also provided a severance accrual relating
to personnel reductions at its Toronto area and certain U.S. campus
operations that resulted in a charge of approximately $2.5 million in
the quarter ended June 30, 2003. Cash payments against this accrual
were approximately $400,000 in fiscal 2005. Of the total amount
accrued for this event, approximately $270,000 remained to be paid as
of June 30, 2005. These charges are classified as Cost of Educational
Services in the Consolidated Statements of Income and related to the
DeVry University reportable segment.
143

NOTE 6: INCOME TAXES

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

For the Year Ended June 30,
--------------------------------------

2005 2004 2003
----------- ---------- ---------

U.S. $19,753,000 $67,828,000 $91,189,000
Foreign 14,994,000 13,528,000 (4,732,000)
---------- ---------- ----------

Total $34,747,000 $81,356,000 $86,457,000
========== ========== ==========

The net income tax provisions (benefits) related to the above results
are as follows:
For the Year Ended June 30,
-------------------------------------

2005 2004 2003
---------- ---------- ---------

Current Tax Provision:
U.S. Federal $14,021,000 $16,037,000 $15,758,000
State and Local 2,524,000 2,214,000 611,000
Foreign (217,000) (426,000) -
---------- ---------- ---------

Total Current 16,328,000 17,825,000 16,369,000
Deferred Tax Provision:
U.S. Federal (7,280,000) 5,052,000 1,865,000
State and Local (1,035,000) 407,000 582,000
Foreign - 11,000 6,493,000
---------- ----------- ---------

Total Deferred (8,315,000) 5,470,000 8,940,000
---------- ---------- ---------

Net Income Tax Provision $ 8,013,000 $23,295,000 $25,309,000
========== ========== ==========
144

NOTE 6: INCOME TAXES (continued)

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

For the Year Ended June 30,
-----------------------------------------------------------
2005 2004 2003
------------------ ------------------ -----------------

Income Tax at
Statutory Rates $12,161,000 35.0% $28,475,000 35.0% $30,260,000 35.0%

(Lower)Higher Rates on
Foreign Operations (5,248,000)(15.1%) (5,446,000) (6.7%) 580,000 0.7%

State Income Taxes 903,000 2.6% 1,572,000 1.9% 3,327,000 3.9%
Deduction of Worthless
Stock of Subsidiary - - - - (14,643,000)(17.0%)

Increase in Valuation
Allowance - - - - 6,493,000 7.5%

Tax Credits and Other 197,000 0.6% (1,306,000) (1.6%) (708,000) (0.8%)
-----------------------------------------------------------
Income Tax Provision $ 8,013,000 23.1% $23,295,000 28.6% $25,309,000 29.3%
===========================================================

Deferred income tax assets (liabilities) result primarily from
temporary differences in the recognition of various expenses for
tax and financial statement purposes, and from the recognition of
the tax benefits of net operating loss carryforwards. These
assets and liabilities are composed of the
following:
For the Year Ended June 30,
---------------------------------------

2005 2004 2003
----------- ----------- -----------

Loss Carryforwards, net $ 10,909,000 $ 7,813,000 $ 7,630,000
Employee Benefits 8,346,000 4,848,000 4,412,000
Receivable Reserves and
Other, net 14,530,000 9,036,000 15,778,000
Depreciation (2,724,000) 3,160,000 5,061,000

Less: Valuation Allowance (7,100,000) (7,100,000) (7,100,000)
---------- ---------- ----------

Gross Deferred Tax Assets 23,961,000 17,757,000 25,781,000
---------- ---------- ----------

Amortization of Intangible
Assets (28,227,000) (27,798,000) (24,755,000)
---------- ---------- ----------

Gross Deferred Tax Liabilities (28,227,000) (27,798,000) (24,755,000)
---------- ---------- ----------

Net Deferred Taxes $ (4,266,000) $(10,041,000) $ 1,026,000
========== ========== ==========
145

NOTE 6: INCOME TAXES (continued)

The Company has net operating loss carryforwards in various tax
jurisdictions expiring at various times through the years ending
June 30, 2025.

Valuation allowances have been established for approximately $7.1
million. These are composed of loss carryforwards of $2.5 million,
depreciation of $3.5 million and other of $500,000 for deferred income
tax benefits of the Canadian subsidiary; and approximately $600,000
for certain state net operating loss carry forwards that may expire
before their benefit is utilized.

Based on the Company's expectations for future taxable income,
management believes that, more likely than not, operating income in
respective jurisdictions will be sufficient to recognize fully all
deferred tax assets, except as explained above.

Deferred income tax provisions (benefits) result primarily from
temporary differences in the recognition of various expenses for tax
and financial statement purposes. The sources and tax effects of these
differences are as follows:
For the Year Ended June 30,
-------------------------------------

2005 2004 2003
--------- --------- ---------

Recognition of Operating
Loss Carryforwards $(3,096,000) $( 183,000) $ 2,214,000
Excess (Tax) Book
Depreciation and
Amortization 6,184,000 4,944,000 11,764,000
Excess of Amounts Expensed
for (Book) Tax Purposes
Over Amounts Deductible
for Book (Tax) Purposes (8,863,000) 709,000 (5,038,000)
---------- --------- ----------

Deferred Tax Provision $(5,775,000) $5,470,000 $ 8,940,000
========== ========= ==========

On May 16, 2003, the Company acquired all of the outstanding stock of
DMI and subsidiaries ("Note 3-Business Combinations"). The principal
operating subsidiaries of DMI are Ross University School of Medicine
(the Medical School), incorporated under the laws of the Commonwealth
of Dominica, and Ross University School of Veterinary Medicine (the
Veterinary School), incorporated under the laws of the Federation of
St. Christopher Nevis, St. Kitts, in the West Indies. Both operating
companies have agreements with the respective governments that exempt
them from local income taxation through the years 2043 and 2023,
respectively. Accordingly, no current provision for foreign income
taxes was recorded. A provision for deferred foreign income taxes of
approximately $6.8 million was recorded related to indefinite-lived
intangible assets.
146

NOTE 6: INCOME TAXES (continued)

Concurrent with the acquisition, a deemed distribution of
approximately $39 million occurred, representing the accumulated
earnings and profits of the Medical and Veterinary Schools through
the date of the acquisition.

