SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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


For the fiscal year ended March 31, 2002          Commission file number 1-13722

                          WHITMAN EDUCATION GROUP, INC.
             (Exact Name of Registrant as Specified in its Charter)

  State of Florida                                         22-2246554
--------------------------------------    --------------------------------------
(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
  Incorporation or Organization)

4400 Biscayne Boulevard, Miami, FL , 33137                (305) 575-6510
------------------------------------------     ---------------------------------
(Address of Principal Executive Offices)        (Registrant's Telephone Number,
                                                      Including Area Code)


           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT


Title of Each Class                    Name of Each Exchange on Which Registered
--------------------------             -----------------------------------------
Common Stock, No Par Value                       American Stock Exchange

     Indicate by check mark whether the registrant: (1) has filed all reports 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. [X]

     As  of  June  3,  2002,  there  were  13,924,670  shares  of  Common  Stock
outstanding.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant on June 3, 2002 was approximately $60,509,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Certain  portions of our  Definitive  Proxy  Statement  for our 2002 Annual
Meeting of Stockholders  scheduled to be held in August 2002 are incorporated by
reference into Part III of this Report.





                                       1




                          WHITMAN EDUCATION GROUP, INC.
                           ANNUAL REPORT ON FORM 10-K
                        FOR THE YEAR ENDED MARCH 31, 2002

                                TABLE OF CONTENTS
                                                                           PAGE
                                     PART I

Item 1.    Business......................................................      3

Item 2.    Properties....................................................     20

Item 3.    Legal Proceedings.............................................     21

Item 4.    Submission of Matters to a Vote of Security Holders...........     21
           Executive Officers of the Registrant..........................     21

                                     PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder
           Matters.......................................................     22

Item 6.    Selected Financial Data.......................................     24

Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations.........................................     25

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk....     35

Item 8.    Financial Statements and Supplementary Data...................     35

Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure......................................     35

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant............     36

Item 11.   Executive Compensation........................................     36

Item 12.   Security Ownership of Certain Beneficial Owners and Management     36

Item 13.   Certain Relationships and Related Transactions................     36

                                     PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on
           Form 8-K......................................................     36



                                       2




                                     PART I

Item 1.           Business.

     You are cautioned that the following text concerning our business should be
read in  conjunction  with  the  "Forward-Looking  Statements;  Business  Risks"
appearing at the end of Item 1 and that certain  statements  made in this Annual
Report on Form 10-K are qualified by the risk factors set forth in that section.
Please keep in mind while reading this report that:

     "We," "Us," "Our" and "Whitman" refer to Whitman  Education Group, Inc. and
     its subsidiaries.

     "Colorado  Tech"  refers  collectively  to the three  campuses  of Colorado
     Technical University.

     "Sanford-Brown"  refers  collectively  to our  five  Sanford-Brown  College
     campuses.

     "UDS" refers collectively to the fifteen Ultrasound Diagnostic Schools.


General

     We are a proprietary provider of career-oriented  postsecondary  education.
Through three wholly-owned  subsidiaries,  we currently operate 23 schools in 13
states offering a range of graduate, undergraduate and non-degree certificate or
diploma programs primarily in the fields of information  technology,  healthcare
and business to more than 8,000 students.

     We are organized into a University  Degree Division and an Associate Degree
Division  through  which we offer  education  programs.  The  University  Degree
Division  primarily  offers  doctorate,  master  and  bachelor  degrees  through
Colorado  Tech.  The Associate  Degree  Division  offers  associate  degrees and
diplomas or certificates through Sanford-Brown and UDS.

     Our  students  are  predominantly  adults who  commute to our  schools  and
require limited ancillary student services.  The students are seeking to acquire
basic  knowledge and skills  necessary for  entry-level  employment in technical
careers or to  acquire  new or  additional  skills to either  change  careers or
advance in their current careers.

     The majority of our students rely on funds received from federal  financial
aid programs under Title IV of the Higher Education Act of 1965, as amended,  to
pay  for  a  substantial   portion  of  their  tuition.   Accordingly,   we  are
substantially dependent upon Title IV funds for the majority of our revenues and
the loss of our ability to receive Title IV funds would have a material  adverse
effect on our business and results of operations.

     Our executive  offices are located at 4400 Biscayne  Boulevard,  6th Floor,
Miami, Florida 33137, and our telephone number is (305) 575-6510.










                                       3




Background

     We were originally incorporated in New Jersey in 1979. In 1983, we acquired
two UDS schools in New York which offered non-degree programs only in diagnostic
medical  ultrasound.  Enrollment  in the two schools was less than 50  students.
Over the next nine years,  we opened eight  additional UDS schools and increased
our total enrollment to approximately 400 students.

     In 1992, Dr. Phillip Frost invested in Whitman and became our Chairman.  At
the time of his investment,  we had revenues of approximately  $3.8 million from
UDS  operations,  and total  enrollment  at the ten  existing  UDS  schools  was
approximately  675.  We  continued  to  expand  UDS by  adding  five  additional
locations by 1994, for a total of 15 locations.

     In 1994,  we began to expand the scope of our  business  to offer a broader
range of  certificate  programs in our UDS schools.  Beginning in late 1994,  we
began offering  cardiovascular  technology and medical assisting programs in our
UDS schools. In addition,  in 1994 we began to evaluate  acquisition  candidates
that  would  permit us to offer a  broader  range of  career-oriented  programs,
including degree-based programs.

     In  December  1994,  we  acquired  Sanford-Brown,  a  nationally-accredited
college  founded in 1868,  which offers  associate  degree programs in business,
computer technology and healthcare. With three campuses in and around St. Louis,
Missouri,  one in Kansas  City,  Missouri  and one in  Granite  City,  Illinois,
Sanford-Brown   added   approximately   1,500   students   to  our   enrollment.
Sanford-Brown,  together with UDS, created a network of 20 schools offering both
associate degrees and non-degree programs in healthcare,  information technology
and business. These 20 schools comprise our Associate Degree Division.

     In March 1996,  we  relocated  our  headquarters  from New Jersey to Miami,
Florida and we further  broadened  our degree  program  offerings  by  acquiring
Colorado Tech in Colorado Springs, Colorado. Founded in 1965, Colorado Tech is a
regionally-accredited   institution  offering  doctorate,  master  and  bachelor
degrees in various  information  technology  and  business  fields.  Through the
acquisition  of Colorado  Tech,  we realized one of our goals of offering a full
range of degree  programs.  The maturity of Colorado Tech and the quality of its
programs  also  created  the  opportunity  for us to expand by  replicating  the
Colorado  Tech model  either in new  locations  or  through  the  conversion  of
acquired institutions. Colorado Tech comprises our University Degree Division.

     Colorado  Tech began an expansion  program in late 1996.  In October  1996,
Colorado  Tech  opened its second  campus in Denver,  Colorado;  and in December
1996,  Colorado  Tech  expanded its  educational  content and  geographic  scope
through the  acquisition of two campuses of Huron  University in Huron and Sioux
Falls, South Dakota. Huron University, which was founded in 1883, offered an MBA
program as well as bachelor  degree programs in healthcare,  business,  computer
technology and education.  After the acquisition of Huron University,  the Sioux
Falls campus was converted into an additional  location of Colorado Tech because
both the Sioux  Falls  campus  and  Colorado  Tech  principally  serve the adult
learner - generally, working adults seeking to advance in an existing career. In
addition,  Huron  University's  MBA program was installed at the other  Colorado
Tech campuses.

     Although the  curricula  was  career-oriented  at Huron  University,  Huron
University's  Huron  campus  principally  directed  its efforts to serving  more
traditional students, younger adults pursuing degree-based higher education upon
graduation  from high  school.  There are  fundamental  differences  in a campus
serving  working adults and a campus  serving more  traditional  students.  As a
consequence of a strategic  decision to focus our efforts on adult learners,  in
August 1999 we sold our Huron  University  campus in Huron,  South  Dakota to an
investor group including  members of the campus  management team. As part of the
sale, we agreed to guarantee $1.1 million of the indebtedness that the purchaser
assumed in the transaction,  and we retained a minority  interest in the school.
In addition,  we extended a loan of $500,000 to the former  campus  President to
assist him in funding the transaction.



                                       4


     In April  2001,  the  investor  group sold the  school to a  not-for-profit
college.  This transaction  released us from any further obligations  associated
with  the  school,  including  our  guarantee.  In  connection  with the sale we
recorded a one-time non-recurring non-cash charge of approximately $1.2 million,
or $0.05 per diluted share,  in the fiscal quarter ended March 31, 2001 relating
to  our  minority  interest  in the  campus.  For  further  discussion  of  this
transaction see  "Management's  Discussion and Analysis of Financial  Conditions
and Results of Operations - Divestiture of Huron University".

     The UDS Pittsburgh  campus stopped admitting new students in February 2002,
and is expected to close after existing  students have completed their programs.
These students are expected to finish their programs by October 2002.


The Postsecondary Education Market

     The  postsecondary  education  market in the United  States is estimated to
exceed $235 billion  annually,  with more than 15.2 million students enrolled in
over  6,600  postsecondary  institutions  eligible  to  participate  in Title IV
federal aid programs.  According to the United  States  Department of Education,
the population enrolled in such institutions will increase by nearly 1.8 million
students to over 17 million students by the year 2011.  Further, of the Title IV
financial aid eligible  institutions,  approximately 2,500 are for-profit,  with
approximately  800  of  those  offering  associate  degrees  or  higher.   Total
enrollment  in  for-profit  institutions  is estimated to be less than 5% of the
overall postsecondary education market.

     Additionally,  we believe that the market for entry-level  associate degree
candidates is enhanced by the  increasing  number of new high school  graduates,
projected to increase from 2.8 million in 1999 to 3.1 million in 2011.  Further,
we believe  the market  for entry  level  associate  degree  candidates  is also
enhanced by an increase in the  percentage  of recent high school  graduates who
continue their education after graduation.  According to the National Center for
Education  Statistics,  this percentage increased from approximately 53% in 1983
to 63% in 2000. In addition,  the number of adult learners is increasing.  Adult
learners  represent  a large  group of  postsecondary  students  that has  grown
significantly  in recent years.  Since 1970, the percentage of students over the
age of 24 has risen from 28% of all  postsecondary  students to more than 39% or
5.8 million in 1999, according to the National Center for Education Statistics.

     Further,  the continuing  shift in the information age from  non-skilled to
skilled  workers is dramatic  and is expected to continue to drive growth in the
postsecondary  education  market.  According to economists,  in 1950, 40% of the
workforce in the United States was considered  skilled or professional;  in 1991
this number had risen to 65% and, in the year 2000 it was projected,  85% of the
jobs required education or training beyond high school.  This shift is reflected
by the income premium placed on postsecondary education. According to the United
States Census  Bureau,  in 2000, a full-time male worker over the age of 24 with
an  associate  degree  earned an average of 29% more per year than a  comparable
worker with only a high school diploma, and a full-time male worker over the age
of 24 with a  bachelor  degree  earned  an  average  of 88% more per year than a
comparable worker with only a high school diploma.


Business Strategy

     We intend to  capitalize  on what we believe  are  favorable  trends in the
postsecondary education market by focusing on career-oriented education programs
designed  primarily for adult  learners  seeking to acquire basic  knowledge and
skills  necessary for entry-level  employment in new careers or advance in their
current careers.  Having established a broad base of educational content offered
in a broad  range of degree  (associate,  bachelor,  master and  doctorate)  and
non-degree  programs,  we believe we are well-positioned to focus our efforts on
further internal growth.


                                       5


     In the short  term,  we believe  that our best  opportunity  for  achieving
growth  will come from the  integration  of existing  operations  with the basic
objectives of  increasing  revenues at existing  schools and  improving  overall
operating  efficiencies  at each school and within our operations as a whole. To
accomplish our goal of increasing  revenues from our existing schools, we intend
to increase  enrollment  by adding  curricula at our existing  locations  and by
improving  our  marketing  efforts.  We also  intend to expand  our  educational
programs by  developing  new  curricula.  To  accomplish  our goal of increasing
operating  efficiencies  at each school and within our operations as a whole, we
intend to continue to leverage our  infrastructure  by increasing  our marketing
efforts, improving the distribution of our curricula among our existing campuses
and developing new high demand programs.

     Also, in the short term, we are seeking to expand the  geographic  scope of
our business by offering  Colorado  Tech's degree and  professional  certificate
programs at the site of large  employers.  Currently,  we offer employer on-site
programs at four  locations.  In  addition,  in July 2000,  Colorado  Tech began
offering internet delivered higher education courses.  Initially,  it will focus
on masters  level courses and  professional  certificate  programs.  Ultimately,
Colorado Tech will seek to offer full on-line degree programs.

     While we will  continue  to strive  for  increased  revenues  and  enhanced
operating  efficiencies  from our current  operations  in the short term, in the
intermediate  and longer term, we will seek to expand our network of campuses by
opening  new  campuses.  We may  establish  new  locations  where we believe the
population of working adults,  the local employment  market, the availability of
management  talent  and  demographic  trends  will  permit  us  to  successfully
replicate our operational model.  Establishment of new locations will be subject
to our ability to comply with or satisfy applicable  regulatory  requirements of
the United States  Department of Education and state licensing and accreditation
requirements.  We may also augment our  expansion  through  selective  strategic
acquisitions   where  an  acquisition  is  a  more  feasible   alternative  both
financially and operationally.

Operating Structure

     We  operate  as two  divisions:  the  University  Degree  Division  and the
Associate Degree Division.  Each division focuses on a different  segment of the
postsecondary  career  education  market.  Our corporate office provides various
centralized  administrative  services  to  each  of  our  divisions  and  has  a
management  structure  which  develops  and  implements  corporate  policies and
procedures  within each division.  Each division has campus managers who oversee
the daily  operations  of their  campuses  and  district  directors  who oversee
multiple  campus  locations.  We believe that this management  structure  allows
local  school  management  to  develop  valuable  local  market  experience  and
relationships  with both the community and employers that are vital to the adult
career education market, while still realizing the economies of scale and degree
of control associated with centralization.

     The University  Degree Division is currently  comprised of Colorado Tech, a
regionally-accredited   institution.  Students  attending  the  three  principal
Colorado Tech campuses are typically  working adults seeking to advance in their
current  careers.  Colorado Tech offers various  bachelor,  master and doctorate
degrees in  information  technology,  business and  management.  We believe that
flexible  course  structures,  class  schedules  designed for the working adult,
small class  sizes and the use of state of the  practice  computer  laboratories
have solidified Colorado Tech's position as a recognized leading source of adult
education in its current markets and have  established a successful,  replicable
model for growth and expansion into new markets.


                                       6


     The Associate  Degree Division  focuses on the adult learner who desires to
rapidly  change  careers or to quickly enter a new career  field.  The Associate
Degree Division is currently  comprised of Sanford-Brown  and UDS, which provide
adult  students with associate  degrees and  professional  certificate  programs
primarily  in the areas of  healthcare,  information  technology  and  business.
Sanford-Brown  is a  nationally-accredited  institution  that  provides  various
associate degrees in computer  technology,  business,  and various allied health
fields   and   similar   professional   certificate   programs.   UDS  is   also
nationally-accredited   and  provides   professional   certificate  programs  in
diagnostic medical  ultrasound,  cardiovascular  technology,  medical assisting,
health information specialist and surgical technology.

     For financial and other information  relating to our two divisions see Note
15 to our Consolidated Financial Statements filed herewith.


Educational Programs

     We offer a range of  career-oriented  postsecondary  educational  programs,
substantially  all  of  which  are  in  the  areas  of  healthcare,  information
technology and business.  We offer various  concentrations  in these programs at
the associate, bachelor, master and doctorate levels as well as the professional
diploma and certificate levels. Our programs are designed primarily to serve the
adult  learner  seeking to acquire  basic  knowledge  and skills  necessary  for
entry-level  employment or to acquire new or additional skills to change careers
or to advance in their current careers.  Each institution  maintains  curriculum
action  groups,  comprised of faculty,  campus  program  directors and corporate
curriculum  specialists,  that  periodically  review and revise  curricula  as a
result  of  feedback  from  students,   local  advisory   boards   comprised  of
professionals in career fields related to the programs and local employers.



                                       7


Our educational programs are set forth below:

                           UNIVERSITY DEGREE DIVISION

                          Colorado Technical University
--------------------------------------------------------------------------------
DOCTORATE PROGRAMS                         ASSOCIATE DEGREE PROGRAMS
Computer Science                           e-Business
Management                                 Information Technology
                                           Information Technology System Support
MASTER DEGREE PROGRAMS                     Electronic Technology
Computer Science                           Management Information Systems
Computer Engineering                       Business Management
Electrical Engineering                     Accounting
Management                                 Medical Assisting
Business Administration                    Criminal Justice

                                           CERTIFICATE PROGRAMS
BACHELOR DEGREE PROGRAMS                   C++ Programming
Computer Engineering                       Comp TIA A+
Computer Science                           Comp TIA Network
e-Business                                 Computer Network Telecommunications
Information Technology                     Computer Systems Security
Information Technology Management          Contract Management
Telecommunications Engineering Technology  Digital Telecommunications
Electrical Engineering                     e-Business Entrepreneurship
Electrical Engineering Technology          e-Business Management
Management                                 Logistics Systems Management
Management Information Systems             MCSE Preparation
Criminal Justice                           Object-Oriented Development
Accounting                                 Professional Communication
Finance                                    Project Management
Project Management                         Semiconductor Manufacturing
                                           Software Engineering
                                           Quality Management
                                           Visual Basic Programming
                                           Java Programming
                                           Oracle Application Development
                                           Oracle Database Administration
                                           Software Project Management
                                           Web Administration
                                           Web Application Development
                                           Web Page Development
                                           Web Programming & e-Commerce
                                           UNIX Programming and Administration


                            ASSOCIATE DEGREE DIVISION

                              Sanford-Brown College
--------------------------------------------------------------------------------

ASSOCIATE DEGREE PROGRAMS                  PROFESSIONAL DIPLOMA PROGRAMS
Network Technology                         Network Technology
Computer Support Specialist                Computer Support Specialist
Computer Support Technician                Computer and Internet Programming
Computer and Internet Programming          Practical Nursing
Respiratory Therapy                        Medical Assistant
Radiography                                Accounting
Nursing                                    Office Technology
Medical Assistant                          Medical Coding/Billing Specialist
Business Administration
Office Administration                      CERTIFICATE PROGRAM
Paralegal Studies                          Network Specialist
Network Administration
Web Programming
Health Information Technology

                          Ultrasound Diagnostic School
--------------------------------------------------------------------------------
SPECIALIZED ASSOCIATE DEGREE              PROFESSIONAL DIPLOMA PROGRAMS
PROGRAMS (Florida campuses only)          Diagnostic Medical Ultrasound
Diagnostic Medical Ultrasound             Non-Invasive Cardiovascular Technology
Non-Invasive Cardiovascular Technology    Medical Assistant
                                          Surgical Technology
                                          Health Information Specialist



                                       8




     The following table provides information as of April 30, 2002 regarding the
programs offered by each of our schools:
                                                                      LENGTH OF
                            TYPE OF      NUMBER OF      NUMBER OF       PROGRAM
SCHOOL                      PROGRAM      LOCATIONS      STUDENTS    (IN MONTHS)1
---------------------      ----------  ------------   -----------  -------------
University Degree Division
--------------------------
Colorado Technical
University                 Doctorate         1             51           36
                           Master            3            512         18-21
                           Bachelor          3          1,664           36
                           Associate         3            391           18
                           Non-degree        3            156         Varies
                                                          ---
   School Total                                         2,774
                                                        =====


Associate Degree Division
--------------------------
Sanford-Brown College      Associate         4            712         14-21
                           Non-degree        5            863          8-14
                                                        -----
   School total                                         1,575
                                                        =====

Ultrasound Diagnostic
   School                  Non-degree        15         4,360          8-19
                           Specialized
                             Associate       3            293         12-19
                                                        -----
   School total                                         4,653
                                                        =====

   Total                                                9,002
                                                        =====


     Tuition  and fees for our  programs  vary  depending  on the  nature of the
program and the location of the school.  Based on rates to be implemented during
the current  fiscal year,  tuition and fees for the  non-degree  programs in the
Associate Degree Division range from  approximately  $11,000 for the eight-month
medical  assistant  program  offered  by UDS to  approximately  $24,000  for the
longest  associate degree programs offered by  Sanford-Brown.  At Colorado Tech,
tuition and fees range from  approximately  $37,000 to $40,000 for the  bachelor
degree programs,  $15,000 to $16,000 for the master's program and  approximately
$31,000 for the doctorate program.