The Company has not recorded a tax provision for the undistributed
earnings of the Medical and Veterinary Schools for the period after
the acquisition. It is the Company's intention to indefinitely
reinvest post-acquisition undistributed earnings and profits to
service debt, improve the facilities and operations of the Schools,
and pursue future opportunities outside of the United States.
Cumulative post-acquisition undistributed earnings were approximately
$32.4 million and $16.8 million at June 30, 2005 and June 30, 2004,
respectively.

As described in Note 5 above, during the second quarter of fiscal
2003, the Company assessed the expected future results of its DeVry
University Canadian operations. The assessment also included an
analysis of the previously recorded Canadian net deferred tax assets,
which were primarily composed of net operating loss carryforwards, and
property and equipment tax basis in excess of book basis. Based upon
its estimates of future cash flows and taxable income associated with
the Canadian operations, the Company determined that, with respect to
the realization of the deferred tax asset, a valuation allowance for
100 percent of the Canadian deferred tax assets was appropriate in the
second quarter. This resulted in an additional income tax provision
in the second quarter ended December 31, 2002, of approximately $6.5
million.

The Company also determined that it would deduct the full amount of
the tax basis of its investment in its Canadian subsidiary in this
quarter. This reflects the negative value ascribed to the investment
as determined by independent valuations of the business that were
undertaken as a part of the assessment. This U.S. income tax
deduction results in a tax benefit totaling approximately $14.6
million.

The effect of the above actions associated with the Canadian
investment and operations is a net tax benefit of approximately $8.1
million, categorized as "Non-recurring Tax Benefits" in the
Consolidated Statements of Income for fiscal 2003.

Also, during the second quarter ended December 31, 2002, the Company
completed a study that identified certain business incentive tax
credits relating primarily to employment at its DeVry University
operations in Long Beach, California. These credits, along with not
recording a tax provision for the undistributed earnings of the
Medical and Veterinary Schools, contributed to a reduced ongoing
effective tax rate of 23.1% for fiscal 2005, 28.6% for fiscal 2004 and
38.7% for fiscal 2003. The fiscal 2003 effective tax rate does not
include the effect of the previously described non-recurring tax
benefit related to the Company's Canadian operations.
147

NOTE 7: LONG-TERM DEBT

All of the Company's borrowings and letters of credit under its long-
term debt agreements are through DeVry Inc. and Global Education
International, Inc. (GEI), a subsidiary formed in relation to the
acquisition of DMI (Note 2). This long-term debt consists of the
following at June 30, 2005 and 2004:

Outstanding Debt Effective
at June 30, Interest Rate at
2005 2004 June 30, 2005
------------ ------------ -------------
Revolving Credit Agreement (a):
DeVry Inc. as borrower $ 85,000,000 $ 85,000,000 5.19%
GEI as borrower 15,000,000 40,000,000 4.70%
----------- -----------
Total $100,000,000 $125,000,000 5.12%
----------- -----------
Senior Notes (b):
DeVry Inc. as borrower $ 75,000,000 $ 75,000,000 4.44%
GEI as borrower 50,000,000 50,000,000 4.44%
----------- -----------
Total $125,000,000 $125,000,000 4.44%
----------- -----------

Total long-term debt $225,000,000 $250,000,000 4.74%
----------- -----------

(a)The revolving credit facility became effective on May 16,
2003, and was amended as of June 29, 2004. This facility
replaced another revolving credit agreement in effect before May
16, 2003. Borrowings and letters of credit under this agreement
cannot exceed $175,000,000 in total. DeVry Inc. aggregate
commitments cannot exceed $125,000,000, and GEI aggregate
commitments cannot exceed $50,000,000. At the request of the
Company, the maximum borrowings and letters of credit can be
increased to $250,000,000 with aggregate DeVry commitments
increased to $200,000,000. There are no required payments under
this revolving credit agreement and all borrowings and letters of
credit mature on July 1, 2009. As a result of the agreement
extending beyond one year, all borrowings are classified as long-
term with the exception of amounts expected to be repaid in the
12 months subsequent to the balance sheet date. DeVry Inc.
letters of credit outstanding under this agreement were
$7,918,000 and $2,715,000 as of June 30, 2005 and 2004,
respectively. As of June 30, 2005, outstanding borrowings under
this agreement bear interest, payable quarterly or upon
expiration of the interest rate period, at the prime rate or a
Eurodollar LIBOR rate plus 1.25%, at the option of the Company.
Outstanding letters of credit under the revolving credit
agreement are charged an annual fee equal to 1.25% of the undrawn
face amount of the letter of credit, payable quarterly. The
agreement also requires payment of a commitment fee equal to .30%
of the undrawn portion of the credit facility. The interest rate,
letter of credit fees and commitment fees are adjustable
quarterly, based upon the Company's achievement of certain
financial ratios.

In July and August 2005, the Company repaid $42,000,000 of
the borrowings under the revolving credit facility.
148

NOTE 7: LONG TERM DEBT (continued)

(b) The senior note agreement was entered into on May 16,
2003. All borrowings under this agreement are due on
April 30, 2010, and there are no required installment
payments. A prepayment penalty exists during the first
two years of this note agreement. As of June 30, 2005,
outstanding borrowings under this agreement bear interest,
payable quarterly, at the 90 day LIBOR Eurodollar rate
plus 1.25%

Both the revolving credit agreement and the senior notes contain
certain covenants that, among other things, require maintenance of
certain financial ratios, as defined in the agreements. These
financial ratios include maintaining a minimum level of consolidated
net worth, a consolidated fixed charge coverage ratio, a consolidated
leverage ratio and a composite Equity, Primary Reserve and Net Income,
Department of Education, financial responsibility ratio ("DOE Ratio").
Failure to maintain any of these ratios or violation of other
covenants contained in the agreement will constitute an event of
default and could result in termination of the agreements and,
requirement of payment of all outstanding borrowings.

In June 2004, the Company received notice from the Department of
Education that the DOE Ratio yielded a composite score of 1.4 for the
year ended June 30, 2003. A minimum composite score of 1.5 is required
for compliance with the Company's revolving credit agreement. This
created an Event of Default as defined by the revolving credit
agreement. In June 2004, the lenders waived this default effective for
June 30, 2003.

The stock of certain of the subsidiaries of the Company is pledged as
collateral for the borrowings under the revolving credit facility and
the senior notes.

In connection with entering into the two new borrowing agreements in
May 2003, the Company incurred $3,986,000 of financing costs that were
deferred. These costs are being amortized over the initial three-year
life of the revolving credit facility and the seven-year life of the
senior notes, based on the ratio of respective borrowings to total
borrowings. In June 2004, the revolving credit facility was amended
and the Company paid an additional $360,000 of financing fees that
were deferred. These costs are being amortized over the extended 5-
year term of the loan. Amortization of deferred costs, which is
included in interest expense was $1,096,000 and $1,012,000 for the
years ended June 30, 2005 and 2004, respectively.

NOTE 8: EMPLOYEE BENEFIT PLANS

Profit Sharing Retirement Plan
- ------------------------------
All employees, except those of Ross University, who meet certain
eligibility requirements can participate in the Company's 401(k)
Profit Sharing Retirement Plan. The Company contributes to the plan an
amount up to 2.0% of the total eligible compensation of employees who
make contributions under the plan. Employees of DMI and Ross
University participate in a separate plan and receive a company
contribution of 5% of total eligible compensation. Matching
contributions under the plans were approximately $4,110,000,
$3,495,000 and $2,502,000 in 2005, 2004 and
149

NOTE 8: EMPLOYEE BENEFIT PLANS (continued)

Profit Sharing Retirement Plan, continued
- -----------------------------------------
2003, respectively. In addition, the Company's board of directors may
also make discretionary contributions for the benefit of all eligible
employees, except those of DMI and Ross. Provisions for discretionary
contributions under the plan were approximately $2,358,000, $4,958,000
and $4,747,000 in 2005, 2004 and 2003, respectively.

Employee Stock Purchase Plan
- ----------------------------
Under provisions of the DeVry Employee Stock Purchase Plan, any eligible
employee may authorize the Company to withhold up to $25,000 of annual
earnings to purchase common stock of the Company on the open market at
100% of the prevailing market price. The Company pays all brokerage
commissions and administrative fees associated with the plan. These expenses
were insignificant for the years ended June 30, 2005, 2004 and 2003.

Post-employment Benefits
- ------------------------
The Company's employment agreements with its Chairman of the Board
of Directors and Chief Executive Officer provide certain post-
employment benefits that require accrual over the expected future
service period beginning with the second quarter of fiscal 2003.
For the years ended June 30, 2005 and 2004, the Company recognized
expense of approximately $2.7 million and $1.2 million,
respectively, related to these agreements. The amounts provided
are based on recording, over the period of active service, the
amount that will represent the present value of the obligation
through the date the executive attains full eligibility for the
benefits, discounted using a 5.50% rate and using the sinking fund
accrual method.

NOTE 9: SHAREHOLDERS' EQUITY

Stock Option Plans
- ------------------
The Company maintains five stock-based award plans: the Amended and Restated
Stock Incentive Plan, established in 1988, the 1991 Stock Incentive Plan,
the 1994 Stock Incentive Plan, the 1999 Stock Incentive Plan and the
2003 Stock Incentive Plan. Under these plans, directors, key
executives and managerial employees are eligible to receive incentive
stock or nonqualified options to purchase shares of the Company's
common stock. The Amended and Restated Stock Incentive Plan, the
1994, 1999 and 2003 Stock Incentive Plans are administered by a Plan
Committee of the board of directors. Plan Committee members are
granted automatic, nondiscretionary annual options. The 1991 Stock Incentive
Plan is administered by the board of directors. Options under all five plans
are granted for terms of up to 10 years and vest over periods of one to five
years. The option price under the plans is the fair market value of the
shares on the date of the grant.

At June 30, 2005, 4,784,794 authorized but unissued shares of common stock
were reserved for issuance under the Company's stock option plans.
150

NOTE 9: SHAREHOLDERS' EQUITY (continued)

Stock Option Plans, continued
- -----------------------------
A summary of activity under the stock option plans is as follows:

Options Outstanding
----------------------
Weighted
Shares Average
Available Number Exercise
for Grant Outstanding Price
--------- ----------- --------
Balance at June 30, 2002 1,247,181 2,290,751 $19.83
Options Authorized 2,000,000 - -
Options Granted (471,650) 471,650 $17.25
Options Exercised - (136,305) $5.20
Options Canceled 109,881 (109,881) $27.55
Unissued and Expired (8,080) - -
--------- --------- -----
Balance at June 30, 2003 2,877,332 2,516,215 $19.80
Options Granted (596,200) 596,200 $27.03
Options Exercised - (323,735) $9.18
Options Canceled 103,569 (103,569) $26.65
Unissued and Expired (36,071) - -
--------- --------- -----
Balance at June 30, 2004 2,348,630 2,685,111 $22.42
Options Granted (1,455,500) 1,455,500 $21.02
Options Exercised - (171,044) $9.75
Options Canceled 204,723 (204,723) $24.33
Unissued and Expired (77,903) - -
--------- --------- -----
Balance at June 30, 2005 1,019,950 3,764,844 $22.35
========= ========= =====

A summary of outstanding and exercisable stock options as of June 30, 2005,
is as follows:

Options Outstanding Options Exercisable
----------------------------------- ----------------------
Weighted
Average Weighted Weighted
Range of Remaining Average Average
Exercise Number of Contractual Exercise Number of Exercise
Prices Shares Life Price Shares Price
---------------------------------------------------------------------------

$5.44-14.59 418,370 1.50 $12.18 418,370 $12.18

$14.60-18.00 431,740 7.33 $17.00 164,270 $17.05

$18.01-21.60 1,708,124 8.38 $21.12 1,134,024 $21.30

$21.61-28.44 638,310 7.08 $25.81 257,892 $24.33

$28.45-38.81 568,300 5.82 $33.74 395,160 $33.68
------------------------------------------------------------
$5.44-38.81 3,764,844 6.89 $22.35 2,369,716 $21.79
============================================================
151

NOTE 10: SHAREHOLDER RIGHTS PLAN

On November 24, 2004, the Company adopted a shareholder rights plan.
In connection with this plan, the Company's Board of Directors
declared a dividend of one Common Stock Purchase Right ("Right" or
"Rights") for each outstanding share of DeVry Inc. Common Stock. The
dividend was distributed on December 6, 2004 to shareholders of record
on that date. Each shareholder is automatically entitled to the Rights
and no physical distribution of new certificates was made.