     Academic schedules are designed to meet the needs of the adult student. UDS
offers  all of its  programs  during  both  day and  evening  classes  beginning
generally  every five weeks.  Sanford-Brown's  programs begin  quarterly and are
offered  both during the day and  evening.  Degree  programs at Colorado  Tech's
Colorado Springs, Denver and Sioux Falls campuses are offered principally in the
evening to  accommodate  the  Colorado  Tech  student who is typically a working
adult.

 --------------------------
     1 At Colorado  Tech,  the working  adult  students  typically do not attend
their programs on a full-time basis.  Therefore,  it generally takes longer than
the stated program length to complete the program.


                                       9



Student Recruitment

     We utilize a wide array of advertising and marketing  strategies to attract
students to our schools,  including  various  combinations of newspaper,  radio,
television and direct mail. We market each of our schools on a local basis,  and
draw the vast  majority of our students  from the local areas  surrounding  each
school.


Student Admissions

     Each school employs several  admissions  representatives  who interview and
enroll students on-site and a variety of support personnel to assist students in
the admissions process. Each of our schools has admission  requirements designed
to  assess  whether  the  entering   students  have  the  educational  and  work
experience,  personal  circumstances and the ability necessary to complete their
program of study.  Admission  requirements  differ  from  program to program and
school  to  school,  but at a  minimum,  each  applicant  must be a high  school
graduate or possess the recognized equivalent  credential,  perform successfully
on a personal  interview,  and in some cases,  perform adequately on an entrance
examination.  The admissions process is monitored by a director of admissions in
each location, and periodically reviewed for compliance by corporate personnel.


Graduate Career Services

     Each of our schools  operates a career  services  department  that provides
career  development  services to current  students  and alumni.  These  services
include various combinations of seminars/courses  covering  interviewing skills,
resume  preparation  and  enhancement,  job search skills,  and career  planning
advice. In addition, the career services departments of the various schools make
contact  with  potential  employers  on behalf  of the  schools  and  individual
graduates,  schedule  interviews,  attempt to obtain feedback regarding graduate
performance  on  interviews  and on the job,  and provide  on-going  replacement
assistance to graduates.


Competition

     The postsecondary  education industry is highly fragmented.  Typically,  no
single public or private school or group of schools dominates markets on a local
or national  basis.  Accordingly,  each of our schools has various  competitors,
which may include public and private colleges,  other proprietary  institutions,
hospital based programs and institutions offering  Internet-based  curricula. As
discussed above, Colorado Tech is exploring  Internet-based courses and programs
and is considering  offering  entire degree  programs over the Internet.  To the
extent that Colorado Tech enters the market for Internet-based  degree programs,
it will  become  subject  to  competition  from a larger  group  of  educational
institutions  both  public  and  private,  including  institutions  out  of  the
geographic areas in which Colorado Tech campuses are located with which Colorado
Tech has not traditionally competed.

     Competition in the career-oriented postsecondary education market for adult
learners is typically  based on the nature and quality of the programs  offered,
flexibility  of  class   scheduling,   service  to  the  student  customers  and
employability  of  graduates.  Certain  public and  private  colleges  may offer
programs  similar  to ours at a lower  tuition  cost  due in part to  government
subsidies,  foundation grants, tax deductible  contributions and other financial
resources  not  available  to  proprietary  institutions.  However,  tuition  at
private,  non-profit  institutions is generally  higher than the average tuition
rates of our schools.


                                       10



Supervision and Regulation

     General.  Each of our schools is subject to regulation by: (i) the state in
which it  operates;  (ii) its  accrediting  body;  and  (iii)  because  they are
certified to participate in federal financial aid programs ("Title IV Programs")
authorized  under the Higher  Education Act of 1965,  as amended,  by the United
States  Department of Education.  The loss of authorization to operate in states
in which we currently operate, the withdrawal of accreditation from our schools,
the loss of our schools' accrediting bodies  accreditations,  or the loss of the
schools'  eligibility  to participate in Title IV Programs would have a material
adverse effect on our operations.

     State  Authorization.  Except for South  Dakota  which no longer  regulates
educational  institutions,  we are required to have  authorization to operate in
each state where we physically  provide  educational  programs.  Certain  states
accept  accreditation  as  evidence  of  meeting  minimum  state  standards  for
authorization.  Other states require  separate  evaluations  for  authorization.
Generally,  the addition of a program or the addition of a new location  must be
included in the  school's  accreditation  and/or be approved by the  appropriate
state authorization  agency. Our schools are currently  authorized to operate in
all  states  in which we have  physical  locations  and  such  authorization  is
required.  State  authorization  is required  for an  institution  to become and
remain eligible to participate in Title IV Programs.

     Accreditation. Accreditation is a non-governmental process through which an
institution  submits itself to  qualitative  review by an  organization  of peer
institutions.  There are  three  types of  accrediting  agencies:  (i)  national
accrediting  agencies,  which accredit  institutions on the basis of the overall
nature of the institutions without regard to geographic location;  (ii) regional
accrediting   agencies,   which  accredit  institutions  on  the  basis  of  the
institution's  overall  nature but are primarily  limited to defined  geographic
areas; and (iii)  programmatic  accrediting  agencies,  which accredit  specific
educational  programs  offered  by  institutions  without  regard to  geographic
location.  Accrediting  agencies  primarily  examine the academic quality of the
instructional  programs  of an  institution,  and a grant  of  accreditation  is
generally  viewed as validation  that an  institution's  programs meet generally
accepted academic standards. Accrediting agencies also review the administrative
and financial  operations of the institutions  they accredit to ensure that each
institution has the resources to perform its educational mission.  Accreditation
can serve as the basis for the  recognition  and acceptance by employers,  other
higher education  institutions and governmental  entities of degrees and credits
awarded by an institution.

     Pursuant to  provisions  of the Higher  Education  Act, the  Department  of
Education  relies in part on accrediting  agencies and state licensing bodies to
determine   whether  an  institution's   educational   programs  qualify  it  to
participate  in the Title IV  Programs.  As required  under the Title IV Program
rules, each of our schools is accredited by an accrediting  agency recognized by
the Department of Education. If one of our schools' accrediting agencies were to
lose its  recognition  with the  Department of Education we would be required to
obtain a new  accrediting  agency for that school or risk that school losing its
eligibility to receive Title IV funds.

     The Higher Education Act requires  accrediting  agencies  recognized by the
Department of Education to review many aspects of an institution's operations to
ensure,  among other  things,  that the  education  or  training  offered by the
institution  is of  sufficient  quality  to  achieve,  for the  duration  of the
accreditation  period,  the stated objective for which the education or training
is offered. Under the Higher Education Act, a recognized accrediting agency must
perform regular inspections and reviews of institutions of higher education.

     If an accrediting agency believes that an institution or program may be out
of compliance with accrediting standards, it may require the institution to take
appropriate  action  to bring  it into  compliance,  place  the  institution  on
probation or a similar  warning status or it may direct the  institution to show
cause why its accreditation  should not be revoked.  An accrediting  agency also
may place an institution  on "reporting"  status in order to monitor one or more
specific areas of the institution's performance.  While on probation, show cause
or reporting  status,  an institution  may be required to seek permission of its
accrediting agency to open and commence instruction at new locations or initiate
new  academic  programs.  Failure to  demonstrate  compliance  with  accrediting
standards in any of these instances could result in loss of accreditation.  Each
of our schools currently maintains institutional accreditation.


                                       11


     Federal  Financial Aid  Programs.  We derive a majority of our revenue from
students who  participate in Title IV Programs  under the Higher  Education Act.
The potential  loss of any of our school's  eligibility  to participate in these
programs would have a material adverse effect on our operations.

     A brief  description  of the  Title IV  Programs  in  which we  participate
follows:

     Federal Pell Grant ("Pell"). Federal Pell Grants are a primary component of
the Title IV Programs  under which the  Department of Education  makes grants to
students who demonstrate  financial need.  Every eligible student is entitled to
receive  a Pell  Grant;  there is no  institutional  allocation  or limit on the
number of eligible  students.  For the 2001-2002  award year,  Pell Grants range
from $400 to $3,750 per year.

     Federal Supplemental Educational Opportunity Grant ("FSEOG").  FSEOG awards
are designed to supplement Pell Grants for the neediest  students.  FSEOG awards
for eligible  students  generally  range in amount from $100 to $4,000 per year.
The  availability of FSEOG awards to a particular  institution is limited by the
amount of those funds  allocated to the  institution  under a formula that takes
into account the size of the institution, its costs and the income levels of its
students.  We are  required to make a 25%  matching  contribution  for all FSEOG
program funds  disbursed.  Resources  for this  institutional  contribution  may
include  institutional  grants,  scholarships  and other  eligible funds and, in
certain states,  portions of state scholarships and grants. During the 2000-2001
award year, our required 25% institutional match was approximately $132,000.

     Federal Family Education Loan Program  ("FFEL").  The FFEL program consists
of two types of loans; Stafford loans, which are made available to students, and
PLUS  loans,  which are made  available  to parents of  students  classified  as
dependents.  Under the Stafford loan program, an eligible  undergraduate student
may  borrow up to $2,625  for the first  academic  year,  $3,500  for the second
academic year and, in some  educational  programs,  $5,500 for each of the third
and  fourth  academic  years.  A  graduate  student  may borrow up to $8,500 per
academic  year.  Eligible  students  with  financial  need  qualify for interest
subsidies  while in school and during grace periods.  Eligible  students who are
classified  as  independent  can  increase  their  borrowing  limits and receive
additional  unsubsidized Stafford loans. Such undergraduate  students can obtain
an  additional  $4,000  for each of the first and  second  academic  years  and,
depending upon the  educational  program,  an additional  $5,000 for each of the
third and fourth  academic  years.  Graduate  students may borrow an  additional
$10,000 per  academic  year.  The  aggregate  amount of FFEL funds a student may
receive  is capped at  $46,000  for  undergraduate  students  and  $138,500  for
graduate or  professional  students.  The obligation to begin repaying  Stafford
loans does not commence until six months after a student ceases enrollment as at
least a  half-time  student.  Our  schools  and their  students  use a number of
lenders and  guaranty  agencies.  While we believe that other  lenders  would be
willing to make federally guaranteed student loans to our students if loans were
no longer available from our current lenders,  we can make no assurances in this
regard.  The Higher Education Act requires the  establishment of lenders of last
resort in every  state to make  certain  loans to  students  at any school  that
cannot otherwise identify lenders willing to make federally  guaranteed loans to
its students.

     Federal Perkins Loan Program ("Perkins").  Eligible  undergraduate students
may borrow up to $4,000 under the Perkins  program  during each  academic  year,
with an aggregate  maximum of $20,000,  at a 5% interest rate and with repayment
delayed until nine months after the borrower ceases to be enrolled on at least a
half-time  basis.  Perkins  loans  are  made  available  to those  students  who
demonstrate the greatest financial need. Perkins loans are made from a revolving
account, 75% of which was initially  capitalized by the Department of Education.
Subsequent  federal capital  contributions,  with an institutional  match in the
same proportion,  may be received if an institution meets certain  requirements.
Each institution collects payments on Perkins loans from its former students and
loans those funds to students currently enrolled. Collection and disbursement of
Perkins  loans  is  the  responsibility  of  each   participating   institution.
Presently, only Colorado Tech utilizes the Perkins program. During the 2000-2001
award year, its 25% institutional match was approximately $6,000.


                                       12



     Federal Work Study ("FWS").  Under the FWS program,  federal funds are made
available  to pay up to 75% of the  cost of  part-time  employment  of  eligible
students,  based on their financial need, to perform work for the institution or
for  off-campus  public  or  non-profit   organizations.   At  least  7%  of  an
institution's  FWS  allocation  must  be  used to  fund  student  employment  in
community  service   positions.   During  the  2000-2001  award  year,  our  25%
institutional match was approximately $59,000.

     Federal Oversight of Title IV Programs. In order to participate in Title IV
Programs,  we must comply with  standards set forth in the Higher  Education Act
and the  regulations  promulgated  thereunder,  including the  demonstration  of
"financial  responsibility"  and the  "administrative  capability" to handle and
disburse Title IV funds.  Compliance  with such standards is subject to periodic
reviews by, among  others,  the  Department  of Education and state and national
agencies which guarantee the loans made in the Title IV Programs.  Disbursements
made under the Title IV Programs are subject to  disallowance  and  repayment if
such reviews result in adverse findings and if such findings are sustained after
an institution has exhausted its administrative and judicial appeals. We believe
that our  institutions  are in substantial  compliance with the Higher Education
Act and the regulations.  We cannot, however,  predict with certainty how all of
the Higher  Education Act provisions  and the  regulations  will be applied.  As
described below, a violation of the Title IV Program  requirements  could have a
material adverse effect on our financial condition or results of operations.  In
addition,  it is possible that the Higher  Education Act and the regulations may
be applied in a way that could hinder our operations or expansion plans.

     Eligibility and Certification Procedures.  The Higher Education Act and its
implementing  regulations require each institution to apply to the Department of
Education for continued  eligibility  and  certification  to  participate in the
Title IV  Programs  at least  every six  years,  when it  undergoes  a change of
control,  raises the highest  academic  credential it offers,  or, under certain
defined circumstances,  if the institution opens an additional location offering
50% or  more  of an  educational  program.  Each  of  our  schools  (other  than
Sanford-Brown which is provisionally  certified as discussed below) is currently
eligible and certified to participate in the Title IV programs.

     Provisional Certification.  Under certain circumstances, an institution may
be placed on provisional  certification  status for a period not to exceed three
years.  Provisional  certification  generally  does not  limit an  institution's
access  to Title IV funds but  differs  from  full  certification  in that (i) a
provisionally certified school may be terminated from eligibility to participate
in Title IV  Programs  without  the same  opportunity  for a  hearing  before an
independent hearing officer and an appeal to the Secretary of Education afforded
to a fully certified  school;  (ii) a provisionally  certified  institution must
seek approval before  disbursing Title IV funds to students  attending any newly
established  additional  location  that  provides 50% or more of an  educational
program; and (iii) the Department of Education may impose additional  conditions
on a provisionally certified institution's eligibility to continue participating
in Title IV Programs.  If an institution  successfully  participates in Title IV
Programs during a period of provisional  certification  but fails to satisfy the
full  certification   criteria,  the  Department  of  Education  may  renew  the
institution's provisional certification.  Any institution seeking eligibility to
participate in Title IV Programs after a change in control will be provisionally
certified for a limited period,  following which the institution may be required
to reapply  for  continued  eligibility.  Sanford-Brown  recently  has  received
provisional certification effective through March 2004 as a result of a "merger"
of the  Sanford-Brown  Colleges in Missouri and Illinois in which  Sanford-Brown
College in Illinois,  formerly a freestanding institution,  became an additional
location of Sanford-Brown College in Missouri.



                                       13


Legislative Action

     Political  and  budgetary  concerns   significantly  affect  the  Title  IV
Programs. Congress must reauthorize the Higher Education Act approximately every
six years. Accordingly, the statutory and regulatory provisions described herein
are subject to change. The most recent  reauthorization in 1998 reauthorized the
Higher  Education Act through 2003.  Congress  reauthorized  all of the Title IV
Programs in which our  schools  participate,  generally  in the same form and at
funding levels no less than for the prior year.  While the 1998  reauthorization
of  the  Higher  Education  Act  made  numerous  changes  to  Title  IV  Program
requirements,  we believe that these  changes  will not have a material  adverse
effect on our business, results of operations or financial condition.

     In addition,  Congress reviews and determines  federal  appropriations  for
Title IV Programs on an annual basis. Congress can also make changes in the laws
affecting the Title IV Programs in the annual  appropriation  bills and in other
laws it enacts between  reauthorizations  of the Higher Education Act. Because a
significant percentage of our revenue is derived from the Title IV Programs, any
action by Congress that  significantly  reduces Title IV Program  funding or the
ability of our schools or students to participate in the Title IV Programs could
have a  material  adverse  effect on our  business,  results  of  operations  or
financial  condition.  Legislative  action also may increase our  administrative
costs and require us to adjust our  practices in order for our schools to comply
fully with the Title IV Program requirements.

     The  90/10  Rule.  The  Higher   Education  Act  requires  that  an  annual
calculation be made for each  proprietary  school of the percentage of its Title
IV Program  receipts to its total receipts from Title IV eligible program funds.
Under this rule, a proprietary school will be ineligible to participate in Title
IV Programs  if,  under a modified  cash basis of  accounting  and  according to
certain assumptions imposed by the Department of Education, more than 90% of its
revenues  from its Title IV eligible  programs for the prior  fiscal year,  were
derived  from Title IV Program  funds.  If one of our  schools  were to fail the
90/10 rule for a particular  fiscal year, it would be ineligible to  participate
in Title IV Programs as of the first day of the following  fiscal year and would
be  unable to apply to  regain  its  eligibility  until  the next  fiscal  year.
Furthermore, if one of our schools violated the 90/10 rule and became ineligible
to  participate  in Title IV Programs but continued to disburse Title IV Program
funds,  the  Department of Education  would  consider all Title IV Program funds
disbursed to the institution after the effective date of the loss of eligibility
to be a liability  subject to repayment by the institution.  For the fiscal year
ended  March 31,  2002,  our  schools  met the 90/10  rule with  percentages  of
revenues derived from Title IV Program funds ranging from 29% to 78%.

     Administrative  Capability. The Higher Education Act directs the Department
of Education to assess the  administrative  capability  of each  institution  to
participate  in Title IV  Programs.  The  Department  of  Education  has  issued
regulations  that  require  each  institution  to  satisfy a series of  separate
standards.  Failure to satisfy any of the standards  may lead the  Department of
Education to determine that the institution lacks administrative capability and,
therefore, is not eligible to continue its participation in Title IV Programs or
must be placed  on  provisional  certification  status  as a  condition  of such
continued  participation.  For the fiscal year ended March 31, 2002, our schools
met all of the administrative capability requirements.

     Incentive  Compensation.  The Higher Education Act prohibits an institution
from providing any commission,  bonus or other incentive  payment based directly
or indirectly on success in securing  enrollments or financial aid to any person
or entity  engaged in any student  recruitment  or  admission  activities  or in
making decisions  regarding the awarding of student  financial  assistance.  The
Department of Education has provided only limited guidance respecting compliance
with this requirement. Our employees involved in student recruitment, admissions
or financial aid receive a salary and participate in a profit-sharing bonus plan
available to all  employees.  Based on written  guidance from the  Department of
Education,  we believe that our method of compensating  these employees complies
with the  requirements  of the Higher  Education  Act. The  regulations  do not,
however, establish clear standards for compliance, and there can be no assurance
that the  Department of Education  will  interpret its  regulations  in the same
manner as we have.