Each Right, as represented by the Company's Common Stock certificates,
currently entitles the holder to buy one one-thousandth of a share of
the Company's Common Stock at an exercise price of $75 subject to
adjustment, e.g. for stock splits or stock dividends. However,
following the acquisition of 15% or more of DeVry Inc. Common Stock by
a person or group, the holders of the Rights (other than the acquiring
person or group) will be entitled to purchase shares of DeVry Inc.
Common Stock at half-price. Further, in the event of a subsequent
merger or other acquisition of the Company, the holder of the Rights
(other than the acquiring person or group) will be entitled to buy
shares of common stock of the acquiring entity at one-half of the
market price of these shares.

The Rights are redeemable for $.001 per Right, subject to adjustment,
before the acquisition by a person or group of 15% or more of the
Company's Common Stock. The Rights will expire on December 6, 2014.

NOTE 11: COMMITMENTS AND CONTINGENCIES

DeVry University, Becker and Ross lease certain equipment and
facilities under non-cancelable operating leases, some of which
contain renewal options, escalation clauses and requirements to
pay taxes, insurance and maintenance costs. Future minimum
rental commitments for all non-cancelable operating leases
having a remaining term in excess of one year at June 30, 2005,
are as follows:

Year Ended
June 30, Amount
---------- ------------
2006 $ 40,300,000
2007 37,800,000
2008 36,800,000
2009 33,700,000
2010 27,300,000
Thereafter 111,300,000

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

Rent expenses for the years ended June 30, 2005, 2004 and 2003, were
$46,455,000, $45,239,000 and $41,142,000, respectively.
152

NOTE 11: COMMITMENTS AND CONTINGENCIES (continued)

The Company is subject to occasional lawsuits, administrative
proceedings, regulatory reviews associated with financial assistance
programs and other claims arising in the normal conduct of its
business. The following is a description of pending litigation that
may be considered other than ordinary and routine litigation
incidental to the business.

In January 2002, a graduate of one of DeVry University's Los Angeles-
area campuses, filed a class-action complaint against DeVry Inc. and
DeVry University, Inc. in the Superior Court of the State of
California, County of Los Angeles, on behalf of all students enrolled
in the post-baccalaureate degree program in Information Technology.
The suit alleges that the program offered by DeVry did not conform to
the program as it was presented in the advertising and other marketing
materials. In March 2003, the complaint was dismissed by the court
with limited right to amend and re-file. The complaint was
subsequently amended and re-filed. During the first quarter of the
Company's fiscal year 2004, a new complaint was filed in the same
court by another plaintiff with the same general allegations and by
the same plaintiffs' attorneys. This subsequent action has been
stayed pending the outcome of the initial matter. Discovery continues,
but there is no determinable date at which this matter may be brought
to conclusion.
153

NOTE 11: COMMITMENTS AND CONTINGENCIES (continued)

In November 2000, three graduates of one of DeVry University's Chicago-
area campuses filed a class-action complaint in the Circuit Court for
Cook County, Illinois that alleges DeVry graduates do not have
appropriate skills for employment in the computer information systems
field. The complaint was subsequently dismissed by the court, but was
amended and re-filed to include as a plaintiff a then-current student
in another curriculum from a second Chicago-area campus. Discovery
continues, and a hearing to determine class-action certification has
been held, though the court has not yet announced its ruling.

The two alleged class actions seek money damages of an indeterminate
amount. The Company has accrued $0.65 million representing the
estimated minimum amount to resolve the above two class-action claims.

In conjunction with the required annual review procedures related to
its administration of financial aid programs under the Ontario Student
Aid Program, the Toronto-area DeVry campuses engaged in discussions
with the Ontario Ministry of Education relating to certain additional
information requirements for the 2001 and 2002 financial aid years.
These additional information requirements could then serve as the
basis for a Ministry claim for the return of some amounts of financial
aid disbursed to students attending these campuses. The Company's
Toronto-area campus discontinued operation and its students completed
their education under an agreement with RCC College of Technology as
previously announced. Accordingly, the Company is no longer
participating in these financial aid programs. Final discussions with
the Ministry have resulted in a resolution of these claims during the
fourth quarter of fiscal year 2005 for an amount less than CDN$80,000,
for which the Company had previously accrued.

In August 2005 counterclaims were filed against the company's
subsidiary Dominica Management, Inc. and the Ross University School of
Medicine by defendants American University of Antigua College of
Medicine, Neal Simon and Sol Weltman in a case filed by Dominica
Management, Inc. in the U.S. District Court for the Southern District
of New York in September 2004. The original case filed by Dominica
Management, Inc. sought relief primarily for alleged copyright
infringement, misappropriation of trade secrets and confidential
information, and unfair competition. The counterclaims allege, inter
alia, anticompetitive behavior, tortious interference with prospective
economic relationships, and defamation. Damages sought in connection
with the counterclaims are in excess of $1,000,000. Discovery into
these claims is commencing.

At June 30, 2005, the Company has recorded approximately $1.5 million
associated with these estimated loss contingencies, including the
amount of approximately $0.6 million in remaining payments under an
anti-trust claim settlement agreement.
154

NOTE 12: SEGMENT INFORMATION

The Company's principal business is providing post-secondary
education. The services of our operations are described in more
detail in "Note 1-Summary of Significant Accounting Policies" under
"Nature of Operations." The Company presents three reportable
segments: the DeVry University undergraduate and graduate
operations (DeVry University), the professional exam review
and training operations including Becker Professional Review
and the Center for Corporate Education (Professional and
Training), and the Ross University medical and veterinary
school and Deaconess School of Nursing operations (Medical &
Healthcare).

These segments are based on the method by which management evaluates
performance and allocates resources. Such decisions are based, in
part, on each segment's operating income, which is defined as income
before interest expense, amortization and income taxes.
Intersegment sales are accounted for at amounts comparable to
sales to nonaffiliated customers and are eliminated in
consolidation. The accounting policies of the segments are the
same as those described in "Note 1 - Summary of Significant
Accounting Policies."

The consistent measure of segment profit excludes interest expense,
amortization and certain corporate-related depreciation. As such,
these items are reconciling items in arriving at income before income taxes.
The consistent measure of segment assets excludes deferred income tax
assets and certain depreciable corporate assets. Additions to long-lived
assets have been measured in this same manner. Reconciling items are
included as corporate assets.
155

NOTE 12: SEGMENT INFORMATION (continued)

Following is a tabulation of business segment information based
on the current segmentation for each of the years ended June 30,
2005, 2004 and 2003. Corporate information is included where it
is needed to reconcile segment data to the consolidated financial
statements.

<CAPTION

For the Year Ended June 30,
----------------------------------------------
2005 2004 2003
------------ ------------ ------------

Revenues:
DeVry University $645,564,000 $665,671,000 $626,747,000
Professional and Training 44,367,000 36,221,000 43,401,000
Medical & Healthcare 91,373,000 82,993,000 9,431,000
----------- ----------- -----------
Total Consolidated Revenues $781,304,000 $784,885,000 $679,579,000
----------- ----------- -----------
Operating Income:
DeVry University $11,377,000 $65,167,000 $73,774,000
Professional and Training 14,588,000 5,943,000 13,801,000
Medical & Healthcare 32,966,000 32,697,000 3,552,000
Reconciling Items:
Amortization Expense (14,117,000) (13,736,000) (2,574,000)
Interest Expense (9,047,000) (7,834,000) (1,280,000)
Depreciation and Other (1,020,000) (881,000) (816,000)
---------- ---------- ----------
Total Consolidated Income
before Income Taxes $34,747,000 $81,356,000 $86,457,000
========== ========== ==========
Segment Assets:
DeVry University $426,086,000 $410,695,000 $379,767,000
Professional and Training 72,155,000 75,093,000 65,494,000
Medical & Healthcare 384,997,000 380,082,000 373,273,000
Corporate 26,797,000 18,262,000 22,882,000
----------- ----------- -----------
Total Consolidated Assets $910,035,000 $884,132,000 $841,416,000
=========== =========== ===========

Additions to Long-lived Assets:
DeVry University $35,609,000 $30,783,000 $ 42,678,000
Professional and Training 335,000 3,320,000 172,000
Medical & Healthcare 11,826,000 10,198,000 331,656,000
---------- ---------- -----------
Total Consolidated Additions
to Long-lived Assets $47,770,000 $44,301,000 $374,506,000
========== ========== ===========
Reconciliation to Consolidated
Financial Statements:
Capital Expenditures $42,909,000 $42,808,000 $ 43,762,000
Capital Assets Acquired (Note 3) - - 21,986,000
Purchase of Goodwill and
Intangible Assets (Note 3) 4,861,000 1,493,000 308,758,000
---------- ---------- -----------
Total Increase in Consolidated
Long-lived Assets $47,770,000 $44,301,000 $374,506,000
========== ========== ===========

156

NOTE 12: SEGMENT INFORMATION (continued)

For the Year Ended June 30,
----------------------------------------------
2005 2004 2003
------------ ------------ ------------

Depreciation Expense:
DeVry University $37,277,000 $37,245,000 $36,364,000
Professional and Training 524,000 405,000 384,000
Medical & Healthcare 3,564,000 2,305,000 229,000
Corporate 988,000 881,000 781,000
---------- ---------- ----------
Total Consolidated Depreciation $42,353,000 $40,836,000 $37,758,000
========== ========== ==========
Intangible Asset Amortization Expense:
DeVry University $ - $ 31,000 $ 31,000
Professional and Training 774,000 773,000 738,000
Medical & Healthcare 13,343,000 12,932,000 1,805,000
---------- ---------- ---------
Total Consolidated Amortization $14,117,000 $13,736,000 $2,574,000
========== ========== =========

The Company conducts its educational operations in the United States, Canada,
the Caribbean countries of Dominica and St. Kitts/Nevis, Europe, the Middle
East and the Pacific Rim. Other international revenues, which are derived
principally from Canada, were less than 5% of total revenues for the years
ended June 30, 2005, 2004 and 2003. Revenues and long-lived assets by
geographic area are as follows:

For the Year Ended June 30,
----------------------------------------------
2005 2004 2003
------------ ------------ ------------

Revenues from Unaffiliated Customers:
Domestic Operations $679,696,000 $685,771,000 $649,244,000
International Operations:
Dominica and St. Kitts/Nevis 89,277,000 82,869,000 9,431,000
Other 12,331,000 16,245,000 20,904,000
----------- ----------- -----------
Total International 101,608,000 99,114,000 30,335,000
----------- ----------- -----------
Consolidated $781,304,000 $784,885,000 $679,579,000
=========== =========== ===========
Long-lived Assets:
Domestic Operations $351,301,000 $359,107,000 $362,675,000
International Operations:
Dominica and St. Kitts/Nevis 315,892,000 315,153,000 322,061,000
Other 504,000 997,000 2,221,000
----------- ----------- -----------
Total International 316,396,000 316,150,000 324,282,000
----------- ----------- -----------
Consolidated $667,697,000 $675,257,000 $686,957,000
=========== =========== ===========

No one customer accounted for more than 10% of the Company's consolidated
revenues.

NOTE 13: RELATED PARTIES

NOTE 14: QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized unaudited quarterly data for the years ended June 30, 2005
and 2004, are as follows.

(Dollars in Thousands, Except for Per Share Amounts)

2005 Quarter
- ---- -------------------------------------- Total
First Second Third Fourth Year
-------- -------- -------- -------- --------
Revenues $188,396 $194,522 $201,930 $196,456 $781,304
Income Before Interest
And Taxes 5,303 9,623 17,853 11,015 43,794
Income Before Cumulative
Effect of Change in
Accounting 2,490 5,856 11,947 6,441 26,734
Cumulative Effect of Change
In Accounting 1,810 - - - 1,810
Net Income 4,300 5,856 11,947 6,441 28,544

Earnings per Common Share:
Basic:
Income Before Cumulative
Effect of Change in
Accounting 0.04 0.08 0.17 0.09 0.38
Net Income 0.06 0.08 0.17 0.09 0.41

Diluted:
Income Before Cumulative
Effect of Change in
Accounting 0.04 0.08 0.17 0.09 0.38
Net Income 0.06 0.08 0.17 0.09 0.40

2004 Quarter
- ---- -------------------------------------- Total
First Second Third Fourth Year
-------- -------- -------- -------- --------
Revenues $189,236 $198,806 $196,800 $200,043 $784,885
Income Before Interest
and Taxes 16,837 24,015 24,641 23,697 89,190
Net Income 10,492 15,578 16,295 15,696 58,061

Earnings per Common Share
Basic 0.15 0.22 0.23 0.22 0.83
Diluted 0.15 0.22 0.23 0.22 0.82

NOTE 15: SUBSEQUENT EVENT

On July 19, 2005, the Company announced the signing of a definitive
agreement to acquire Gearty CPE for $2.0 million in cash. Gearty CPE,
which operates in the New York/New Jersey metro area, is a provider of
high quality continuing professional education (CPE) programs and
seminars in accounting and finance predominantly serving chief
financial officers and controllers of Fortune 500 companies.
The acquisition is not expected to have a material financial impact on
DeVry's fiscal 2006 earnings.