                                       14


     Financial  Responsibility.  Each eligible institution  participating in the
Title IV Programs  (except for  state-owned  institutions)  must satisfy certain
standards of financial responsibility.  To be considered financially responsible
under the  regulations,  an  institution  must,  among  other  things,  (i) have
sufficient cash reserves to make required  refunds;  (ii) be current in its debt
payments; (iii) be meeting all of its financial obligations;  and (iv) achieve a
"composite  score" of at least 1.5 based on the  institution's  Equity,  Primary
Reserve and Net Income ratios,  as calculated on the basis of the  institution's
annual  audited  financial   statements.   The  Equity  Ratio  measures  capital
resources,  ability to borrow and financial viability. The Primary Reserve Ratio
measures an institution's  ability to support current operations from expendable
resources.  The Net Income Ratio  measures an  institution's  ability to operate
profitably.

     Once these  ratios are  computed  on the basis of an  institution's  annual
audited financial  statements,  they are adjusted by strength factors,  weighted
and added to create the  composite  score which may range from  negative  one to
three. If the resulting  composite  score is 1.5 or greater,  the institution is
deemed to be financially responsible.  If the Department of Education determines
that an  institution's  composite  score is below 1.5, the institution is deemed
not to be financially  responsible.  If such an institution's composite score is
1.0 or  greater  but less  than 1.5,  and the  institution  otherwise  meets the
requisite financial responsibility requirements, the institution may continue to
participate in Title IV Programs as a financially  responsible institution for a
period of no more than three  consecutive  years,  provided its composite  score
remains  in the  range  of 1.0 to 1.4 in each of  those  years.  An  institution
participating  in Title IV Programs on this basis must  participate in the Title
IV Programs on the  reimbursement  or cash  monitoring  method of payment  under
which an institution  must disburse its own funds to students  before  receiving
Title IV Program funds and must provide the  Department of Education with timely
information with respect to certain matters and financial events. The Department
of Education  also may request  from such  institutions  additional  information
about  their  current  operations  and/or  future  plans.  In  addition,  if  an
institution is deemed not to be financially  responsible because it has achieved
a composite  score of less than 1.5, the  institution  may  establish  financial
responsibility  by  posting  an  irrevocable  letter  of  credit in favor of the
Department  of Education in an amount equal to not less than  one-half the Title
IV Program funds received by students  enrolled at such  institution  during the
prior fiscal year.

     For  purposes of these  standards,  Sanford-Brown  and  Colorado  Tech have
historically  been  evaluated  as distinct  entities,  while the  Department  of
Education has evaluated UDS on the basis of the financial performance of Whitman
as a whole.  However,  the  regulations  allow the  Department  of  Education to
evaluate an  institution  based on its own  financial  condition  or that of its
corporate  parent  and there can be no  assurance  that the  method by which the
Department  of  Education  evaluates  our schools will not change in the future.
Under  these  standards,  our  composite  score  on  a  consolidated  basis  (as
historically  applied to UDS) is 2.3, Colorado Tech's composite score is 3.0 and
Sanford-Brown's composite score is 2.9.

     Even if an institution achieves a composite score of at least 1.5, however,
it may be deemed to lack financial responsibility if (i) the institution's audit
report  contains  an  adverse,   qualified  or  disclaimed  opinion,   (ii)  the
institution's  participation in Title IV Programs has been limited, suspended or
terminated in the past five years, (iii) in the past two years, as the result of
a finding in its  compliance  audit or in a program  review by the Department of
Education,  the  institution  was required to repay an amount greater than 5% of
the funds the  institution  received  under Title IV in the year  covered by the
audit or program review,  (iv) the institution has failed in the past five years
to  timely  submit  compliance  and  financial  statement  audits,  or  (v)  the
institution failed to resolve  satisfactorily any compliance problems identified
in audit or  program  reviews.  The  institution  may also be  deemed  to be not
financially  responsible if certain  controlling  persons owe, or are associated
with another  institution  that owes,  Title IV liabilities to the Department of
Education.


                                       15


     Another measure of financial  responsibility is an institution's ability to
make timely refunds to students and the Title IV programs.  If as a result of an
audit conducted by the Department of Education,  Whitman's  independent auditor,
or a guaranty or state authorizing  agency,  there is a finding that one or more
of our  schools  did not make  timely  refunds  in either of its last two fiscal
years,  that school could be required to submit an irrevocable  letter of credit
to the Secretary of the Department of Education equal to 25 percent of the total
amount of Title IV Higher  Education  Act  program  refunds  the school  made or
should have made during its most  recently  completed  fiscal year,  in order to
maintain financial  responsibility.  Based on this standard, in October 2001, we
posted  letters  of credit  amounting  to  $420,000  as a result of late  refund
findings with respect to fiscal years 2000 and 2001.

     Cohort Default Rates.  The regulations  require the calculation of a cohort
default  rate on FFEL loans  received  by current and former  students  who have
attended our  institutions.  The cohort  default rate measures the percentage of
students who enter  repayment on FFEL loans in a particular  federal fiscal year
and  default  before  the  end  of  the  following  federal  fiscal  year.  If a
institution's official cohort default rate equals or exceeds 25% for each of its
three most recent federal  fiscal years for which data is available,  it becomes
ineligible to participate in the FFEL and Pell programs for the remainder of the
year in which the  Department  of  Education  makes that  determination  and the
subsequent two years. An institution  also may become  ineligible to participate
in all Title IV Programs if its  official  default  rate  exceeds 40% in any one
fiscal year.  Such actions may be appealed.  A school's  cohort  default rate is
published  annually by the  Department  of Education.  The most recent  official
cohort year  published  was for fiscal year 1999  (published  in October  2001).
UDS's  official 1999 rates ranged from 6.3% to 10.3%;  Sanford-Brown's  official
1999 rate was 6.3% and Colorado  Tech's  official 1999 rate was 3.3%. All of our
schools'  preliminary 2000 default rates were below 25% with no preliminary rate
exceeding  11.4%.  The  fiscal  year 1999  cohort  default  rates for all of our
schools  were  6.7% on a  weighted  average  basis;  the  average  rate  for all
proprietary   institutions  in  the  United  States  for  the  same  period  was
approximately 9.3%.

     In  addition,  as of October,  1999 an  institution  whose  Perkins  cohort
default rate is 50% or greater for three  consecutive  federal  award years will
lose  eligibility to participate in the Perkins program for the remainder of the
federal  fiscal year in which the  Department of Education  determines  that the
institution has lost its  eligibility and for the two subsequent  federal fiscal
years.  Such action may be  appealed.  The Higher  Education  Act also imposes a
penalty on institutions that have a default rate of 25% or above, by eliminating
additional  federal funds  allocated  annually to the institution for use in the
Perkins program. Only Colorado Tech participates in the Perkins program, and the
cohort default rate for that program is 11.4%.

     Change in Ownership Resulting in a Change in Control. A change of ownership
which  results in a change in control  (as  defined  below) of Whitman or one or
more  of our  institutions  will  trigger  a  review  of the  certification  and
eligibility  of all (if  Whitman  changes  ownership)  or some of our schools to
participate in Title IV Programs,  and may cause all or some of our institutions
to  lose  their  eligibility  pending   recertification  by  the  Department  of
Education.   Such  change  in   ownership   and  control   could  also   require
reauthorization  to operate by individual states and trigger a review by each of
our  school's  accrediting  bodies.  The  1998  reauthorization  of  the  Higher
Education Act provides that the  Department of Education may  provisionally  and
temporarily certify an institution  undergoing a change of control under certain
circumstances  while the  Department  of  Education  reviews  the  institution's
application  for  recertification.  The Department of Education has  implemented
regulations  that permit  institutions  to apply for such temporary  provisional
certification  within ten days after a change of  ownership  and  control.  As a
result,  it is possible for an  institution to change  ownership  resulting in a
change of control without experiencing an interruption in Title IV funding.


                                       16


     With  regard to  publicly  held  companies,  the  Department  of  Education
generally  has adopted the change of  ownership  and control  standards  used in
reporting  such events  under  federal  securities  laws. A change in control of
Whitman which would require the filing of a Current  Report on Form 8-K with the
Securities  and  Exchange  Commission  would also  require  our  schools to seek
recertification from the Department of Education as outlined above. In addition,
in accordance with Department of Education regulations effective July 1, 2001, a
publicly  held  company  participating  in the  Title IV  Programs  is deemed to
experience a change in ownership  and control when a person who is a controlling
shareholder  of the  corporation  ceases to be a  controlling  shareholder.  The
Department of Education  defines a controlling  shareholder  to be a shareholder
who holds or controls through agreement both (i) 25 percent or more of the total
outstanding voting stock of the corporation and (ii) more shares of voting stock
than any  other  shareholder.  A  controlling  shareholder  does not  include  a
shareholder  whose  sole  stock  ownership  is held (i) as a U.S.  institution's
investor as defined under securities laws, (ii) in mutual funds, (iii) through a
profit-sharing plan in which all full-time permanent employees are included,  or
(iv) through an Employee Stock Ownership Plan.

     According to Department of Education regulations, individual schools may be
deemed to experience a change in control if: the institution is sold; there is a
merger of one or more eligible institutions; the institution is divided into two
or more  institutions;  the institution is permitted to transfer its liabilities
to its  parent  corporation;  assets  comprising  a  substantial  portion of the
educational  business of its  institution  are  transferred;  or the institution
changes its status as a for-profit, nonprofit or public institution.

     A failure to obtain recertification subsequent to a change in ownership and
control  of  Whitman  would  have a  material  adverse  effect on our  financial
condition.  A  failure  to  obtain  recertification  subsequent  to a change  in
ownership  and control of an  individual  Whitman  school  would have a material
adverse effect on that school's  financial  condition.  Our acquisition of other
institutions  typically  would  result in a change of  ownership  resulting in a
change of control of the acquired institution and not of Whitman or its existing
schools. When a change in control does occur, the school's  certification by the
Department of Education following the change in control is provisional.

     Each  accrediting  body and state agency which authorizes us to operate our
schools  has  different  regulations  regarding  changes in control  which could
require  re-authorization  or  re-accreditation.  Our  failure  to obtain  state
re-authorization  or  re-accreditation  of any of our  schools  subsequent  to a
change in control would threaten the school's  eligibility to participate in the
Title IV programs.

     Compliance  Audits.  Our  institutions  are  subject  to audits or  program
compliance  reviews by various  external  agencies,  including the Department of
Education,  its Office of Inspector General and state,  guaranty and accrediting
agencies. The Higher Education Act and its implementing regulations also require
that an  institution's  administration  of Title  IV  Program  funds be  audited
annually by an  independent  accounting  firm. If the Department of Education or
another  regulatory  agency were to determine that one of our  institutions  had
improperly  disbursed  Title IV Program funds or had violated a provision of the
Higher Education Act or the implementing  regulations,  the affected institution
could be  required to repay such funds to the  Department  of  Education  or the
appropriate state agency or lender and could be assessed an administrative fine.
If the  Department  of  Education  viewed  the  violation  as  significant,  the
Department of Education  also could  transfer the  institution  from the advance
system  of  receiving   Title  IV  Program  funds  to  the  cash  monitoring  or
reimbursement  method of payment,  under which a school  must  disburse  its own
funds to students and document students'  eligibility for Title IV Program funds
before  receiving  such funds from the  Department of  Education.  Violations of
Title IV Program  requirements also could subject us to other civil and criminal
sanctions  including a proceeding  to impose a fine,  place  restrictions  on an
institution's participation in Title IV Programs or terminate its eligibility to
participate  in the Title IV  Programs.  Potential  restrictions  may  include a
suspension of an  institution's  ability to participate in Title IV Programs for
up to 60 days and/or a limitation of an institution's  participation in Title IV
programs,  either by limiting the number or percentage of students  enrolled who
may  participate  in Title IV  Programs  or by  limiting  the  percentage  of an
institution's  total receipts derived from Title IV Programs.  The Department of
Education  also may  initiate  an  emergency  action to  temporarily  suspend an
institution's  participation  in the Title IV Programs without advance notice if
it determines that a regulatory  violation  creates an imminent risk of material
loss of public funds.


                                       17


     An institution may appeal any such action  initiated by the Department with
the exception of an action placing an institution on reimbursement, although, as
described above, a provisionally  certified  institution has more limited appeal
rights.  An institution  may apply for removal of a limitation no sooner than 12
months from the effective date of the limitation and must  demonstrate  that the
violation at issue has been corrected. If the Department of Education terminates
the  eligibility of an  institution  to  participate  in Title IV Programs,  the
institution  in most  circumstances  must wait 18  months  before  requesting  a
reinstatement of its participation. An institution that loses its eligibility to
participate  in Title IV Programs  due to a violation  of the 90/10 rule may not
apply to  resume  participation  in Title IV  Programs  for at least  one  year.
Depending on the severity of the fine,  suspension  or  limitation,  such action
could have a material adverse effect on our financial  condition.  A termination
of our  eligibility  to  participate  in Title IV Programs would have a material
adverse effect on our financial condition.

     There is no proceeding pending to fine any of our institutions or to limit,
suspend or  terminate  any of our  institutions'  participation  in the Title IV
Programs.

     Expansion of Programs and Locations.  Generally, if an institution eligible
to  participate  in Title IV Programs adds an  educational  program after it has
been designated as an eligible  institution,  the institution  must apply to the
Department of Education to have the additional  program  designated as eligible.
However,  an  institution  is not  obligated to obtain  Department  of Education
approval of an  additional  program that leads to an  associate,  baccalaureate,
professional  or  graduate  degree  or  which  prepares   students  for  gainful
employment  in the same or related  recognized  occupations  as any  educational
programs  that have  previously  been  designated  as eligible  programs at that
institution, and the program meets certain minimum length requirements.

     An  institution  must notify the Department of Education of any location at
which it provides 50% or more of an academic program and may be required to file
an application  seeking  eligibility  for such a location.  Under  Department of
Education  regulations  effective  July 1, 2001, an  institution  must apply for
approval for any new additional  location at which the institution offers 50% or
more  of  an  educational  program  if:  1)  the  institution  is  provisionally
certified;  2) the  institution  receives  Title  IV  Program  funds  under  the
reimbursement or cash monitoring payment method; 3) the institution acquires the
assets of another Title IV participating  institution that provided  educational
programs  at that  location;  4) the  institution  would be  subject  to loss of
eligibility  based  on  its  merger  or  entrance  into  a  similar  transaction
(including a change of name or address)  with an  institution  that  operated at
substantially  the same  address as the new  location  and has lost its Title IV
eligibility due to high cohort rates (as described  above);  or 5) the Secretary
of Education previously notified the institution that it must apply for approval
of an additional  location.  Under this standard,  only  Sanford-Brown  would be
required  under  regulation  to seek approval for a new  additional  location at
which the Sanford-Brown provides 50% or more of an educational program.


                                       18


     An  additional  location  must  satisfy  all  applicable  requirements  for
institutional eligibility, with the exception of the requirement that it operate
for two years prior to obtaining Title IV funds.

Seasonality

     We  experience  seasonality  in our  quarterly  results of  operations as a
result of changes in the level of student  enrollments.  New  enrollments in our
schools tend to be higher in the third and fourth fiscal quarters  because these
quarters  cover periods  traditionally  associated  with the beginning of school
semesters.  We expect that this seasonal trend will continue.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."


Employees

     At March 31, 2002, we had 752 full-time and 465 part-time employees of whom
565 were faculty and 559 were  administrative  personnel at the various schools.
The remaining employees were employed by us at our administrative offices.


Forward-Looking Statements; Business Risks

     Sections  of  this  Report  contain  statements  that  are  forward-looking
statements  within the meaning of Section 27A of the Securities Act of 1933 (the
"Securities  Act") and Section 21E of the  Securities  Exchange Act of 1934 (the
"Exchange Act"), and we intend that such  forward-looking  statements be subject
to the safe harbors created  thereby.  Statements in this Report  containing the
words  "estimate,"  "project,"   "anticipate,"  "expect,"  "intend,"  "believe,"
"will,"  "could,"  "should,"  "may," and  similar  expressions  may be deemed to
create  forward-looking  statements.  These  statements are based on our current
expectations and beliefs  concerning future events that are subject to risks and
uncertainties.  Actual results may differ  materially from the results suggested
herein and from the results historically experienced.

     Forward-looking  statements contained in this Report may relate to: (i) our
future  operating  plans and  strategies;  (ii) the growth of the  postsecondary
education  market due to (a) the increasing  number of high school graduates and
adult learners and (b) because of the focus placed on  postsecondary  education,
the continuing shift from non-skilled to skilled workers; (iii) the expansion of
our business  through the  addition of new  curricula  or new  locations,  or by
acquisitions;  (iv) our  anticipated  need for and our  ability to fund  capital
expenditures  associated with the relocation and upgrade of facilities in fiscal
2003;  (v) the  Department  of  Education's  enforcement  or  interpretation  of
existing  regulations  affecting our  operations;  (vi) the  seasonality  of our
results  of  operations;  and  (vii) the  sufficiency  of our  working  capital,
financings,  including our ability to increase our  borrowing if necessary,  and
cash flow  from  operating  activities  for our  future  operating  and  capital
requirements.

     We wish to caution you that in addition to the important  factors described
elsewhere in this Form 10-K,  the  following  important  factors,  among others,
sometimes have affected,  and in the future could affect, our actual results and
could cause our actual  consolidated  results during fiscal 2003, and beyond, to
differ materially from those expressed in any forward-looking statements made by
us, or on our behalf: (i) our plans,  strategies,  objectives,  expectations and
intentions, are subject to change at any time at our discretion; (ii) the effect
of,  and our and our  accrediting  bodies'  ability  to comply  with,  state and
federal government regulations regarding education and accreditation  standards,
or the interpretation or application thereof,  including the level of government
funding for, and our  eligibility  to  participate  in,  student  financial  aid
programs; (iii) our ability to assess and meet the educational needs and demands
of our  students  and the  employers  with whom they seek  employment;  (iv) the
effect of competitive  pressures from other  educational  institutions;  (v) our
ability to execute our growth strategy and manage planned internal growth;  (vi)
our ability to locate,  obtain and finance  favorable  school  sites,  negotiate
acceptable  lease  terms,  and hire and train  employees;  (vii)  the  effect of
economic  conditions in the postsecondary  education industry and in the economy
generally  including  changes and  fluctuations  in interest  rates;  (viii) our
ability   to  adapt  to   technological   and  other   developments,   including
Internet-based  curricula;  (ix)  the  role of the  Department  of  Education's,
Congress' and the public's  perception of for-profit  education as it relates to
changes in the Higher Education Act and regulations promulgated thereunder;  and
(x) the effects of changes in taxation and other government regulations.


                                       19


Item 2.    Properties.

     We lease all of our administrative  and campus  facilities.  We, along with
our Associate Degree Division,  maintain headquarters in Miami,  Florida,  where
combined  we  lease   approximately   13,750   square  feet  of  office   space.
Sanford-Brown also has limited  administrative  facilities at its Fenton campus.
Colorado  Tech  maintains its  administrative  offices at its campus in Colorado
Springs, Colorado.