158

DEVRY INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

For the Years Ended June 30, 2005, 2004 and 2003
(Dollars in Thousands)

Balance at Charged to Charged to Balance at
Description of Allowances Beginning Costs and Other Deductions End of
and Reserves of Period Expenses Accounts <FN5> Period
- --------------------------------------------------------------------------------------------------------------

2005
- ----
Deducted from accounts receivable
for refunds $ 259 $22,132 $ 2 <FN1> $22,045 $ 348

Deducted from accounts receivable
for uncollectible accounts 19,082 21,150 371 <FN2> 11,863 28,740

Deducted from notes receivable for
uncollectible notes 2,195 752 22 <FN1> - 2,969

For loss on disposition of inventory 216 101 17 <FN1> 332 2

For loss on DeVry capital contributions
to Perkins loan program 3,031 (309) - - 2,722

Deducted from deferred tax assets for
loss of realizable value 7,939 - 380 <FN1> - 8,319

2004
- ----
Deducted from accounts receivable
for refunds 238 19,423 - 19,402 259

Deducted from accounts receivable
for uncollectible accounts 17,024 15,411 10 <FN1> 13,363 19,082

Deducted from notes receivable for
uncollectible notes 1,555 632 8 <FN1> - 2,195

For loss on disposition of inventory 27 211 - 22 216

For loss on DeVry capital contributions
to Perkins loan program 3,001 30 - - 3,031

Deducted from deferred tax assets for
loss of realizable value 7,939 - - - 7,939

2003
- ----
Deducted from accounts receivable
for refunds 222 20,286 - 20,270 238

Deducted from accounts receivable
for uncollectible accounts 13,668 13,107 618 <FN3> 10,369 17,024

Deducted from notes receivable for
uncollectible notes 679 853 27 <FN1> 4 1,555

For loss on disposition of inventory 63 491 - 527 27

For loss on DeVry capital contributions
to Perkins loan program 2,706 295 - - 3,001

Deducted from deferred tax assets for
loss of realizable value - 6,493 1,446 <FN4> - 7,939

<FN>

<FN1>Effect of foreign currency translation charged to Accumulated Other Comprehensive Income.
<FN2>This amount is comprised of the opening balances of acquired businesses charged to
Goodwill of $333 and the effect of foreign currency translation charged to Accumulated Other
Comprehensive Income of $38.
<FN3>This amount is comprised of the opening balances of acquired businesses charged to
Goodwill of $540 and the effect of foreign currency translation charged to Accumulated Other
Comprehensive Income of $78.
<FN4>This amount includes $542 charged to Goodwill in purchase accounting and $904 charged to
Accumulated Other Comprehensive Income for the effect of foreign currency translation.
<FN5>Write-offs of uncollectible amounts or inventory.

</FN>

159

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders
of DeVry Inc.:

We have completed an integrated audit of DeVry Inc.'s 2005
consolidated financial statements and of its internal control
over financial reporting as of June 30, 2005 and audits of its
2004 and 2003 consolidated financial statements in accordance
with the standards of the Public Company Accounting Oversight
Board (United States). Our opinions, based on our audits, are
presented below.

Consolidated financial statements and financial statement schedule
- ------------------------------------------------------------------

In our opinion, the consolidated financial statements listed in
the accompanying index present fairly, in all material respects,
the financial position of DeVry Inc. and its subsidiaries at June
30, 2005 and 2004, and the results of their operations and their
cash flows for each of the three years in the period ended June
30, 2005 in conformity with accounting principles generally
accepted in the United States of America. In addition, in our
opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements. These financial
statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted
our audits of these statements in accordance with the standards
of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit of
financial statements includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the financial statements, the Company
changed the fiscal year-end of the Becker Professional Review
subsidiary in 2005.

Internal control over financial reporting
- -----------------------------------------

Also, in our opinion, management's assessment, included in
Management's Report on Internal Control Over Financial Reporting
appearing under Item 9A, that the Company maintained effective
internal control over financial reporting as of June 30, 2005
based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO), is fairly stated, in all material
respects, based on those criteria. Furthermore, in our opinion,
the Company maintained, in all material respects, effective
internal control over financial reporting as of June 30, 2005,

160

based on criteria established in Internal Control -Integrated
Framework issued by the COSO. The Company's management is
responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility
is to express opinions on management's assessment and on the
effectiveness of the Company's internal control over financial
reporting based on our audit. We conducted our audit of internal
control over financial reporting in accordance with the standards
of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material
respects. An audit of internal control over financial reporting
includes obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal
control, and performing such other procedures as we consider
necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal
control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii)
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of
the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use,
or disposition of the company's assets that could have a material
effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

/s/PricewaterhouseCoopers, LLP

PricewaterhouseCoopers, LLP
Chicago, Illinois
September 13, 2005

161

PART III
--------

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- ----------------------------------------------------------------------
The information called for by Item 10 relating to Directors and Nominees
for election to the Board of Directors is incorporated by reference to the
matter under the Captions "Election of Directors," "Nominees" and
"Incumbent Directors" in the Company's definitive Proxy Statement to be
filed in connection with the solicitation of proxies for the Annual Meeting
of Stockholders to be held November 9, 2005 (the "Proxy Statement"). The
information called for by Item 10 with respect to Executive Officers is set
forth in Part 1 of this Annual Report on Form 10-K.