Our schools are operated from the following leased premises:

                                                               Size of facility
  Location of School                      School              (in square feet)
  ------------------                      ------              ------------------

  Colorado Springs, Colorado           Colorado Tech                80,000
  Sioux Falls, South Dakota            Colorado Tech                21,064
  Denver, Colorado                     Colorado Tech                18,298
  North Kansas City, Missouri          Sanford-Brown                38,500
  Fenton, Missouri                     Sanford-Brown                25,200
  Hazelwood, Missouri                  Sanford-Brown                24,500
  St. Charles, Missouri                Sanford-Brown                14,650
  Granite City, Illinois               Sanford-Brown                12,253
  New York, New York                        UDS                     14,500
  Carle Place, New York                     UDS                     15,478
  Iselin, New Jersey                        UDS                     15,490
  Atlanta, Georgia                          UDS                     11,469
  Bellaire, Texas                           UDS                     15,395
  Tampa, Florida                            UDS                     14,412
  Dallas, Texas                             UDS                     15,235
  Trevose, Pennsylvania                     UDS                     10,204
  Elmsford, New York                        UDS                     10,034
  Jacksonville, Florida                     UDS                     15,800
  Springfield, Massachusetts                UDS                     17,617
  Pittsburgh, Pennsylvania                  UDS                      6,238
  Fort Lauderdale, Florida                  UDS                     14,808
  Independence, Ohio                        UDS                     11,282
  Landover, Maryland                        UDS                      7,703

     We believe  that all of our present  campus  facilities  are  suitable  and
adequate  for their  current  uses.  We monitor  the  suitability  of our campus
facilities to anticipate where demand for our products will create  overcrowding
or exceed  capacity of existing  facilities  and seek to expand or relocate such
campuses.  In  connection  with the  expected  "teach  out" of our UDS campus in
Pittsburgh,  Pennsylvania,  we expect that the leased premise located there will
be closed upon the conclusion of that program.


                                       20



Item 3.   Legal Proceedings.

     We are a party to routine litigation incidental to our business,  including
but  not  limited  to,  claims  involving  students  or  graduates  and  routine
employment  matters.  While there can be no assurance as to the ultimate outcome
of any such  litigation,  we do not  believe  that any pending  proceeding  will
result in a settlement or an adverse  judgment that will have a material adverse
effect on our financial condition or results of operations. See "Forward-Looking
Statements; Business Risks" appearing in Item 1 of this Report.


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

     No matters were  submitted to a vote of security  holders during the fourth
quarter of the fiscal year ended March 31, 2002.


Executive Officers of the Registrant

     Set forth below is a list of the names,  ages,  positions held and business
experience  during the past five years of the persons  serving as our  executive
officers as of March 31, 2002.  Officers serve at the discretion of our Board of
Directors.  There  is no  family  relationship  between  any  of  the  executive
officers,  and there is no  arrangement or  understanding  between any executive
officer  and any other  person  pursuant  to which  the  executive  officer  was
selected.

     Richard  C.  Pfenniger,  Jr.  Mr.  Pfenniger,  age 46,  has been our  Chief
Executive  Officer and Vice Chairman  since 1997 and a director  since 1992. Mr.
Pfenniger was Chief Operating  Officer of IVAX Corporation from 1994 to 1997. He
served as Senior Vice President--Legal  Affairs and General Counsel of IVAX from
1989 to 1994,  and as Secretary  from 1990 to 1994.  Prior to joining IVAX,  Mr.
Pfenniger was engaged in private law practice.


     Fernando  L.  Fernandez.  Mr.  Fernandez,  age 41,  has  served as our Vice
President--Finance, Chief Financial Officer, Secretary and Treasurer since 1996.
Prior to joining us, Mr.  Fernandez,  a certified public  accountant,  served as
Chief Financial Officer of Frost-Nevada  Limited  Partnership from 1991 to 1996.
Previously, Mr. Fernandez served as Audit Manager for PricewaterhouseCoopers LLP
(formerly Coopers & Lybrand) in Miami.



                                       21



                                     PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters

     Our common stock is traded on the American  Stock Exchange under the symbol
"WIX". The following table sets forth the high and low sale prices of our common
stock as reported by the composite  tape of the American Stock Exchange for each
of the quarters indicated.

                                         2002
                           -------------------------------
                               High               Low
                           ---------------  --------------
Quarter Ended 6/30/01       $  3.05          $   2.00
Quarter Ended 9/30/01          3.70              2.75
Quarter Ended 12/31/01         4.80              3.00
Quarter Ended 3/31/02          5.92              4.40

                                         2001
                           -------------------------------
                               High               Low
                           --------------  ---------------
Quarter Ended 6/30/00       $  2.38          $   1.13
Quarter Ended 9/30/00          2.50              1.19
Quarter Ended 12/31/00         3.13              1.00
Quarter Ended 3/31/01          3.26              1.94

     As of the close of business on June 3, 2002, there were  approximately  282
record  holders of our common  stock.  We have not paid  dividends on our common
stock and do not contemplate paying dividends in the foreseeable future.




                                       22



Securities Authorized for Issuance under Equity Compensation Plans

     We maintain  our Amended and  Restated  1996 Stock  Option  Plan,  our 1992
Incentive  Stock Option Plan,  our 1986 Directors and  Consultants  Stock Option
Plan, and our Employee Stock Purchase Plan.  Additionally,  we have entered into
an  individual  arrangement  outside  of these  equity  plans  with  Richard  C.
Pfenniger,  Jr.,  our Chief  Executive  Officer  providing  for the award to Mr.
Pfenniger of options to acquire shares of our common stock.  The following table
provides  summary  information  of the equity  awards  under these  compensation
plans.


                      Equity Compensation Plan Information

                                                             Number of
                                                             securities
                      Number of                              remaining available
                      securities                             for future issuance
                      to be issued      Weighted-average     under equity
                      upon exercise     exercise price of    compensation plans
                      of outstanding    outstanding         (excluding
                      options,          options, warrants    securities
                      warrants          and rights           reflected in column
Plan Category         and rights                                  (a))
--------------     ------------------  ------------------   --------------------
                         (a)               (b)                    (c)

Equity
compensation
plans
approved by
security
holders                3,923,937            $ 3.79                  4,715,250

Equity
compensation
plans not
approved by
security
holders                  185,000           $ 5.25
                                                                         -
                   ------------------                       --------------------

Total                  4,108,937           $ 3.86                   4,715,250
                   ==================  ==================   ====================


     On March 3, 1997, we retained Mr. Pfenniger as our Chief Executive Officer.
In connection  with the  commencement  of his employment  with us we granted him
options to acquire 300,000 shares of our common stock. We granted Mr.  Pfenniger
options  covering  115,000 of these  shares  under our 1996 Plan and granted the
remaining  options to him  outside of our equity  compensation  plans in a grant
that was not approved by our shareholders. The terms of the grants are identical
and the options have a per share  exercise  price equal to $5.25,  the per share
fair  market  value of the common  stock on the date of grant.  Mr.  Pfenniger's
options  vest  ratably  over 4 years  after the date of grant and expire 7 years
after the date of grant.  Vested options held by Mr.  Pfenniger may be exercised
after  termination of his employment (other than as a result of a termination of
his employment for "cause" as defined in the applicable  grant) until either the
original  expiration date for the option or the date which is one year after the
effective date of the  termination of his employment,  whichever is earlier.  In
the event of a "change of  control"  of Whitman  (as  defined in the  applicable
grant), all of Mr. Pfenniger's outstanding unvested options will vest and become
fully exercisable.



                                       23



Item 6.   Selected Financial Data.


                                                Year Ended March 31,
                             ---------------------------------------------------
                                2002       2001      2000       1999      1998
                             ----------  --------  --------   --------  --------
                                   (In thousands, except per share data) (1)
Operating Data
Net revenues................  $91,927   $79,629   $77,611     $73,977    $60,306
Income (loss) from
  operations................    5,060       576       (26)      4,195        784
Net income (loss)...........    2,602    (1,422)     (502)      3,042        143
Diluted net income (loss)
  per share(2) .............     0.18     (0.11)    (0.04)       0.22       0.01
Dividends...................     None      None      None        None      None

Balance Sheet Data
Total assets................  $67,109    $62,867  $ 62,526   $ 62,580    $53,821
Long-term debt and
   capitalized lease
   obligations, less current
   portion..................    7,473     11,128    11,119     12,022     14,350
Stockholders' equity........   23,727     20,544    21,285     21,625     17,833
--------------------

     (1) Figures  reflect the  acquisition  of Huron  University on December 30,
     1996,  which was accounted for as a purchase,  the sale of Huron University
     in  August  1999 and the  disposition  of our  minority  interest  in Huron
     University in April 2001.

     (2) We calculate  historical  diluted net income (loss) per share using the
     weighted  average  number  of  shares of  common  stock  and  common  stock
     equivalents  outstanding  during the period.  We  calculate  our  projected
     diluted net income (loss) per share for periods not yet completed using the
     treasury  stock method.  Under the treasury stock method we assume that all
     outstanding "in the money" stock options and other common stock equivalents
     are  exercised  at the  beginning  of the  financial  period.  As a result,
     fluctuations  in the  market  price of our  common  stock  could  result in
     variances  between our projected  and our actual  diluted net income (loss)
     per share.

     See  Consolidated  Financial  Statements,   Item  8  of  this  Report,  for
supplementary financial information of Whitman.


                                       24



Item 7.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.


     The following  discussion and analysis  should be read in conjunction  with
the consolidated financial statements of Whitman and the notes thereto appearing
elsewhere in this report and in conjunction  with  "Forward-Looking  Statements;
Business Risks"  appearing at the end of Item 1 in that certain  statements made
in this Item are qualified by the risk factors set forth in that section.

General

     Through three wholly-owned subsidiaries, we currently operate 23 schools in
13 states offering a range of graduate, undergraduate and non-degree certificate
or  diploma  programs  primarily  in  the  fields  of  healthcare,   information
technology  and business to more than 8,000  students.  We are organized  into a
University  Degree  Division and an Associate  Degree  Division.  The University
Degree Division offers primarily doctorate,  master and bachelor degrees through
Colorado  Tech.  The Associate  Degree  Division  offers  associate  degrees and
diplomas or certificates through Sanford-Brown and UDS.

     Revenues  consist  primarily  of  tuition  and fees paid by  students.  The
majority of our students  rely on funds  received  from Title IV Programs to pay
for a  substantial  portion of their  tuition.  Accordingly,  a majority  of our
revenues are indirectly derived from Title IV Programs.

     Instructional  and educational  support expenses consist primarily of costs
related  to  the  educational   activity  of  our  schools.   Instructional  and
educational support expenses include salaries and benefits of faculty,  academic
administrators  and student  support  personnel.  Instructional  and educational
support  expenses  also  include  occupancy  costs,  costs  of books  sold,  and
depreciation and amortization of equipment costs and leasehold improvements.

     Selling and promotional  expenses consist  primarily of advertising  costs,
production costs of marketing materials,  and salaries and benefits of personnel
engaged in student recruitment, admissions, and promotional functions.

     General and  administrative  expenses consist  primarily of  administrative
salaries and benefits, occupancy costs, depreciation,  bad debt, amortization of
intangibles,  and other related costs for departments that do not provide direct
services to students.  Effective  April 1, 2001,  in  compliance  with SFAS 142,
goodwill is no longer subject to amortization but rather reviewed for impairment
on a periodic basis.



                                       25



Results of Operations

     The  following  table sets  forth the  percentage  relationship  of certain
statement of operations data to net revenues for the periods indicated:

                                                 Year Ended March 31,
                                     -------------------------------------------
                                         2002             2001          2000
                                     -------------   ------------   ------------
Net revenues                            100.0%           100.0%        100.0%
                                     -------------   ------------   ------------
Costs and expenses:
    Instructional and educational
        support...................       63.6             66.1          66.4
    Selling and promotional.......       15.7             18.0          15.9
    General and administrative....       15.2             15.2          15.7
    Legal settlement..............          -              -             2.0
                                     -------------   ------------   ------------
Total costs and expenses..........       94.5             99.3         100.0
                                     -------------   ------------   ------------
Income from operations............        5.5              0.7             -
Other (income) and expenses:
    Interest expense..............        1.0              1.4           1.5
    Interest income...............       (0.4)            (0.4)         (0.4)
    Loss on Huron investment......          -              1.5             -
                                     -------------   ------------   ------------
Income (loss) before income tax
    provision (benefit)
    and cumulative effect of
    change in accounting
    principle.....................        4.9             (1.8)         (1.1)
Income tax provision (benefit)....        2.1             (0.7)         (0.4)
                                     -------------   ------------   ------------
Income (loss) before cumulative
    effect of change in accounting
    principle.....................        2.8             (1.1)         (0.7)
Cumulative effect of change in
    accounting principle, net of
    tax...........................          -             (0.7)            -
                                     -------------   ------------   ------------
Net income (loss).................        2.8%            (1.8)%        (0.7)%
                                     =============   ============   ============


       Year ended March 31, 2002 compared to the year ended March 31, 2001

     Net revenues  increased by $12.3  million or 15.4% to $91.9 million for the
year ended March 31, 2002 from $79.6  million for the year ended March 31, 2001.
This increase was primarily due to a 6.6% increase in average student enrollment
and an increase in tuition rates.

     The  Associate  Degree  Division  experienced  a 9.8%  increase  in average
student  enrollment  and  the  University  Degree  Division  experienced  a 0.1%
increase in average student  enrollment.  The increase in student  enrollment in
the Associate  Degree Division was primarily due to increased  enrollment in the
medical assisting program and the health information  specialist program offered
by UDS and the  information  technology  and allied health  programs  offered at
Sanford-Brown.  The  increase  in student  enrollment  in the  Associate  Degree
Division  was  due  to our  improved  marketing  and  admissions  efforts  which
permitted  us to increase  the rate at which we  converted  leads to new student
starts.

     Instructional and educational  support expenses  increased by $5.8 million,
or 11.0%,  to $58.5 million for the year ended March 31, 2002 from $52.7 million
for  the  year  ended  March  31,  2001.   As  a  percentage  of  net  revenues,
instructional and educational  support expenses  decreased to 63.6% for the year
ended March 31, 2002 as compared to 66.1% for the year ended March 31, 2001. The
increase in instructional and educational  support expenses was primarily due to
an increase in payroll  expenses  and related  benefits  for  faculty,  academic
administrators  and  student  support  personnel  to  support  the  increase  in
enrollment.  The decrease in instructional and educational support expenses as a
percentage  of net  revenues  was due to our  ability  to  better  leverage  our
instructional  and educational  support expenses to support an increased revenue
base.


                                       26


     Selling and  promotional  expenses  increased by $0.1 million,  or 0.8%, to
$14.4  million for the year ended March 31, 2002 from $14.3 million for the year
ended March 31, 2001. As a percentage of net revenues,  selling and  promotional
expenses  decreased  to 15.7% for the year ended  March 31,  2002 as compared to
18.0% for the year ended March 31, 2001. The decrease in selling and promotional
expenses as a percentage of net revenues was due to our ability to maintain such
expenses relatively unchanged while supporting a growth in revenues.

     General and administrative expenses increased by $1.9 million, or 15.8%, to
$14.0  million for the year ended March 31, 2002 from $12.1 million for the year
ended  March  31,  2001.  As  a  percentage   of  net   revenues,   general  and
administrative  expenses remained  consistent at 15.2% for the years ended March
31,  2002 and 2001.  The  increase in general and  administrative  expenses  was
primarily  due to an increase in  administrative  payroll  expenses  and related
benefits and an increase in bad debt  expense.  As a percentage of net revenues,
bad debt  expense  increased to 5.1% for the year ended March 31, 2002 from 5.0%
for the year  ended  March  31,  2001.  The  increase  in bad debt  expense  was
primarily due to the negative  impact of the October 2000  required  adoption of
the Department of Education's  new  methodology  for  calculating  the amount of
previously  disbursed  federal student  financial aid that we must return to the
federal  government  with respect to students who have since  withdrawn from our
schools.  This new regulation  increases the student's  obligation to the school
from which  they have  withdrawn  and  decreases  the amount of student  federal
financial aid received by the school on behalf of the student who withdrew.

     We reported income from operations of $5.1 million and $0.6 million for the
years  ended  March  31,  2002  and  2001,   respectively.   This   increase  in
profitability was primarily due to an increase in income from operations of $6.9
million  in the  Associate  Degree  Division  which  was  partially  offset by a
decrease in income from  operations in the  University  Degree  Division of $2.0
million.

     We  reported  net income of $2.6  million for the year ended March 31, 2002
and a net loss of $1.4 million for the year ended March 31,  2001.  The increase
in net income was primarily due to an increase in profitability in the Associate
Degree Division,  losses sustained in the prior year relating to the sale of our
minority ownership of Huron University,  which resulted in a loss after taxes of
$0.7 million,  and the  implementation of SEC Staff Accounting  Bulletin No. 101
effective April 1, 2000, which resulted in a one-time charge after taxes of $0.6
million.

         Year Ended March 31, 2001 Compared to Year Ended March 31, 2000

     Net revenues  increased by $2.0 million,  or 2.6%, to $79.6 million for the
year ended March 31, 2001 from $77.6  million for the year ended March 31, 2000.
Excluding  Huron  University,  which  was  sold in  August  1999,  net  revenues
increased by $3.5  million,  or 4.5%,  to $79.6 million for the year ended March
31, 2001 from $76.2 million for the year ended March 31, 2000. This increase was
primarily due to a 2.3% increase in average  student  enrollment and an increase
in tuition rates.



                                       27


     Excluding Huron University,  the University  Degree Division  experienced a
7.2% increase in average student  enrollment.  Average student enrollment in the
Associate Degree Division remained relatively unchanged. The increase in student
enrollment  in the  University  Degree  Division was  primarily due to increased
enrollment  at  Colorado  Tech's  Sioux  Falls  campus  and in  Colorado  Tech's
information technology programs.

     Instructional and educational  support expenses  increased by $1.1 million,
or 2.1%,  to $52.7  million for the year ended March 31, 2001 from $51.6 million
for  the  year  ended  March  31,  2000.   As  a  percentage  of  net  revenues,
instructional and educational  support expenses  decreased to 66.1% for the year
ended March 31,  2001 as  compared  to 66.4% for the year ended March 31,  2000.
Excluding  Huron  University,  instructional  and educational  support  expenses
increased by $3.3  million,  or 6.6%,  to $52.7 million for the year ended March
31, 2001 from $49.4 million for the year ended March 31, 2000.  Excluding  Huron
University,  as a percentage  of net  revenues,  instructional  and  educational
support  expenses  increased  to 66.1%  for the year  ended  March  31,  2001 as
compared  to  64.8%  for the  year  ended  March  31,  2000.  This  increase  in
instructional and educational  support expenses was primarily due to an increase
of $2.2  million  in the  University  Degree  Division  and $1.0  million in the
Associate Degree Division. The increase in instructional and educational support
expenses in the  University  Degree  Division was  primarily due to increases in
payroll and related  benefits  for faculty  and  student  support  personnel  to
support the increase in enrollments  and an increase in expenses  related to the
start up of Colorado Tech's online program.  The increase in  instructional  and
educational  support expenses in the Associate Degree Division was primarily due
to  an  increase  in  payroll  and  related   benefits  for  faculty,   academic
administrators  and student  support  personnel at UDS to support an increase in
enrollment.

     Selling and promotional  expenses  increased by $2.0 million,  or 16.2%, to
$14.3  million for the year ended March 31, 2001 from $12.3 million for the year
ended March 31, 2000. As a percentage of net revenues,  selling and  promotional
expenses  increased  to 18.0% for the year ended  March 31,  2001 as compared to
15.9% for the year ended March 31, 2000. Excluding Huron University, selling and
promotional  expenses increased by $2.3 million,  or 18.9%, to $14.3 million for
the year ended  March 31,  2001 from $12.0  million for the year ended March 31,
2000. Excluding Huron University,  as a percentage of net revenues,  selling and
promotional  expenses  increased  to 18.0% for the year ended  March 31, 2001 as
compared to 15.8% for the year ended March 31,  2000.  This  increase in selling
and  promotional  expenses  was  primarily  due to an  increase  in  advertising
expenses in the Associate Degree Division  resulting from our marketing  efforts
directed at increasing enrollment.

     General and administrative  expenses decreased by $0.1 million, or 1.1%, to
$12.1  million for the year ended March 31, 2001 from $12.2 million for the year
ended  March  31,  2000.  As  a  percentage   of  net   revenues,   general  and
administrative  expenses decreased to 15.2% for the year ended March 31, 2001 as
compared to 15.7% for the year ended March 31, 2000. Excluding Huron University,
general and administrative expenses decreased by $0.1 million, or 0.9%, to $12.1
million for the year ended March 31, 2001 from $12.2  million for the year ended
March 31, 2000.  Excluding  Huron  University,  as a percentage of net revenues,
general and administrative  expenses decreased to 15.2% for the year ended March
31, 2001 as compared to 16.0% for the year ended March 31, 2000. The decrease in
general  and  administrative  expenses  was  primarily  due  to a  reduction  in
administrative  payroll  expenses and consulting  fees in the University  Degree
Division.  The decrease in these expenses was partially offset by an increase in
bad debt expense. As a percentage of net revenues, bad debt expense increased to
5.0% for the year ended  March 31,  2001 from 4.4% for the year ended  March 31,
2000.  Bad debt expense was  negatively  impacted by the October  2000  required
adoption of the Department of Education's  new  methodology  for calculating the
amount of previously disbursed federal student financial aid that we must return
to the federal government with respect to students who have since withdrawn from
our  schools.  This new  regulation  results  in an  increase  in the  student's
obligation to the school from which they have withdrawn that will not be paid by
federal student financial aid funds.

                                       28


     We reported income from operations of $0.6 million for the year ended March
31,  2001 as compared  to a loss from  operations  of $26,333 for the year ended
March 31, 2000. Excluding Huron University,  income from operations decreased by
$0.4 million to $0.6 million for the year ended March 31, 2001 from $1.0 million
for the year ended March 31, 2000. This decrease in profitability  was primarily
due to a decrease in income from  operations  of $0.5 million in the  University
Degree  Division  due to an  increase  in  expenses  related  to the start up of
Colorado Tech's online program.

     On April 26, 2001, Huron University was sold to a not-for-profit college by
the investor  group that acquired it from us.  Colorado Tech recorded a one-time
non-recurring non-cash charge of approximately $1.2 million or $0.05 per diluted
share in the fiscal  quarter  ended March 31,  2001  relating to the sale of its
minority  ownership  of  Huron  University.  See  "Management's  Discussion  and
Analysis of Financial  Conditions  and Results of  Operations -  Divestiture  of
Huron University."

     We reported net losses of $1.4 million and $0.5 million for the years ended
March 31, 2001 and 2000,  respectively.  The increase in net loss was  primarily
due to the  loss of  $0.7  million,  after  taxes  realized  in  fiscal  2001 in
connection with the sale of our minority  ownership of Huron  University and the
implementation of SEC Staff Accounting Bulletin No. 101 effective April 1, 2000,
which  resulted in a one-time  charge after taxes of $0.6 million.  These losses
were  partially  offset by operating  losses of $1.0 million  sustained at Huron
University  in fiscal  2000 prior to the  divestiture  of this  campus in August
1999.

Divestiture of Huron University

     In 1999, we sold the Huron,  South Dakota,  campus of Huron University to a
group  of  investors,  including  members  of the  campus  management  team.  In
connection  with the  transaction,  we contributed  the operating  assets of the
school,  certain of its  liabilities  and $550,000 in cash to the  purchaser and
agreed to  guarantee a portion of the assumed  liabilities.  We also  retained a
minority  interest in the  school.  We extended a loan of $500,000 to the campus
President to assist him in funding the transaction.

     The terms of the  transaction  were  established  through  an arm's  length
negotiation,  and we  recorded  no  gain  or  loss.  We  recorded  our  minority
investment in the school at a cost of  approximately  $1.2  million,  which then
approximated fair value. We recorded the investment under the cost method due to
our inability to exercise significant influence over the operating and financial
policies of the purchaser.

     On April 26, 2001, the investor  group sold the school to a  not-for-profit
college.  This transaction  released us from any further obligations  associated
with the school,  including our guarantee.  We did not receive any proceeds from
this  transaction,  and  recorded a one-time  non-recurring  non-cash  charge of
approximately  $1.2 million in the fiscal  quarter ended March 31, 2001 relating
to our minority ownership of the school.

     Our loan of $500,000 to the former campus  President  remained  outstanding
after the sale. The loan is due in August 2005 with monthly interest payments at
the prime rate which  commenced in October  1999.  The loan is secured by 80,000
shares  of  our  common  stock  owned  by  the  former  campus  President.   The
not-for-profit  college that  purchased  the school has also agreed to guarantee
this loan. In October 2001,  the loan went into default by virtue of the failure
of the required  monthly  interest  payments to be made and we  accelerated  all
amounts due under the loan. In May 2002, we received a default  judgment against
the  not-for-profit   college  that  guaranteed  the  loan  and  are  commencing
collection efforts to enforce the judgment.  We believe the collateral  securing
the loan is adequate and, therefore, have elected not to take action against the
principal obligor of the loan at this time.


                                       29


Seasonality

     We  experience  seasonality  in our  quarterly  results of  operations as a
result of changes  in the level of student  enrollment.  New  enrollment  in our
schools tends to be higher in the third and fourth fiscal quarters because these
quarters  cover periods  traditionally  associated  with the beginning of school
semesters.  Costs are  generally  not  significantly  affected  by the  seasonal
factors on a quarterly basis. Accordingly,  quarterly variations in net revenues
will result in fluctuations in income from operations on a quarterly basis.

Liquidity and Capital Resources

     Cash and cash  equivalents  at March 31,  2002,  2001 and 2000  were  $14.0
million,  $5.9  million and $6.1  million,  respectively.  Our  working  capital
totaled $9.9 million at March 31, 2002,  $9.3 million at March 31, 2001 and $8.8
million at March 31, 2000.

     Net cash of $13.3  million was provided by operating  activities  in fiscal
2002, an increase of $10.8 million from fiscal 2001 and $6.7 million from fiscal
2000. The increase in cash provided by operating  activities of $10.8 million in
fiscal 2002 from fiscal 2001 was  primarily due to an increase in net profits of
$4.0 million,  a net increase in accounts  payable and accrued  expenses of $4.3
million and a decrease in deferred income taxes of $2.4 million. The increase in
cash provided by operating activities of $6.7 million in fiscal 2002 from fiscal
2000 was primarily due to an increase in net profits of $3.1 million, a decrease
in accounts  receivable of $1.1 million and a decrease in deferred  income taxes
of $1.7 million.

     Net cash of $1.4 million was used for investing  activities in fiscal 2002,
a decrease of $0.6  million  from fiscal 2001 and $1.0 million from fiscal 2000.
The  decrease in fiscal 2002 from 2001 was  primarily  due to a decrease in cash
used for capital expenditures.  The decrease in fiscal 2002 from fiscal 2000 was
primarily due to our  investment  of $1.2 million in Huron  University in fiscal
2000.

     We estimate that the capital  expenditures  expected to be incurred  during
fiscal  2003  will  approximate   $3.4  million.   These   anticipated   capital
expenditures  primarily  relate to the costs associated with the acquisition and
upgrade of equipment  for the schools and the  relocation  and upgrade of campus
facilities.  Funds required to finance such capital expenditures are expected to
be obtained from funds generated from operations.

     Net cash of $3.8 million was used in financing  activities  in fiscal 2002,
an increase in cash used of $3.1  million from fiscal 2001 and $1.3 million from
fiscal 2000.  The increase in cash used in financing  activities  in fiscal 2002
from  fiscal  2001 and fiscal  2000 was due to an  increase  in net  payments on
long-term debt and capital lease obligations.

     In March 2001, our $8.5 million  credit  facility was  restructured  into a
$2.0 million line of credit and a $6.5 million capital expenditure term note. In
November  2001,  we extended  the  expiration  date on the $2.0  million line of
credit to October 31, 2002. We intend to further extend the  expiration  date on
our line of credit prior to October 31, 2002 or, in the  alternative,  to seek a
replacement  credit facility.  At March 31, 2002, we had no outstanding  balance
under this  facility and letters of credit  outstanding  of $0.5  million  which
reduced  the amount  available  for  borrowing.  The $6.5  million  term note is
payable in seven monthly  installments  of interest only commencing on April 21,
2001 and thereafter in 52 monthly  installments of principal and interest with a
balloon payment due in April 2006. The amounts borrowed under this facility were
used for capital expenditures in prior years.


                                       30


     Our  primary  source  of  operating  liquidity  is the cash  received  from
payments of tuition and fees.  Most students  attending our schools receive some
form of financial aid under Title IV Programs,  and a majority of our revenue is
derived from Title IV Programs.  UDS,  Sanford-Brown  and Colorado  Tech receive
approximately 75%, 77% and 29% of their funding, respectively, from the Title IV
Programs.  Disbursements  under each  program  are subject to  disallowance  and
repayment by the schools.

     We believe that given our working  capital,  our cash flow from  operations
and our line of credit, we will have adequate  resources to meet our anticipated
operating requirements for the foreseeable future.

     Numerous risks and uncertainties  could affect our short-term and long-term
liquidity.  See "Forward-Looking  Statements;  Business Risks" for discussion of
material factors that could affect our liquidity.

Contractual Obligations and Other Commercial Commitments

     The following summarizes our contractual obligations at March 31, 2002, and
the effect such  obligations are expected to have on our liquidity and cash flow
in future periods (in thousands):


                                          Payments Due by Period
                           -----------------------------------------------------
                                     Within                              After
                           Total     1 Year    2-3 Years    4-5 Years   5 Years
                           -------  --------  ----------   ----------  ---------
Note Payable               $ 5,958   $1,300     $ 2,600     $ 2,058     $   -
Capital Lease Obligations    4,597    1,782       2,227         588         -
Operating Leases            30,995    5,802       9,963       7,607      7,623
                           -------  --------  ----------   ----------  ---------
                           $41,550   $8,884     $14,790     $10,253    $ 7,623
                           =======  ========  ==========   ==========  =========


     We have a contractual  commitment  related to a $2.0 million line of credit
which  expires on October 31, 2002. We intend to further  extend the  expiration
date on our line of credit prior to October 31, 2002 or, in the alternative,  to
seek a  replacement  line of credit.  At March 31, 2002,  we had no  outstanding
balance under this facility and letters of credit  outstanding  of $0.5 million,
which reduced the amount available for borrowing.


Transactions with Former Management

     We purchase certain textbooks and materials for resale to our students from
an entity  that is 40%  owned by Randy S.  Proto,  our  former  Chief  Operating
Officer and President.  In the fiscal years ended March 31, 2002, 2001 and 2000,
we purchased  approximately  $147,900,  $97,500 and $148,800,  respectively,  in
textbooks and materials from that entity.


                                       31


Critical Accounting Policies

     The  discussion  and  analysis of our  financial  condition  and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses  during the reporting  period.  On an on-going  basis,  we evaluate our
estimates,   including  those  related  to  allowance  for  doubtful   accounts,
intangible assets, accrued liabilities,  income and other tax accruals,  revenue
recognition and contingencies and litigation.  Management bases its estimates on
historical  experience and on various other  assumptions that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not readily  apparent  from other  sources.  Critical  accounting  policies  are
defined as those that are reflective of significant  judgments by management and
uncertainties, and that could potentially result in materially different results
under  different  assumptions  and  conditions.  Although  historically,  actual
results have not significantly deviated from those determined using management's
estimates,  as discussed below, our financial  position or results of operations
could be materially different if we were to report under different conditions or
when using different assumptions in the application of such policies. We believe
the following  accounting policies are the most critical to us, in that they are
the  primary  areas  where  financial  information  is  subject  to  the  use of
management's estimates, assumptions and the application of management's judgment
in the  preparation  of our  consolidated  financial  statements.  The  critical
accounting policies discussed herein are not intended to be a comprehensive list
of all of our accounting policies.  In many cases, the accounting treatment of a
particular   transaction  is  specifically  dictated  by  accounting  principles
generally  accepted  in  the  United  States  of  America,   with  no  need  for
management's  judgment  in their  application.  There  are  also  areas in which
management's judgment in selecting any available alternative would not produce a
materially  different result.  Other accounting policies also have a significant
effect on our financial statements,  and some of these policies also require the
use of  estimates  and  assumptions.  Our  significant  accounting  policies are
discussed in Note 1 to the Consolidated  Financial Statements included in Item 8
of this Form 10-K.

Revenues, Accounts Receivable and Deferred Tuition Revenue

     Revenues   consist   primarily  of  tuition  and  fees  paid  by  students.
Approximately  65% of our net  revenues  collected  during the fiscal year ended
March 31, 2002 were  received  from  students who  received  funds from Title IV
Programs to pay for their tuition.

     We charge our students for the full contract amount at the beginning of the
course, the academic year, or the academic term, as applicable, resulting in the
recording of an account receivable and a corresponding  deferred tuition revenue
liability. The deferred tuition revenue liability is reduced and recognized into
income over the term of the relevant period being attended by the student.  If a
student withdraws from a course or program,  the unearned portion of the program
that the student has paid for is refunded generally on a pro rata basis.

     We  continuously  monitor  collections  and payments  from our students and
maintain an allowance for doubtful  accounts for estimated losses resulting from
the  inability  of our students to make  required  payments.  We  determine  the
adequacy of this allowance by regularly  reviewing the accounts receivable aging
and applying  various  expected  loss  percentages  to certain  student  account
receivable  categories  based on historical bad debt  experience.  We charge-off
accounts receivable balances deemed to be uncollectible  usually after they have
been sent to a  collection  agency and returned  uncollected.  While such losses
have historically  been within our expectations,  there can be no assurance that
we will  continue  to  experience  the same level of losses  that we have in the
past.  Furthermore,  because a significant  percentage of our revenue is derived
from  the  Title  IV  Programs,   any  legislative  or  regulatory  action  that
significantly  reduces Title IV Program funding or the ability of our schools or
students to participate  in the Title IV Programs could have a material  adverse
effect on the collectability of our accounts receivable and our future operating
results,  including a reduction in future revenues and additional allowances for
doubtful accounts.


                                       32


Goodwill

     We have made acquisitions in the past that have resulted in the recognition
of goodwill.  Prior to April 1, 2001 we amortized the goodwill  associated  with
these acquisitions using the straight-line method, principally over a forty-year
period and evaluated the realizability of the goodwill periodically to determine
if  the  carrying  amount  was  recoverable   from  operating   earnings  on  an
undiscounted basis over their estimated useful lives.

     In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS 142"). Under the new rules, goodwill (and identifiable  intangible assets
deemed to have indefinite lives) will no longer be amortized but will be subject
to annual  impairment tests or more frequently if impairment  indicators  arise.
Other  intangible  assets will  continue to be  amortized  over their  estimated
useful lives.

     Effective  April 1,  2001,  we  elected  to early  adopt  SFAS 142.  During
September  2001, we completed our  transitional  impairment  test of goodwill in
accordance with SFAS 142. As a result of this test, it was determined that there
was no impairment of goodwill.

     In assessing the  recoverability of our goodwill,  we must make assumptions
regarding  estimated  future cash flows and other  factors to determine the fair
value of the respective  asset. If these estimates or their related  assumptions
change in the future, we may be required to record  impairment  charges for this
asset not previously recorded which would adversely impact our operating results
for the period in which we made the  determination.  There are many  assumptions
and  estimates  underlying  the  determination  of an impairment  loss.  Another
estimate using  different,  but still  reasonable,  assumptions  could produce a
significantly different result.  Therefore,  impairment losses could be recorded
in the future.

Income Taxes

     We account for income  taxes in  accordance  with  Statement  of  Financial
Accounting  Standards No. 109,  "Accounting for Income Taxes" ("SFAS 109") which
requires that deferred tax assets and  liabilities  be recognized  using enacted
tax rates for the effect of temporary differences between the book and tax bases
of recorded assets and liabilities. SFAS No. 109 also requires that deferred tax
assets be reduced by a  valuation  allowance  if it is more likely than not that
some portion or all of the deferred tax asset will not be realized.

     As part of the process of preparing our consolidated  financial  statements
we are  required to estimate our income  taxes in each of the  jurisdictions  in
which we  operate.  This  process  involves  estimating  our actual  current tax
exposure together with assessing temporary  differences resulting from differing
treatment  of  items  for tax and  accounting  purposes.  We also  recognize  as
deferred tax assets the future tax benefits  from net operating and capital loss
carryforwards.  We evaluate the  realizability  of these  deferred tax assets by
assessing  their  valuation  allowances  and by  adjusting  the  amount  of such
allowances,  if  necessary.  Among the factors used to assess the  likelihood of
realization are our  projections of future taxable income streams,  the expected
timing of the reversals of existing temporary differences, and the impact of tax
planning  strategies  that could be  implemented  to avoid the potential loss of
future tax  benefits.  However,  changes in tax  codes,  statutory  tax rates or
future  taxable  income  levels  could  materially  impact our  valuation of tax
accruals  and  assets and could  cause our  provision  for income  taxes to vary
significantly from period to period.


                                       33


     At March 31,  2002,  we had  deferred  tax assets in excess of deferred tax
liabilities of approximately  $2.4 million.  During the year, we determined that
it is more  likely than not that $2.3  million of those  assets will be realized
(although  realization  is not assured),  resulting in a valuation  allowance of
$100,000 at March 31, 2002.

New Accounting Pronouncements

     On December 3, 1999,  the  Securities  Exchange  Commission  released Staff
Accounting   Bulletin   (SAB)  No.  101,   "Revenue   Recognition  in  Financial
Statements,"  to  provide  guidance  on  the  recognition,   presentation,   and
disclosure of revenue in financial  statements.  SAB 101 outlines basic criteria
that must be met before we may recognize revenue,  including persuasive evidence
of the  existence of an  arrangement,  the  delivery of products or services,  a
fixed and determinable sales price, and reasonable assurance of collection.  SAB
101 became effective beginning the first fiscal quarter of the first fiscal year
beginning after December 15, 1999.  Prior to the release of SAB 101, our revenue
recognition  policy  was in  compliance  with  accounting  principles  generally
accepted  in  the  United  States  of  America.  Effective  April  1,  2000,  we
implemented  SAB 101 and  changed the method by which we  recognize  revenue for
laboratory and registration fees charged to a student.  In fiscal 2001, we began
recognizing  revenue  for  these  fees  ratably  over the  life of an  education
program.  Previously,  we recognized laboratory and registration fees as revenue
at the beginning of our academic term or year,  as  applicable.  We recorded the
cumulative effect of the change in accounting of approximately  $564,000, net of
taxes, in the first quarter of fiscal 2001.

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141, "Business  Combinations," and No. 142,
"Goodwill  and Other  Intangible  Assets"  ("SFAS 141 and 142"),  effective  for
fiscal years  beginning  after December 15, 2001. SFAS 141 requires all business
combinations  initiated  after  June 30,  2001,  to be  accounted  for using the
purchase  method  and  establishes  specific  criteria  for the  recognition  of
acquired  intangible assets apart from goodwill.  Under SFAS 142, goodwill is no
longer subject to amortization  over its useful life.  Rather,  goodwill will be
subject  to, at  least,  an annual  assessment  for  impairment  by  applying  a
fair-value-based  test.  Other  intangible  assets will continue to be amortized
over their useful lives. Whitman elected to adopt the provisions of SFAS 141 and
142 effective  April 1, 2001.  Application of the  nonamortization  provision of
SFAS 142  resulted in an increase in net income of $162,000,  net of taxes,  for
the year ended March 31, 2002.  During September 2001, the Company completed its
transitional  impairment  test of  goodwill  in  accordance  with SFAS 142. As a
result of this test, it was determined that there was no impairment of goodwill.