The information called for by Item 10 relative to Item 401 disclosure of
the audit committee's financial expert and identification of the Company's
audit committee is incorporated by reference to the material under the
caption "Board of Directors and Board Committee Information - Board
Committees - Audit Committee" in the Proxy Statement. The information
called for by Item 10 relating to Item 401 disclosure of procedures by
which security holders may recommend nominees to the Company's Board of
Directors is incorporated by reference to the matter under the caption
"Board of Directors and Board Committee Information - Board Committees -
Governance Committee" in the Proxy Statement. The information called for
by Item 10 with respect to Item 405 disclosure of delinquent Form 3, 4 or 5
filers is incorporated by reference to the matter under the caption
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement. The information called for by Item 10 relating to Item 406
disclosures about the Company's Code of Business Conduct and Ethics, which
applies to its directors, officers (including the Chief Executive Officer,
the Chief Financial Officer and the Controller) and all other employees, is
incorporated by reference to the matter under the caption "Code of Business
Conduct and Ethics" in the Proxy Statement.

The annual Chief Executive Officer certification to the New York Stock
Exchange ("NYSE") following the Annual Meeting of Stockholders in November
2004 was submitted as required stating that he was unaware of any violation
by the Company of the NYSE's corporate governance listing standards.

ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
Information regarding compensation of executive officers of the Company is
incorporated by reference to the material under the caption "Board of
Directors and Board Committee Information - Compensation of Directors,"
"Section 16(a) Beneficial Ownership Reporting Compliance," "Executive
Compensation," "Employment Contracts, Termination of Employment and Change-
in-Control Arrangements," and "Compensation Committee Report on Executive
Compensation" in the Proxy Statement (as defined in Item 10).

162

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
Information regarding security ownership of certain beneficial owners and
management, and the other information required by this item, is
incorporated by reference to the material under the captions "Stock
Ownership" and "Equity Compensation Plan Information" in the Proxy
Statement (as defined in Item 10).

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
Information regarding certain relationships and related transactions is
incorporated by reference to the material under the caption "Certain
Transactions" in the Proxy Statement (as defined in Item 10).

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
- ------------------------------------------------
Information regarding fees for the past two years for professional services
rendered by the independent registered public accountants that audited the
Company's annual financial statements and management's assessment of
internal control is incorporated by reference to the material under the
caption "Audit Fees" in the Proxy Statement (as defined in Item 10).

163

PART IV
--------

ITEM 15 - EXHIBITS and FINANCIAL STATEMENT SCHEDULES
- ----------------------------------------------------
(a) The following documents are filed as part of this report:

(1) Financial Statements
The required financial statements of the Company and its subsidiaries
are included in Part II, Item 8, on pages 119 through 160 of this
Annual Report on Form 10-K.

(2) Supplemental Financial Statement Schedules
The required supplemental schedule of the Company and its subsidiaries
is included in Part II, Item 8 on page 158 of this Annual Report on
Form 10-K.

(3) Exhibits
A complete listing of exhibits is included on pages 167 through 171 of
this Annual Report on Form 10-K.

164

FIVE-YEAR SUMMARY - OPERATING, FINANCIAL AND OTHER DATA
(Dollars in Thousands Except for Per Share Amounts)

YEAR ENDED JUNE 30, 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------

OPERATING:
Revenues $781,304 $784,885 $679,579 $648,134 $568,177
Depreciation 42,353 40,836 37,758 32,725 28,132
Amortization of Intangible Assets 15,213 14,748 2,574 811 3,904
Interest Expense 9,047 7,834 1,280 807 400
Income Before Cumulative Effect of Change
in Accounting 26,734 58,061 61,148 67,055 57,776
Net Income 28,544 58,061 61,148 67,055 57,776
Diluted Earnings per Common Share (EPS)-
Income Before Cumulative Effect of Change
in Accounting 0.38 0.82 0.87 0.95 0.82
Diluted Earnings per Common Share (EPS)-
Net Income 0.40 0.82 0.87 0.95 0.82
Shares Used in Calculating Diluted EPS
(in Thousands) 70,591 70,757 70,336 70,594 70,662
FINANCIAL POSITION:
Cash and Cash Equivalents 161,823 146,227 93,471 42,515 13,859
Total Assets 910,035 884,132 841,416 450,458 376,321
Total Funded Debt 225,000 250,000 290,000 - -
Total Shareholders' Equity 507,924 478,257 415,667 353,546 284,671
OTHER SELECTED DATA:
Cash Provided by Operating Activities 87,558 134,427 100,193 113,507 89,895
Capital Expenditures 42,909 42,808 43,762 85,873 76,933
DeVry University Fall Term
Student Enrollment 51,818 54,275 54,884 57,521 54,482
Shares Outstanding at Year-end
(in Thousands) 70,475 70,331 70,022 69,899 69,755
Closing Price of Common Stock
at Year-end 19.90 27.42 23.29 22.84 36.12
Price Earnings Ratio on Common Stock FN(1) 50 33 27 24 44

<FN>
<FN>1 Computed on trailing four quarters of earnings per common share.
</FN>

165

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

DeVry Inc.

Date: September 12, 2005 By /s/Dennis J. Keller
--------------------
Dennis J. Keller
Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and dates indicated below.

Signature Title Date
- --------- ----- ----

/s/Dennis J. Keller
- -------------------
Dennis J. Keller Chairman and Director 9/12/2005

/s/Ronald L. Taylor
- -------------------
Ronald L. Taylor President, Chief Executive
Officer and Director 9/12/2005

/s/Norman M. Levine
- -------------------
Norman M. Levine Senior Vice President, Chief
Financial Officer, and
Principal Accounting Officer
9/12/2005

/s/Charles A. Bowsher
- ---------------------
Charles A. Bowsher Director 9/7/2005

/s/David S. Brown
- -----------------
David S. Brown Director 9/6/2005

166

SIGNATURES (CONTINUED)

Signature Title Date
- --------- ----- ----

/s/Connie R. Curran
- -------------------
Connie R. Curran Director 9/6/2005

/s/Frederick A. Krehbiel
- ------------------------
Frederick A. Krehbiel Director 8/31/2005

/s/Robert C. McCormack
- ----------------------
Robert C. McCormack Director 9/2/2005

/s/Julie A. McGee
- -----------------
Julie A. McGee Director 9/1/2005

/s/Harold T. Shapiro
- --------------------
Harold T. Shapiro Director 8/31/2005

167

INDEX TO EXHIBITS
-----------------

Exhibit Sequentially Incorporated by
Number Exhibit Numbered Page Reference to:
- ------ ------- ------------- -------------

2(a) Stock Purchase Agreement and Exhibit 2 to the
amendments regarding Company's Form 8-K
purchase of Dominica filed May 23, 2003
Management, Inc. dated as of
March 19, 2003