     In August 2001, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting  Standards No. 144,  "Accounting  for the Impairment or
Disposal  of  Long-Lived  Assets"  ("SFAS  144").  SFAS  144  requires  that one
accounting  model be used for  long-lived  assets to be  disposed of by sale and
broadens the  presentation of  discontinued  operations to include more disposal
transactions.  SFAS 144 supercedes  FASB Statement No. 121,  "Accounting for the
Impairment  of  Long-Lived  Assets  to Be  Disposed  Of"  ("SFAS  121")  and the
accounting  and  reporting  provisions  of APB  Opinion No. 30,  "Reporting  the
Results  of  Operations-Reporting  the  Effects  of  Disposal  of a Segment of a
Business,  and  Extraordinary,  Unusual,  and Infrequently  Occurring Events and
Transactions"  ("APB 30") for the disposal of a segment of a business.  However,
SFAS 144 retains the  fundamental  provisions  of SFAS 121 for  recognition  and
measurement of the  impairment of long-lived  assets to be held and used and the
measurement  of  long-lived  assets  to be  disposed  of by sale.  SFAS 144 also
retains  the  requirement  under  APB  30  to  report  discontinued   operations
separately from continuing  operations and extends that reporting to a component
of an entity that either has been disposed of or is classified as held for sale.
The  provisions of SFAS 144 are effective  for financial  statements  issued for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal  years.  We do not expect the adoption of SFAS 144 to have a  significant
impact on our financial position or results of operations.



                                       34


     In April 2002, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 145,  "Rescission of FASB Statements No. 4,
44, and 64,  Amendment  of FASB  Statement  No. 13, and  Technical  Corrections"
("SFAS 145").  SFAS 145 updates,  clarifies and simplifies  existing  accounting
pronouncements.  While the technical corrections to existing  pronouncements are
not  substantive  in  nature,  in some  instances,  they may  change  accounting
practice.  The provisions of this standard  related to SFAS No. 13 are effective
for  transactions  occurring  after May 15, 2002.  All other  provisions of this
standard  must be applied for  financial  statements  issued on or after May 15,
2002, with early application encouraged. The adoption of SFAS 145 did not have a
material effect on our results of operations or financial position.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

     We are exposed to market risk associated with changes in interest rates. We
are subject to interest  rate risk related to our  variable-rate  line of credit
and  capital  expenditure  term  note as  described  in Note 7 of the  Notes  to
Consolidated Financial Statements.

     At March 31, 2002, our variable rate long-term debt had a carrying value of
$6.0 million. The fair value of the debt approximates the carrying value because
the variable  rates  approximate  market rates. A 10% increase in the period end
interest  rate  would  not have a  material  adverse  affect on our  results  of
operations and financial condition.


Item 8.    Financial Statements and Supplementary Data.

     The financial  statements and supplementary  data, together with the report
of  independent  Certified  Public  Accountants,  required by Regulation S-X are
included in this Form 10-K commencing on Page F-1.


Item 9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure.

     Not Applicable.


                                       35


                                    PART III


Item 10.   Directors and Executive Officers of the Registrant.

     The information concerning directors required by Item 10 is incorporated by
reference to our Proxy  Statement  for our 2002 Annual  Meeting of  Shareholders
scheduled  for  August  2002.  The  information  concerning  executive  officers
required by Item 10 is contained in the discussion  entitled "Executive Officers
of the Registrant" in Part I hereof.


Item 11.   Executive Compensation.

     The  information  required by Item 11 is  incorporated  by reference to our
Proxy Statement for our 2002 Annual Meeting of Shareholders scheduled for August
2002.


Item 12.   Security Ownership of Certain Beneficial Owners And Management.

     The  information  required by Item 12 is  incorporated  by reference to our
Proxy Statement for our 2002 Annual Meeting of Shareholders scheduled for August
2002.


Item 13.   Certain Relationships and Related Transactions.

     The  information  required by Item 13 is  incorporated  by reference to our
Proxy Statement for our 2002 Annual Meeting of Shareholders scheduled for August
2002.



                                     PART IV


Item 14.   Exhibits, Financial Statements, Schedules and Reports on Form 8-K.

         (a)(1)   Financial Statements

     The following consolidated financial statements are filed as a part of this
report:

                  Report of Independent Certified Public Accountants

                  Consolidated Balance Sheets

                  Consolidated Statements of Operations

                  Consolidated Statements of Changes in Stockholders' Equity

                  Consolidated Statements of Cash Flows

                  Notes to Consolidated Financial Statements

                                       36



     All of the financial  statement  schedules have been omitted because of the
absence of the conditions  under which they are required or because the required
information is included in the  consolidated  financial  statements or the notes
thereto.


         (a)(3)   Exhibits


 Exhibit
 Number   Description                          Method of Filing
--------  ------------                        ------------------
  3.1     Articles of Incorporation     Incorporated   by  reference  to  our
                                        Form  10-Q  for  the  quarter   ended
                                        September 30, 1997.


  3.2     By-Laws, as amended           Incorporated   by  reference  to  our
                                        Report  on Form  10-K  for  the  year
                                        ended March 31, 1999.

 10.1     Registration Rights           Incorporated   by  reference  to  our
          Agreement  dated as           Report  on Form  8-K  dated  April 6,
          of April 6, 1992              1992.

 10.2     Amended and Restated 1986     Incorporated   by  reference  to  our
          Directors and Consultants     Registration  Statement  on Form  S-8
          Stock Option Plan             filed September 9, 1992.


 10.3     1992 Incentive Stock          Incorporated   by  reference  to  our
          Option Plan, as amended       Proxy   Statement   for  the   Annual
                                        Meeting  of   Shareholders   held  on
                                        November 19, 1992.

 10.4     Whitman Education Group,      Incorporated   by  reference  to  our
          Inc.1996 Stock Option         Form 10-Q for the quarter  ended June
          Plan, as amended              30, 1997.

 10.5     Form of Security              Incorporated   by  reference  to  our
          Agreement, dated  May 20,     Report  on Form  10-K  for  the  year
          1999, by each of Colorado     ended March 31, 1999.
          Technical University,
          Inc., MDJB, Inc.,
          Sanford-Brown College,
          Inc.and Ultrasound
          Technical Services,  Inc.
          in favor of Merrill Lynch
          Business Financial
          Services, Inc.

 10.6     Form of Unconditional         Incorporated   by  reference  to  our
          Guaranty, dated May 20,       Report  on Form  10-K  for  the  year
          1999 by each of Colorado      ended March 31, 1999.
          Technical University,
          Inc., MDJB, Inc.,
          Sanford-Brown College,
          Inc. and Ultrasound
          Technical Services, Inc.
          in favor of Merrill Lynch
          Business Financial
          Services, Inc.


                                       37


 10.7     WCMA Loan and Security        Incorporated   by  reference  to  our
          Agreement dated May 20,       Report  on Form  10-K  for  the  year
          1999, by and between          ended March 31, 1999.
          Merrill Lynch Business
          Financial Services, Inc.
          and Whitman Education
          Group, Inc.

 10.8     Term Loan and Security        Incorporated by reference to our Report
          Agreement dated March 21,     on Form 10-K for the year ended
          2001, by and between          March 31, 2001.
          Merrill Lynch Business
          Financial Services, Inc.
          and Whitman Education
          Group, Inc.

 10.9     Collateral  Installment       Incorporated by reference to our Report
          Note dated March 21,2001,     on Form 10-K for the year ended
          by and between  Merrill       March 31, 2001.
          Lynch  Business Financial
          Services, Inc. and
          Whitman Education Group,
          Inc.

 10.10    Form of Unconditional         Incorporated by reference to our Report
          Guaranty, dated March 21,     on Form 10-K for the year ended
          2001 by each of Colorado      March 31, 2001.
          Technical University,
          Inc., CTU Corporation
         (f/k/a MDJB, Inc.),
          Sanford-Brown College,
          Inc. and Ultrasound
          Technical Services, Inc.
          in favor of Merrill Lynch
          Business Financial
          Services, Inc.

 10.11    Form of Security              Incorporated by reference to our Report
          Agreement dated March 21,     on Form 10-K for the year ended
          2001 by each of Colorado      March 31, 2001.
          Technical University,
          Inc., CTU Corporation
         (f/k/a MDJB, Inc.),
          Sanford-Brown College,
          Inc. and Ultrasound
          Technical Services,
          Inc. in favor of Merrill
          Lynch Business Financial
          Services, Inc.

 10.12    Richard C. Pfenniger          Filed herewith.
          Stock Option Agreement

 21       Subsidiaries                  Incorporated   by  reference  to  our
                                        Report  on Form  10-K  for  the  year
                                        ended March 31, 1996.

 23.1     Consent of Ernst & Young      Filed herewith.
          LLP
_______________________

      Certain  exhibits and schedules to this  document have not been filed. The
Registrant  agrees to furnish a copy of any  omitted  schedule or exhibit to the
Securities and Exchange Commission upon request.

     (b)We filed no reports on Form 8-K during the quarter ended March 31, 2002.

                                       38


                                   SIGNATURES

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

                               WHITMAN EDUCATION GROUP, INC.
                               By:   /s/ FERNANDO L. FERNANDEZ
                               Fernando L. Fernandez
                               Vice President - Finance,Chief Financial Officer,
                               Secretary and Treasurer
Dated:   June 12, 2002

     Pursuant to the requirements of the Securities Act of 1934, this Report has
been signed below by the  following  persons on behalf of the  registrant in the
capacities and on the dates indicated.

Signatures                           Title                         Date

 /s/ PHILLIP FROST, M.D.             Chairman of the Board         June 12, 2002
------------------------------
     Phillip Frost, M.D.

/s/ RICHARD C. PFENNIGER, JR.        Vice Chairman of the Board    June 12, 2002
------------------------------       and Chief Executive Officer
    Richard C. Pfenniger, Jr.       (Principal Executive Officer)

/s/ FERNANDO L. FERNANDEZ            Vice President, Chief
------------------------------       Financial Officer,            June 12, 2002
    Fernando L. Fernandez            Secretary and Treasurer
                                    (Principal Financial and
                                     Accounting Officer)

/s/ JACK R. BORSTING, Ph.D.          Vice Chairman of the Board    June 12, 2002
------------------------------
    Jack R. Borsting, Ph.D.

/s/ PETER S. KNIGHT                  Director                      June 12, 2002
------------------------------
    Peter S. Knight

/s/ LOIS F. LIPSETT, Ph.D.           Director                      June 12, 2002
------------------------------
    Lois F. Lipsett, Ph.D.

/s/ RICHARD M. KRASNO, Ph.D.         Director                      June 12, 2002
------------------------------
    Richard M. Krasno, Ph.D.

/s/ PERCY A. PIERRE, Ph.D.           Director                      June 12, 2002
------------------------------
    Percy A. Pierre, Ph.D.


/s/ NEIL FLANZRAICH                  Director                      June 12, 2002
------------------------------
     Neil Flanzraich

/s/ A. MARVIN  STRAIT, C.P.A.        Director                      June 12, 2002
------------------------------
    A. Marvin Strait, C.P.A.




                 Whitman Education Group, Inc. And Subsidiaries
                        Consolidated Financial Statements
                                 March 31, 2002


                                    CONTENTS

                                                                            Page

Report of Independent Certified Public Accountants.....................     F- 2
Consolidated Balance Sheets............................................     F- 3
Consolidated Statements of Operations..................................     F- 4
Consolidated Statements of Changes in Stockholders' Equity.............     F- 5
Consolidated Statements of Cash Flows..................................     F- 6
Notes to Consolidated Financial Statements.............................     F- 8








                                     -F 1-








               Report of Independent Certified Public Accountants


The Board of Directors and Stockholders
Whitman Education Group, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Whitman
Education  Group,  Inc. and  subsidiaries  as of March 31, 2002 and 2001 and the
related  consolidated  statements of operations,  stockholders'  equity and cash
flows for each of the three  years in the period  ended  March 31,  2002.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Whitman Education
Group,  Inc. and  subsidiaries at March 31, 2002 and 2001, and the  consolidated
results of their  operations and their cash flows for each of the three years in
the period  ended March 31,  2002,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

As discussed in Note 1 to the  consolidated  financial  statements,  in 2001 the
Company  changed its method of revenue  recognition  for certain fees  effective
April 1, 2000.


                                            /s/      ERNST & YOUNG LLP



Miami, Florida
May 29, 2002


                                  -F 2-




                 Whitman Education Group, Inc. and Subsidiaries
                           Consolidated Balance Sheets


                                                      March 31,
                                        ----------------------------------------
                                               2002                  2001
                                        -----------------     ------------------
 Assets
 Current assets:
      Cash and cash equivalents......      $ 14,010,878          $  5,892,779
      Accounts receivable, net.......        23,425,589            26,134,128
      Inventories....................         1,633,917             1,516,439
      Deferred tax assets, net.......         3,376,197             4,571,905
      Other current assets...........         2,273,607             1,551,714
                                        -----------------     ------------------
           Total current assets......        44,720,188            39,666,965
 Property and equipment, net.........        10,804,417            11,727,583
 Deposits and other assets...........         2,296,002             2,183,324
 Goodwill, net.......................         9,288,622             9,288,622
                                        -----------------     ------------------
           Total assets..............      $ 67,109,229         $  62,866,494
                                        =================     ==================

 Liabilities and Stockholders' Equity
 Current liabilities:
      Accounts payable...............     $  1,716,674          $   2,356,996
      Accrued expenses...............        6,749,811              3,106,146
      Current portion of capitalized
        lease obligations............        1,781,501              1,859,195
      Current portion of capital
        expenditure note payable.....        1,300,000                541,667
      Deferred tuition revenue.......       23,269,177             22,500,137
                                        -----------------     ------------------
          Total current liabilities..       34,817,163             30,364,141
 Capitalized lease obligations.......        2,815,136              3,379,826
 Capital expenditure note payable....        4,658,333              5,958,333
 Line of credit......................                -              1,789,897
 Deferred tax liability..............        1,091,960                829,867
 Commitments and contingencies
 Stockholders' equity:
     Common stock, no par value;
      authorized 100,000,000 shares;
      issued 14,262,648 shares in 2002
      and 14,077,266 shares in 2001;
      outstanding 13,827,854 shares
      in 2002 and 13,642,472 shares in
      2001............................      23,198,153             22,748,613
     Additional paid-in capital.......         805,309                674,173
     Accumulated deficit..............        (276,825)            (2,878,356)
                                        -----------------     ------------------
          Total stockholders' equity..      23,726,637             20,544,430
                                        -----------------     ------------------
          Total liabilities and
          stockholders' equity........    $ 67,109,229            $62,866,494
                                        =================     ==================


                 See accompanying notes to financial statements.


                                       -F 3-



                 Whitman Education Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations


                                                Year Ended March 31,
                                  ----------------------------------------------
                                      2002             2001              2000
                                  -------------    -------------    ------------

Net revenues...................   $ 91,926,806     $ 79,629,315    $ 77,611,312

Costs and expenses:
  Instructional and
   educational support.........     58,470,054       52,670,430      51,567,309
  Selling and promotional......     14,425,245       14,312,141      12,314,109
  General and
   administrative..............     13,971,977       12,070,282      12,206,227
  Legal settlement.............             -                -        1,550,000
                                  -------------    -------------    ------------
Total costs and expenses.......     86,867,276       79,052,853      77,637,645
                                  -------------    -------------    ------------

Income (loss) from operations..      5,059,530          576,462         (26,333)

Other (income) and expenses:
  Interest expense.............        932,083        1,142,886       1,128,876
  Interest income..............       (369,280)        (334,983)       (320,508)
Loss on Huron investment.......              -        1,164,613               -
                                  -------------    -------------    ------------
Income (loss) before income tax
  provision (benefit)and
  cumulative effect of change
  in accounting principle......      4,496,727       (1,396,054)       (834,701)
Income tax provision (benefit).      1,895,196         (538,159)       (332,545)
                                  -------------    -------------    ------------

Income (loss) before cumulative
  effect of change in
  accounting principle.........      2,601,531         (857,895)       (502,156)
Cumulative effect of change in
  accounting principle, net of
  tax benefit of $375,981......              -         (563,971)              -
                                  -------------    -------------    ------------
Net income (loss)..............   $  2,601,531     $ (1,421,866)    $  (502,156)
                                  =============    =============    ============

Basic income (loss) per share:
Income (loss) before cumulative
  effect of change in
  accounting principle.........   $       0.19      $     (0.07)    $     (0.04)
Cumulative effect of change in
  accounting principle, net of
  tax..........................              -            (0.04)              -
                                  -------------    -------------    ------------
Net income (loss) .............   $       0.19      $     (0.11)    $     (0.04)
                                  =============    =============    ============
Diluted income (loss) per share:
Income (loss) before cumulative
  effect of change in
  accounting principle.........   $       0.18      $     (0.07)    $     (0.04)
Cumulative effect of change in
  accounting principle, net of
  tax..........................              -            (0.04)              -
                                  -------------    -------------    ------------
Net income (loss) .............   $       0.18     $      (0.11)    $     (0.04)
                                  =============    =============    ============

Weighted average common shares
outstanding:
  Basic........................     13,696,354       13,370,030      13,392,696
                                  =============    =============    ============
  Diluted......................     14,318,169       13,370,030      13,392,696
                                  =============    =============    ============


                 See accompanying notes to financial statements.


                                      -F 4-


                 Whitman Education Group, Inc. and Subsidiaries
           Consolidated Statements of Changes in Stockholders' Equity
                    Years Ended March 31, 2002, 2001 and 2000


               Common                     Additional
               Shares         Common       Paid-In      Accumulated
              Outstanding     Stock        Capital       Deficit         Total
Balance at    ------------------------------------------------------------------
 March 31,
 1999          13,423,212   $21,907,546   $ 671,536    $ (954,334) $ 21,624,748
Repurchase
 of treasury
 shares.......  (195,100)      (370,406)          -             -      (370,406)
Shares issued
 in connection
 with exercise
 of options...     5,000         19,375       2,637             -        22,012
Shares issued
 in connection
 with stock
 purchase
 plan.........    31,625        104,530           -             -       104,530
Shares issued
 in connection
 with 401(k)
 employee
 match........   147,718        406,226           -             -       406,226
Comprehensive
loss:
 Net loss.....         -              -           -      (502,156)     (502,156)
 Comprehensive                                                     -------------
 loss.........                                                         (502,156)
Balance at    -----------   ------------  ---------    ----------- -------------
 March 31,
 2000          13,412,455    22,067,271     674,173    (1,456,490)   21,284,954
Repurchase of
 treasury
 shares.......    (90,000)     (127,935)          -             -      (127,935)
Shares issued
 in connection
 with exercise
 of options...    150,000       418,875           -             -       418,875
Shares issued
 in connection
 with stock
 purchase
 plan.........     55,865        89,436           -             -        89,436
Shares issued
 in connection
 with 401(k)
 employee
 match........    114,152       300,966           -             -       300,966
Comprehensive
loss:
 Net loss.....        -               -           -    (1,421,866)   (1,421,866)
 Comprehensive                                                     -------------
 loss.........                                                       (1,421,866)
              -----------  -------------- ----------- ------------ -------------
Balance at
March 31,
2001           13,642,472    22,748,613     674,173    (2,878,356)   20,544,430

Shares issued
 in connection
 with exercise
 of options...    159,350       387,956     131,136             -       519,092
Shares issued
 in connection
 with stock
 purchase
 plan ........     26,032        61,584           -             -        61,584
Comprehensive
income:
 Net income...         -              -           -     2,601,531     2,601,531
                                                                   -------------
 Comprehensive
 income.......         -              -           -             -     2,601,531
 Balance at   ------------  ------------  ----------   ----------- -------------
 March 31,
 2002         13,827,854    $23,198,153   $ 805,309    $ (276,825) $ 23,726,637
              ============  ============  ==========   =========== =============

                 See accompanying notes to financial statements.

                                     -F 5-



                 Whitman Education Group, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows

                                             Year Ended March 31,
                            ----------------------------------------------------
                                  2002             2001              2000
                            ---------------  ----------------  -----------------
Cash flows from operating
 activities:
Net income (loss)........    $ 2,601,531     $  (1,421,866)      $  (502,156)

Adjustments to reconcile
 net income (loss) to net
 cash provided by
 operating activities:
  Depreciation and
   amortization..........      3,744,494         3,872,444         4,323,135
  Bad debt expense.......      4,657,498         3,984,551         3,427,524
  Deferred tax provision
  (benefit)..............      1,457,801          (941,070)         (238,263)
  Loss on Huron
   investment............              -         1,164,613                 -
 Changes in operating
 assets and liabilities:
  Accounts receivable....     (1,948,959)       (3,919,876)       (3,011,711)
  Inventories............       (117,478)         (106,990)          (67,668)
  Other current assets...       (722,552)          269,199          (444,007)
  Deposits and other
   assets................       (130,978)           21,733          (495,412)
  Accounts payable.......       (640,322)        1,011,258          (157,546)
  Accrued expenses.......      3,643,665        (2,324,771)        2,907,971
  Income taxes payable...              -                 -          (898,664)
  Deferred tuition
   revenue...............        769,040           910,314          2,264,331
  Other liabilities......              -                 -          (474,842)
                           ---------------  ----------------   -----------------
Net cash provided by
 operating activities....     13,313,740         2,519,539         6,632,692
                           ---------------  ----------------   -----------------

Cash flows from investing
 activities:
Purchase of property
 and equipment...........     (1,404,301)       (1,964,273)       (1,236,511)
Investment in Huron
 University..............              -                -         (1,164,613)
                           ---------------  -----------------  -----------------
Net cash used in
 investing activities....     (1,404,301)       (1,964,273)       (2,401,124)
                           ---------------  -----------------  -----------------

Cash flows from financing
 activities:
Proceeds from line of
 credit and long-term
 debt....................        163,846        28,382,490        39,000,577
Principal payments on
 line of credit,long-term
 debt and capital lease
 obligations.............     (4,535,862)      (29,482,091)      (41,198,653)
Repurchase of treasury
 shares..................              -          (127,935)         (370,406)
Proceeds from purchases
 in stock purchase plan
 and exercise of options.        580,676           508,311           126,542
                            --------------  ----------------- ------------------
Net cash used in
 financing activities....     (3,791,340)         (719,225)       (2,441,940)
                            --------------  ----------------- ------------------

Increase (decrease) in
 cash and cash
 equivalents.............      8,118,099          (163,959)        1,789,628
Cash and cash equivalents
 at beginning of year....      5,892,779         6,056,738         4,267,110
                            --------------  ----------------- ------------------
Cash and cash equivalents
 at end of year..........   $ 14,010,878     $   5,892,779       $ 6,056,738
                            ==============  ================= ==================

Continued on the following page.

                 See accompanying notes to financial statements.


                                     -F 6-



                 Whitman Education Group, Inc. and Subsidiaries
               Consolidated Statements of Cash Flows - (Continued)

                                              Year Ended March 31,
                            ----------------------------------------------------
                                 2002               2001                2000
                            ----------------   ---------------    --------------
Supplemental disclosures
 of noncash financing and
 investment activities:

Equipment acquired under
 capital leases..........    $  1,398,068        $ 2,054,462        $ 1,749,303
                            ================   ===============    ==============
Value of stock issued for
 401(k) employee match...    $          -        $   300,966        $   406,226
                            ================   ===============    ==============

Supplemental disclosures
 of cash flow information:

Interest paid............    $    932,083        $ 1,142,886        $ 1,128,876
                            ================   ===============    ==============
Income taxes paid........    $    481,176        $    22,783        $ 1,494,433
                            ================   ===============    ==============


                 See accompanying notes to financial statements.


                                     -F 7-





                 Whitman Education Group, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

1.   Summary of Significant Accounting Policies

Business

     The primary business of Whitman  Education Group, Inc. and its subsidiaries
("Whitman" or the "Company") is the operation of proprietary  schools offering a
range of graduate,  undergraduate and non-degree certificate or diploma programs
primarily in the fields of  healthcare,  information  technology  and  business.
Whitman's operations are conducted through its three wholly-owned  subsidiaries:
Ultrasound Technical Services, Inc. ("UDS"), Sanford Brown College, Inc. ("SBC")
and CTU Corporation,  the parent corporation of Colorado  Technical  University,
Inc. ("CTU").  The revenues generated from these subsidiaries  primarily consist
of tuition and fees paid by  students.  The  majority of students  rely on funds
received  from  federal  financial  aid  programs  under  Title IV of the Higher
Education Act of 1965, as amended ("Title IV"), to pay for a substantial portion
of their tuition.

     As an educational institution, Whitman is subject to licensure from various
accrediting  and state  authorities  and other  regulatory  requirements  of the
United States Department of Education ("Department of Education").

Principles of Consolidation

     The  consolidated  financial  statements  include  the  accounts of Whitman
Education  Group,  Inc.  and  its  wholly-owned  subsidiaries.  All  significant
intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

     Whitman considers all highly liquid short-term  investments  purchased with
an original maturity of three months or less to be cash equivalents.

Revenues, Accounts Receivable and Deferred Tuition Revenue

     Whitman  charges the student for the full contract  amount at the beginning
of the course, the academic year, or the academic term, as applicable, resulting
in the recording of an account  receivable and a corresponding  deferred tuition
revenue  liability.  The  deferred  tuition  revenue  liability  is reduced  and
recognized  into income over the term of the relevant  period being  attended by
the  student.  If a student  withdraws  from a course or program,  the  unearned
portion of the program that the student has paid for is refunded  generally on a
pro rata basis.

     Accounts  receivable  balances are reviewed no less than  quarterly for the
purpose of determining  appropriate  levels of allowance for doubtful  accounts.
The Company  establishes the allowance for doubtful  accounts using an objective
model,  which applies  various  expected  loss  percentages  to certain  student
accounts  receivable  categories  based on historical bad debt  experience.  The
Company  charges-off  accounts  receivable  balances deemed to be  uncollectible
usually  after  they  have  been  sent  to  a  collection  agency  and  returned
uncollected.  All  charge-offs  are recorded as  reductions in the allowance for
doubtful  accounts,  with any  recoveries  of  previously  written-off  accounts
receivable recorded as increases to the allowance for doubtful accounts.


                                     -F 8-


                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

1.      Summary of Significant Accounting Policies  - (Continued)


     The Securities  and Exchange  Commission  ("SEC")  issued Staff  Accounting
Bulletin No. 101, "Revenue  Recognition in Financial  Statements" ("SAB 101") in
December  1999.  Prior  to  the  release  of  SAB  101,  the  Company's  revenue
recognition  policy  was in  compliance  with  accounting  principles  generally
accepted  in the United  States of  America.  In order to conform  with SAB 101,
however,  Whitman  changed  the  method  by  which  it  recognizes  revenue  for
laboratory and registration  fees charged to a student.  Previously,  laboratory
and registration fees were recognized as revenue at the beginning of an academic
term or year, as  applicable.  As of April 1, 2000,  Whitman  began  recognizing
revenue  for  these  fees  ratably  over the life of an  education  program  and
recorded  a  cumulative   effect  of  a  change  in   accounting   principle  of
approximately  $564,000,  net of taxes of approximately  $376,000. The effect of
the change for the year ended March 31, 2001 was to decrease the loss before the
cumulative effect of a change in accounting principle by approximately  $43,000.
Pro forma net loss and net loss per share  amounts  for the year ended March 31,
2000,  had  the  new  accounting  principle  been  applied  retroactively,   are
$(483,000) and $(0.04), respectively.

     For the three months ended June 30, 2000,  September  30, 2000 and December
31, 2000, the Company recognized $614,000, $223,000 and $103,000,  respectively,
in revenue that was included in the cumulative  effect adjustment as of April 1,
2000. The effect of recognizing that revenue in the first and second quarter was
to decrease the net loss by approximately  $369,000 and $134,000,  respectively,
and to increase net income in the third  quarter by  approximately  $61,000 (all
net of taxes).


Inventory

     Inventory consists primarily of books,  uniforms and supplies and is valued
at the lower of cost or market using the first-in, first-out (FIFO) method.

Property and Equipment

     Property and equipment is stated at cost,  less  accumulated  depreciation.
Expenditures  for  maintenance  and repairs which do not add to the value of the
related  assets or  materially  extend  their  original  lives are  expensed  as
incurred.

     Depreciation  of property  and  equipment  is computed  principally  by the
straight-line  method over the estimated useful lives of the assets ranging from
one to ten years.  Leasehold  improvements  are  amortized  over the term of the
related leases,  which  approximates  the estimated  useful lives.  Depreciation
expense amounted to approximately $3,726,000,  $3,576,000 and $3,954,000 for the
years ended March 31 2002, 2001, and 2000, respectively.



                                -F 9-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

1.   Summary of Significant Accounting Policies  - (Continued)

Goodwill

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting Standards No. 141, "Business  Combinations",  and No. 142,
"Goodwill  and Other  Intangible  Assets"  ("SFAS 141 and 142"),  effective  for
fiscal years  beginning after December 15, 2001.  Under the new rules,  goodwill
(and  intangible  assets  deemed  to have  indefinite  lives)  will no longer be
amortized but will be subject to annual  impairment tests, or more frequently if
impairment indicators arise. Other identifiable  intangible assets will continue
to be amortized over their estimated useful lives.

     Whitman elected to early adopt the provisions of SFAS 141 and 142 effective
April 1, 2001.  Prior to the release of SFAS 141 and 142, the Company  amortized
the  goodwill  associated  with  acquisitions  using the  straight-line  method,
principally  over  a  forty-year  period.  Application  of  the  nonamortization
provision of SFAS 142 resulted in an increase in net income of $162,000,  net of
taxes,  for the year ended March 31,  2002.  Pro forma net loss and net loss per
basic and diluted  share  amounts,  for the years ended March 31, 2001 and 2000,
had  SFAS  142  been  applied  retroactively,   would  have  been  approximately
$(1,251,000) and $(.09) and $(334,000) and $(.02), respectively.

     During September 2001, the Company  completed its  transitional  impairment
test of goodwill in  accordance  with SFAS 142. As a result of this test, it was
determined  that there was no impairment  of goodwill.  As of March 31, 2002 and
2001, accumulated goodwill amortization was approximately $1,295,000.

Impairment of Long-Lived Assets

     Whitman accounts for the impairment of long-lived assets under Statement of
Financial  Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived  Assets ("SFAS 121").  "SFAS 121 requires  impairment losses to be
recorded on long-lived  assets used in operations  when indicators of impairment
are present and the  undiscounted  cash flows estimated to be generated by those
assets  are  less  than  the   assets'   carrying   amount.   Based  on  current
circumstances,  Whitman  does not believe  that any  impairment  indicators  are
present.

Income (Loss) Per Common Share

     Basic  income  (loss)  before  cumulative  effect of  change in  accounting
principle,  cumulative effect of change in accounting principle,  net of tax and
net income (loss) per common share is computed using the weighted average number
of common shares  outstanding  during the period.  Diluted  income (loss) before
cumulative effect of change in accounting principle, cumulative effect of change
in accounting principle,  net of tax and net income (loss) per share is computed
using the  weighted  average  number  of common  and  common  equivalent  shares
outstanding during the period.


                                     -F 10-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


1.   Summary of Significant Accounting Policies - (Continued)

Advertising

     Whitman expenses advertising costs as incurred.  Advertising expense, which
is included  in selling  and  promotional  expenses,  amounted to  approximately
$8,573,000,  $8,274,000, and $6,862,000 for the years ended March 31, 2002, 2001
and 2000, respectively.

Income Taxes

     Deferred  income tax assets and  liabilities  are  determined  based on the
differences between the financial  statements and income tax basis of assets and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to reverse.

Stock-Based Compensation

     Whitman has elected,  in  accordance  with the  provisions  of SFAS No. 123
"Accounting for Stock-Based  Compensation" ("SFAS 123") to account for its stock
plans under Accounting  Principles  Board Opinion No. 25,  "Accounting for Stock
Issued to  Employees"  ("APB  25") and  related  interpretations.  Under APB 25,
because the exercise  price of Whitman's  employee stock options is equal to the
market  price of the  underlying  stock on the date of  grant,  no  compensation
expense is recognized.

     Stock  options  granted  to  non-employees   have  been  accounted  for  in
accordance  with SFAS 123,  and  Emerging  Issues  Task  Force  Bulletin  96-18,
"Accounting for Equity  Instruments  that are Issued to Other Than Employees for
Acquiring,  or in  Conjunction  with Selling,  Goods or Services".  Accordingly,
compensation  expense is  determined  using the fair value of the  consideration
received or the fair value of the equity instruments  issued,  whichever is more
reliably  measured.  For the years  ended  March  31,  2002,  2001 and 2000,  no
compensation expense was incurred.

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 reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.


                                     -F 11-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

1.   Summary of Significant Accounting Policies - (Continued)


New Accounting Pronouncements

     In August 2001, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting  Standards No. 144,  "Accounting  for the Impairment or
Disposal  of  Long-Lived   Assets,"  ("SFAS  144"),  which  addresses  financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
SFAS 144 is effective for fiscal years  beginning  after  December 15, 2001, and
interim periods within those fiscal years, with early adoption  encouraged.  The
provisions of SFAS 144 generally are to be applied  prospectively.  Whitman does
not expect the adoption of SFAS 144 to have a material  effect on its results of
operations or financial position.

     In April 2002, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 145,  "Rescission of FASB Statements No. 4,
44, and 64,  Amendment  of FASB  Statement  No. 13, and  Technical  Corrections"
("SFAS 145").  SFAS 145 updates,  clarifies and simplifies  existing  accounting
pronouncements.  While the technical corrections to existing  pronouncements are
not  substantive  in  nature,  in some  instances,  they may  change  accounting
effective for transactions occurring after May 15, 2002. All other provisions of
this standard must be applied for  financial  statements  issued on or after May
15, 2002, with early  application  encouraged.  The adoption of SFAS No. 145 did
not have a material  effect on  Whitman's  results of  operations  or  financial
position.

Segment Reporting

     Whitman  complies  with SFAS No.  131,  "Disclosures  about  Segments of an
Enterprise and Related Information" ("SFAS 131"). SFAS 131 establishes standards


                                     -F 12-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

1.    Summary of Significant Accounting Policies - (Continued)

for the way that public business  enterprises report information about operating
segments in annual  financial  statements  and requires  that those  enterprises
report  selected  information  about  operating  segments  in interim  financial
reports.  It also establishes  standards for related  disclosures about products
and services, geographic areas, and major customers.

Reclassification

     Certain prior year amounts have been  reclassified to conform to the fiscal
year 2002 presentation.  These changes had no effect on previously  reported net
loss.

2.   Divestiture of Huron University

     In August 1999,  CTU  completed  the  divestiture  of its Huron  University
campus  ("Huron")  in Huron,  South Dakota to a newly  formed  entity  ("Newco")
capitalized by several investors and members of Huron's existing management.  In
connection with the  transaction,  CTU contributed the operating assets of Huron
and  $550,000  to Newco,  and Newco  issued  to CTU units of  limited  liability
company  membership  interests and assumed  certain  liabilities  of Huron.  The
liabilities  assumed by Newco included the principal balance due of $1.1 million
under a loan  agreement.  The loan was guaranteed by Whitman,  which had a first
priority  security  interest in certain assets of Newco, and had a maturity date
of July 2005.

     Under the terms of the transaction,  the units of limited liability company
membership  interests equaled 19.9% of the total  outstanding  limited liability
company  membership  interests  in Newco.  CTU's  units  included a  liquidation
preference  right and the same  voting  privileges  as all other  units  sold by
Newco.  Additionally,  Whitman  purchased  for  $110,000 a warrant to acquire 20
units of  limited  liability  company  interests  in  Newco,  which  would  have
represented  approximately 4% of the total outstanding limited liability company
membership  interests  in Newco upon  exercise.  The  warrant had a term of five
years and had an exercise price of $10,000 per unit. The investment in Newco was
recorded at a cost of approximately  $1.2 million,  which then approximated fair
value.  No gain or loss was recorded on the  transaction.  The effective date of
the  transaction  for  accounting,  tax, and  financial  statement  purposes was
September 1, 1999.  The terms of the  transaction  were  established  through an
arm's length negotiation.

     CTU's remaining investment in Huron was accounted for under the cost method
due to CTU's inability to exercise significant  influence over the operating and
financial policies of Newco. CTU's inability to exercise  significant  influence
over the  operating  and  financial  policies  of Newco was based on its limited
ownership  of only 19.9% of the voting  interests  of Newco and other  facts and
circumstances  related to its investment in Newco. For instance,  Whitman had no
representation  on the board of managers of Newco, no  participation  in Newco's
policymaking  processes,  no technological  dependency and no support of Newco's
administrative  or  accounting  services.  Additionally,  the president of Newco
owned 52% of the voting  interests of Newco and as the manager of Newco, had the
authority to act on its behalf without consent from other members.

                                     -F 13-


2.   Divestiture of Huron University - (Continued)

     During the year ended March 31, 2001, Newco had a net loss of approximately
$1,884,000.

     The  following  unaudited  pro forma  information  excludes  the results of
operations  of Huron  University  for the fiscal year ended March 31, 2000 as if
Whitman's sale of Huron  University to Newco had occurred at April 1, 1999. This
pro forma  information  does not purport to be  indicative  of the results  that
actually would have occurred if the  disposition had been effective on the dates
indicated.

         Net revenues.........................................      $76,172,000

         Net income...........................................        $ 157,000

         Basic and diluted net income per share...............        $     .01

     On April 26, 2001, a not-for-profit college acquired the assets and assumed
certain liabilities of Newco. This transaction released Whitman from any further
obligations  associated with Huron,  including its guarantee of the $1.1 million
loan assumed by Newco.  Because  Whitman did not receive any proceeds  from this
transaction,   CTU  recorded  a  one-time   non-recurring   non-cash  charge  of
approximately  $1,165,000,  or $0.05 per diluted  share,  in the fiscal  quarter
ended March 31, 2001 relating to its minority ownership of Newco.

     In connection with the 1999  divestiture of Huron,  Whitman provided a loan
of $500,000 to the former  president of Huron for the purpose of investing  such
funds in Newco. The loan is due in August 2005 with monthly interest payments at
the prime rate which  commenced in October  1999.  The loan is secured by 80,000
shares of Whitman  common  stock  owned by the former  president  of Huron.  The
not-for-profit  college that  acquired  Newco has also agreed to guarantee  this
loan.  In October  2001,  the loan went into default by virtue of the failure of
the required  monthly interest  payments to be made and Whitman  accelerated all
amounts due under the loan.  In May 2002,  Whitman  received a default  judgment
against  the  not-for-profit  college  that  guaranteed  the loan and  commenced
collection  efforts to enforce the judgment.  Whitman believes the collateral of
80,000  shares of Whitman  common  stock is adequate and has elected not to take
action against the former president of Huron at this time.

3.   Financial Aid Programs

     Approximately  65% of Whitman's  net revenues  collected  during the fiscal
year ended  March 31, 2002 were  received  from  students  who  participated  in
government  sponsored  financial aid programs under Title IV. These programs are
subject to program  review by the Department of Education.  Disbursements  under
each program are subject to  disallowance  and  repayment by the schools.  These
programs  also  require  that  Whitman  and  certain  of its  subsidiaries  meet
Standards  of  Financial   Responsibility   established  by  the  Department  of
Education.  The standards  require  Whitman and certain of its  subsidiaries  to
maintain certain financial ratios and  requirements,  all of which have been met
at March 31, 2002.