3(a) Certificate of Amendment of Exhibit 3(a) to the
Restated Certificate of Company's Form 10-K
Incorporation of the for the year ended
Registrant June 30, 1995

3(b) Certificate of Amendment of Exhibit 3.1 to the
Restated Certificate of Company's Form S-3,
Incorporation of the #333-22457 dated
Registrant February 27, 1997

3(c) Amended and Restated By-Laws Exhibit 3.1 to the
of the Registrant Company's Form 8-K
dated August 9,
2005

4(a) Credit Agreement, dated as Exhibits 4.1, 4.2
of May 16, 2003, between and 4.3 to the
DeVry Inc. and Global Company's Form 8-K
Education International, filed June 2, 2003
Inc. as borrowers, and
certain financial
institutions and Bank of
America, N.A. as lenders

4(b) Note Purchase Agreement, Exhibits 4.4 and
dated as of May 16, 2003, 4.5 to the
between DeVry Inc. and Company's Form 8-K
Global Education filed on June 2,
International, Inc. as 2003
borrowers, and certain
financial institutions as
lenders

168

Exhibit Sequentially Incorporated by
Number Exhibit Numbered Page Reference to:
- ------ ------- ------------- -------------

4(c) Waiver to Credit Agreement Exhibit 4(c) to the
dated as of June 9, 2004, Company's Form 10-K
between DeVry Inc. and for the year ended
Global Education June 30, 2004
International, Inc. as
borrowers and certain
financial institutions and
Bank of America, N.A. as
lenders

4(d) First Amendment, dated as of Exhibit 4(d) to the
June 29, 2004 to Credit Company's Form 10-K
Agreement between DeVry Inc. for the year ended
and Global Education June 30, 2004
International, Inc. as
borrowers and certain
financial institutions and
Bank of America, N.A. as
lenders

10(a) Registrant's Amended and Exhibit 10.1 to the
Restated Stock Incentive Company's Form S-3,
Plan #333-22457 dated
February 27, 1997

10(b) Registrant's 1991 Stock Exhibit 10.3 to the
Incentive Plan Company's Form S-3,
#333-22457 dated
February 27, 1997

10(c) Registrant's 1994 Stock Exhibit 10.2 to the
Incentive Plan Company's Form S-3,
#333-22457 dated
February 27, 1997

10(d) Registrant's 1999 Stock Exhibit 10(d) to
Incentive Plan the Company's Form
10-K for the year
ended June 30, 2000

10(e) Amended and Restated DeVry Exhibit 10(e) to
Inc. 1999 Stock Incentive the Company's Form
Plan 10-K for the year
ended June 30, 2002

169

Exhibit Sequentially Incorporated by
Number Exhibit Numbered Page Reference to:
- ------ ------- ------------- -------------

10(f) Registrants 2003 Stock Exhibit A to the
Incentive Plan Company's
definitive Proxy
Statement for the
Annual Meeting of
Shareholders on
10(g) DeVry Inc. Amended and November 18, 2003.
Restated Profit Sharing
Retirement Plan dated Exhibit 10(d) to
effective as of July 1, 1992 the Company's Form
10-K for the year
ended June 30, 1996

10(h) First Amendment to DeVry Exhibit 10(e) to
Inc. Amended and Restated the Company's Form
Profit Sharing Retirement 10-K for the year
Plan ended June 30, 1996

10(i) Amendment to DeVry Inc. Exhibit 10(f) to
Amended and Restated Profit the Company's Form
Sharing Retirement Plan 10-K for the year
ended June 30, 1997

10(j) Amendment to DeVry Inc. Exhibit 10(g) to
Amended and Restated Profit the Company's Form
Sharing Retirement Plan 10-K for the year
ended June 30, 1997

10(k) Amendment to DeVry Inc. Exhibit 10(h) to
Amended and Restated Profit the Company's Form
Sharing Retirement Plan 10-K for the year
ended June 30, 1997

10(l) Employee Stock Purchase Plan Exhibit 10(f) to
the Company's Form
S-3, #33-58636
dated February 22,
1993

10(m) First Amendment to Employee Exhibit 10(h) to
Stock Purchase Plan the Company's Form
10-K for the year
ended June 30, 1994

10(n) Deferred Compensation Plan Exhibit 10(k) to
the Company's Form
10-K for the year
ended June 30, 1999

170

Exhibit Sequentially Incorporated by
Number Exhibit Numbered Page Reference to:
- ------ ------- ------------- -------------

10(o) Form of Indemnification Exhibit 10(n) to
Agreement between the the Company's Form
Registrant and its Directors 10-K for the year
ended June 30, 2003

Exhibit 10.2 to the
10(p) Letter Agreement between the Company's Form 8-K
Registrant and Dennis J. dated August 9,
Keller dated November 2, 2005
2004

10(q) Letter Agreement between the Exhibit 10.3 to the
Registrant and Dennis J. Company's Form 8-K
Keller Dated August 9, 2005 dated August 9,
2005

10(r) Employment Agreement between Exhibit 10(a) to
the Registrant and Ronald L. the Company's Form
Taylor 10-Q for the
quarter ended
December 31, 2002

10(s) Senior Advisor Agreement Exhibit 10(b) to
between the registrant and the Company's Form
each of Dennis J. Keller and 10-Q for the
Ronald L. Taylor quarter ended
December 31, 2002

10(t) Employment Agreement between Exhibit 10(q) to
the registrant and Daniel M. the Company's Form
Hamburger 10-K for the year
ended June 30, 2003

21 Subsidiaries of the
Registrant 172

23 Consent of Pricewaterhouse-
Coopers LLP, independent
registered public accounting
firm 174

31 Rule 13a-14(a)/15d-14(a)
Certifications 175

32 Section 1350 Certifications 179

171

Exhibit Sequentially Incorporated by
Number Exhibit Numbered Page Reference to:
- ------ ------- ------------- -------------

99(a) Policy on Pre-Approval of Exhibit 99(a) to
Audit and Permissible Non- the Company's Form
Audit Services 10-K for the
quarter ended June
30, 2004

99(b) Director Nominating Policy Exhibit 99(b) to
the Company's Form
10-K for the year
ended June 30, 2004

99(c) Policy for Shareholder Exhibit 99(c) to
Communication with Directors the Company's Form
10-K for the year
ended June 30, 2004