                                     -F 14-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


4.      Accounts Receivable

        A summary of activity for the allowance for doubtful accounts is as
        follows:

                                          Year Ended March 31,
                          ------------------------------------------------------
                                2002                 2001             2000
                          ------------------  ------------------- --------------
Balance at beginning
 of year...............     $  6,768,688       $  5,672,824        $  5,593,888
Charged to expense.....        4,657,498          3,984,551           3,427,524
Accounts charged-off
 during the year, net
 of recoveries.........       (4,595,112)        (2,888,687)         (3,348,588)
                          ------------------  ------------------ ---------------
Balance at end of year.     $  6,831,074        $ 6,768,688        $  5,672,824
                          ==================  ================== ===============


5.      Property and Equipment

        Property and equipment consist of the following:


                              Estimated                   March 31,
                              Useful Lives   -----------------------------------
                               (In Years)           2002                2001
                             ------------    ------------------  ---------------

Equipment..............          2-5          $  18,104,898      $   16,841,757
Leasehold improvements.          1-10             6,293,753           5,633,959
Furniture and fixtures.          7-10             4,842,630           4,402,911
Other..................           5               3,049,023           2,653,827
                                             ------------------- ---------------
                                                 32,290,304          29,532,454
Less accumulated
 depreciation and
 amortization..........                         (21,485,887)        (17,804,871)
                                             ------------------- ---------------
                                              $  10,804,417       $  11,727,583
                                             =================== ===============

6.      Income Taxes

        The components of the income tax provision (benefit) are as follows:

                                               Year ended March 31,
                               -------------------------------------------------
                                  2002             2001              2000
                               -----------   ---------------     ---------------

Current................        $  437,395    $      26,930        $     (94,282)
Deferred...............         1,457,801         (941,070)            (238,263)
                               -----------   ---------------     ---------------
Total income tax
 provision (benefit)...        $1,895,196    $    (914,140)        $   (332,545)
                               ===========   ===============     ===============

                                     -F 15-



                Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

6.   Income Taxes - (Continued)

     The  differences  between  the  federal  statutory  income tax rate and the
effective  income  tax  rate  are  summarized   below:

                                                 Year  ended  March  31,
                                        ----------------------------------------
                                             2002          2001        2000
                                        -------------  ------------  -----------

Statutory tax rate......................     34.0%        (34.0)%     (34.0)%
State income taxes, net.................      6.4          (1.9)       (5.7)
Permanent differences...................     (1.3)         (1.5)        6.6
Change in valuation allowance...........      2.2             -        (5.9)
Other, net..............................      0.8          (1.7)       (0.9)
                                        -------------  ------------  -----------

Effective tax rate......................     42.1%        (39.1)%     (39.9)%
                                        =============  ============  ===========

     Deferred income taxes reflect the net tax effects of temporary  differences
between the carrying amount of assets and  liabilities  for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
Whitman's net deferred income taxes are as follows:

                                                      March 31,
                                            ---------------------------------
                                                 2002             2001
                                            ----------------- ---------------
Current deferred tax assets:
 Accrued expenses.......................    $   366,000        $  498,000
 Reserves and allowances................      2,274,000         2,278,000
 Unrealized depreciation in
  investments...........................         96,000           404,000
 Deferred income........................         98,000            87,000
 Tax credits............................        408,000           420,000
 Net operating loss carryforwards.......        295,000           732,000
 Capital loss carryfowards..............        167,000           231,000
                                            ----------------- ---------------

Total current deferred tax assets before
 valuation allowance....................      3,704,000         4,650,000
 Valuation allowance....................       (100,000)                -
                                            ----------------- ---------------
Total current deferred tax assets.......      3,604,000         4,650,000
                                            ----------------- ---------------
Current deferred tax liability:
 Prepaid expenses and other.............       (228,000)          (78,000)
                                            ----------------- ---------------
Total current deferred tax liability....       (228,000)          (78,000)
                                            ----------------- ---------------
Total current deferred tax assets, net..    $ 3,376,000        $4,572,000
                                            ================= ===============

Non-current deferred tax liability:
Amortization of goodwill................    $(1,092,000)       $ (830,000)
                                            ================= ===============


                                     -F 16-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


6.   Income Taxes - (Continued)

     SFAS 109, "Accounting for Income Taxes",  requires a valuation allowance to
reduce the deferred tax assets reported if, based on the weight of the evidence,
it is more likely than not that some  portion or all of the  deferred tax assets
will not be realized.  After consideration of all of the evidence, both positive
and negative,  management has determined that a $100,000 valuation  allowance at
March 31, 2002 is necessary to reduce the deferred tax assets to the amount that
will more likely than not be  realized.  The  valuation  allowance  increased by
$100,000 in fiscal  2002,  increased  by $0 in fiscal  2001,  and  decreased  by
$50,000 in fiscal 2000.  At March 31, 2002,  Whitman has no remaining  available
federal  net  operating  loss  carryforwards.  At March 31,  2002,  Whitman  has
available   various  state  net  operating  loss   carryforwards   approximating
$8,243,000  expiring in the years 2011 through 2022.  Whitman has  approximately
$444,000 in capital loss  carryforwards  which begin to expire in 2004.  Whitman
also has an  alternative  minimum  tax credit of  approximately  $408,000  which
carries forward indefinitely.

7.   Debt

     On May 28, 1999,  Whitman entered into an $8.5 million line of credit which
is secured by all of the assets of  Whitman.  The  interest  rate on the line of
credit is  variable  and is equal to the sum of 2.90% and the 30-day  commercial
paper rate.  The line of credit  contains  certain  covenants,  that among other
things, require maintenance of minimum levels of tangible net worth and net cash
flow.  The line of credit also  contains a  restriction  that  limits  Whitman's
ability to acquire other entities at a cost in excess of $1.5 million.

     On March 21,  2001,  Whitman  restructured  the $8.5 million line of credit
into a $6.5  million  capital  expenditure  term note and a $2.0 million line of
credit.  The $6.5  million  capital  expenditure  term note was  established  to
provide long term capital  expenditure  financing for Whitman's  investments  in
property,  plant and equipment acquired in prior years. The capital  expenditure
term note is payable in seven monthly  installments  of interest only commencing
on April 21, 2001,  and  thereafter  52 monthly  installments  of principal  and
interest,  with a balloon payment due April 2006. The capital  expenditure  term
note is collateralized by property,  plant and equipment and all other assets of
Whitman. The line of credit is also secured by all of the assets of Whitman. The
interest  rate of the  capital  expenditure  term note and the line of credit is
variable and is equal to the sum of 2.90% and the 30-day  commercial paper rate.
At  March  31,  2002  and  2001,  the  interest  rates  were  4.70%  and  6.92%,
respectively.  The capital  expenditure term note and the line of credit contain
certain covenants,  that among other things,  require the maintenance of minimum
levels of tangible  net worth and net cash flow.  The capital  expenditure  term
note and line of credit also contain a restriction that limits Whitman's ability
to acquire  other  entities  at a cost in excess of $1.5  million.  At March 31,
2002, Whitman was in compliance with the covenants of the term note and the line
of credit. At March 31, 2002, the outstanding  balance of the line of credit was
$0 and letters of credit of $0.5  million  were  outstanding  under the facility
which reduced the amount available for borrowing.  The maturity date of the line
of credit is October 31, 2002.


                                     -F 17-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


7.   Debt - (Continued)

     Aggregate maturities of long-term debt at March 31, 2002 are as follows:

                   Fiscal Year
                   2003.......................     $  1,300,000
                   2004.......................        1,300,000
                   2005.......................        1,300,000
                   2006.......................        1,300,000
                   2007.......................          758,333
                                                   -----------------

                   Total......................     $  5,958,333
                                                   =================

8.   Capitalized Lease Obligations

     Whitman leases equipment under several lease agreements which are accounted
for as capital  leases.  The assets and  liabilities  under  capital  leases are
recorded at the lower of the net present value of the minimum lease  payments or
the fair value of the asset.  The assets are  amortized  over the related  lease
term.

     During 2002 and 2001,  Whitman entered into leases  totaling  approximately
$1,398,000  and  $2,054,000,  respectively,  in connection  with the purchase of
equipment.  The  amortization  of  leased  assets of  approximately  $1,976,000,
$1,225,000  and  $993,000 for the years ended March 31,  2002,  2001,  and 2000,
respectively,  is included in depreciation and amortization.  The following is a
summary of assets held under  capital  leases which are included in property and
equipment at March 31:

                                             2002                    2001
                                     --------------------     -----------------
      Equipment.....................    $ 10,311,374             $  9,533,844
      Furniture and fixtures........       1,816,294                1,417,300
      Software......................         464,731                  456,725
                                     --------------------     -----------------
                                          12,592,399               11,407,869
      Less accumulated amortization.      (7,740,480)              (6,002,726)
                                     --------------------     -----------------
                                        $  4,851,919             $  5,405,143
                                     ====================     =================



                                     -F 18-




                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


8.   Capitalized Lease Obligations - (Continued)

     Future minimum lease payments under capital leases at March 31, 2002 are as
follows:

              Fiscal Year
              2003.....................................        $ 2,140,447
              2004.....................................          1,483,683
              2005.....................................          1,052,477
              2006.....................................            579,565
              2007.....................................             43,352
                                                             ------------------
              Total minimum lease payments.............          5,299,524
              Less amount representing interest
              (8%-13%).................................           (702,887)
              Less amount classified as current........         (1,781,501)
                                                             ------------------
                                                               $ 2,815,136
                                                             ==================

9.   Employee Benefit Plan

     Whitman has a 401(k)  retirement  savings plan covering all employees  that
meet certain  eligibility  requirements.  Eligible  participating  employees may
elect to contribute up to a maximum amount of tax deferred  contribution allowed
by the Internal Revenue Code. Whitman matches a portion of such contributions up
to a maximum percentage of the employee's compensation.  Whitman's contributions
to the plan were  approximately  $305,000,  $301,000  and $329,000 for the years
ended  March 31,  2002,  2001 and 2000,  respectively.  In April  2002,  Whitman
distributed  66,212  shares of common stock to its employees for the fiscal year
2002 matching contribution.


                                     -F 19-


                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)


10.  Stock Option Plans

     Whitman has adopted stock option plans under which employees, directors and
consultants of Whitman may be issued options  covering up to 4,715,250 shares of
common  stock.  Options are granted at the fair market value of the stock at the
date of the grant,  with vesting  ranging up to five years and a maximum term of
7-10 years. A summary of stock option activity related to Whitman's stock option
plans is as follows:

                                          Weighted
                                           Average
                                           Exercise                  Number
                                        Price Per Share             Of Shares
                                    ------------------------    ----------------
   Outstanding March 31, 1999....          $  5.24                 3,518,850
   Granted.......................             3.68                   575,500
   Exercised.....................             3.88                    (5,000)
   Cancelled.....................             5.01                  (274,139)
                                                                ----------------

   Outstanding March 31, 2000....             4.16                 3,815,211
   Granted.......................             2.25                   708,150
   Exercised.....................             2.79                  (150,000)
   Cancelled.....................             6.49                  (411,811)
                                                                ----------------


   Outstanding March 31, 2001....             3.83                 3,961,550
   Granted.......................             3.62                   659,500
   Exercised.....................             2.43                  (159,350)
   Cancelled.....................             3.68                  (352,763)
                                                                ----------------

   Outstanding March 31, 2002....             3.86                 4,108,937
                                                                ================


     As required by SFAS 123, pro forma information  regarding net income (loss)
and income (loss) per share has been  determined as if Whitman had accounted for
its  employee  stock  options  under the fair value method of SFAS 123. The fair
value for these options was estimated at the date of grant using a Black-Scholes
options pricing model with the following weighted-average assumptions for fiscal
years 2002, 2001 and 2000, respectively: risk-free rates of 2.9%, 5.7% and 6.1%;
no  dividend  yields for the three  years;  volatility  factors of the  expected
market  price of  Whitman's  common  stock of 0.394,  0.614,  and  0.593;  and a
weighted-average  expected  life of the option of 7.0 years for the three years.
The  weighted-average  fair value of the stock  options  granted in fiscal years
2002, 2001 and 2000 was $1.65, $1.49 and $2.38, respectively.

     The  Black-Scholes  options  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options that have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because  Whitman's  employee  stock  options  have  characteristics
significantly  different  from  traded  options,  and  because  changes  in  the
subjective input assumptions can materially affect the fair value estimate,  the



                                     -F 20-



                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

10.  Stock Option Plans - (Continued)

existing models, in management's  opinion, do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized to expense over the  options'  vesting  period.  Whitman's
fiscal 2002, 2001 and 2000 pro forma information follows:

                                       2002             2001             2000
                                  --------------    -------------   ------------
Net income (loss)................  $  1,743,460     $(2,777,748)    $(2,150,937)
Net income (loss) per share:
 Basic...........................  $        .13     $      (.21)    $      (.16)
 Diluted.........................  $        .12     $      (.21)    $      (.16)

     The  exercise  price of options  outstanding  at March 31,  2002  ranged as
follows:

                                  Number              Weighted Average Remaining
      Exercise Plan            Of Options             Contractual Life (Years)
    ------------------       -------------           ---------------------------
      $1.50 - $2.25             815,650                           3.4
      $2.26 - $3.38           1,067,625                           5.0
      $3.39 - $5.06           1,201,750                           4.0
      $5.07 - $7.59             948,912                           2.7
      $7.60 - $11.39             75,000                           1.6
                             -------------
                              4,108,937
                             =============


     Stock options totaling 3,339,849, 3,162,645, and 2,774,452 were exercisable
at the end of fiscal 2002,  2001 and 2000,  respectively.  Common stock reserved
for issuance under the stock option plans aggregate to 4,715,250 shares at March
31, 2002.


11.  Related Party Transactions

     Whitman  purchases  certain  textbooks  and  materials  for  resale  to its
students  from an entity that is 40% owned by  Whitman's  former  president  and
Chief  Operating  Officer.  In the fiscal years ended March 31,  2002,  2001 and
2000,  Whitman  purchased   approximately   $147,900,   $97,500,  and  $148,800,
respectively, in textbooks and materials from that entity.

     In February 1996, Whitman moved its headquarters to Miami, Florida. Whitman
occupies  office  space  in a  building  owned  by IVAX  Corporation.  Whitman's
Chairman is also Chairman and Chief  Executive  Officer of IVAX  Corporation and
another  of our  directors  is  also a  Vice  Chairman  and  President  of  IVAX


                                     -F 21-


                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

Corporation.  Whitman's  Vice  Chairman  and Chief  Executive  Officer is also a
director of IVAX  Corporation.  Whitman  incurred rent expense of  approximately
$284,000,  $146,000 and $146,000 for fiscal years ended March 31, 2002, 2001 and
2000, respectively.

12.  Commitments and Contingencies

     Whitman leases classroom and office space under operating leases in various
buildings where the schools are located.  Certain of Whitman's  operating leases
contain rent escalation clauses.  Future minimum annual rental commitments under
noncancellable operating leases as of March 31, 2002 are as follows:


                 Fiscal Year

                 2003........................................$ 5,801,936
                 2004......................................... 5,110,992
                 2005......................................... 4,852,227
                 2006......................................... 4,358,533
                 2007......................................... 3,248,761
                 Thereafter................................... 7,622,561
                                                             --------------
                 Total minimum lease payments................$30,995,010
                                                             ==============


     Rent  expense  during  fiscal  2002,   2001  and  2000  was   approximately
$6,080,000, $6,035,000, and $5,766,000, respectively.

     In fiscal 2002 Whitman entered into financing agreements to acquire capital
equipment  totaling  approximately  $1,398,000.  In fiscal  2002,  approximately
$1,398,000 of capital  equipment  was financed  under these  agreements  and are
included under capitalized  lease  obligations.  At March 31, 2002,  Whitman had
$463,000 of letters of credit outstanding.

     On May 4,  2000,  Whitman,  in  conjunction  with its  insurance  carriers,
reached an agreement in  principle to settle the class action  lawsuit,  Cullen,
et. al. v. Whitman  Education  Group,  Inc.,  et. al. The  settlement  agreement
covers students who attended  Whitman's  Ultrasound  Diagnostic Schools any time
from August 1, 1994 to August 1, 1998 in either the general  ultrasound  program
or the non-invasive  cardiovascular technology program. The settlement agreement
provided for payment of $5,970,000 in cash and approximately  $1,346,000 in loan
forgiveness of delinquent  obligations owed by students to Whitman's  Ultrasound
Diagnostic  schools.  The actual cash payment of  approximately  $5,970,000  was
funded by Whitman  contributing  $1,170,000  and  Whitman's  insurance  carriers
contributing   $4,800,000.   Whitman  also   contributed   $1,346,000   in  debt
forgiveness,  all of which was fully reserved or previously written-off at March
31, 2000.  Whitman also provided for a reserve for potential claims from members
of the class action lawsuit who elected not to  participate  in the  settlement.
This reserve was estimated based on historical student settlement experience. As
a result of the cash settlement payment and estimated reserves, Whitman recorded

                                     -F 22-


                 Whitman Education Group, Inc. and Subsidiaries
            Notes to Consolidated Financial Statements - (Continued)

12.  Commitments and Contingencies - (Continued)

a one-time,  after-tax charge to earnings of approximately $930,000, or $.07 per
share in the fiscal quarter ended March 31, 2000. Although management denied the
allegations  of the  lawsuit,  and believed  the key  allegations  to be without
merit,   Whitman  entered  into  the  settlement  to  resolve  litigation  in  a
satisfactory business manner, to avoid disruption of Whitman's business,  and to
allow  Whitman  to pursue its  mission of  providing  quality  education  to its
students.

     Whitman  is a party  to  routine  litigation  incidental  to its  business,
including but not limited to, claims involving students or graduates and routine
employment  matters.  While there can be no assurance as to the ultimate outcome
of any such litigation,  management does not believe that any pending proceeding
will result in a  settlement  or an adverse  judgment  that will have a material
adverse effect on Whitman's financial condition or results of operations.


13.  Fair Value of Financial Instruments

     The carrying  amounts of cash and cash  equivalents,  accounts  receivable,
notes payable and accounts payable and accrued  expenses  approximate fair value
because of their short duration to maturity.  The carrying  amounts of revolving
credit  facilities and the capital  expenditure  note payable  approximate  fair
value because the interest rate is tied to a quoted variable index.

                                     -F 23-



14.  Earnings Per Share

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share:

                                               For the Year Ended March 31,
                                 -----------------------------------------------
                                    2002              2001            2000
                                 --------------  -------------  ----------------
Numerator:
Income (loss) before cumulative
 effect of change in accounting
 principle....................... $  2,601,531    $  (857,895)   $    (502,156)
Cumulative effect of change in
 accounting principle, net of
 tax.............................            -       (563,971)               -
                                 ---------------  ------------   ---------------
 Net income (loss)............... $  2,601,531    $(1,421,866)   $    (502,156)
                                 ===============  ============   ===============
Denominator:
  Denominator for basic earnings
   per share - weighted average
   shares........                   13,696,354     13,370,030       13,392,696
Effect of dilutive securities:
  Employee stock options.........      621,815              -                -
                                 ---------------  ------------   ---------------
  Dilutive potential common
  shares.........................      621,815              -                -
     Denominator for diluted
      earnings per share -
      adjusted weighted -
      average shares and
      assumed conversions........   14,318,169     13,370,030       13,392,696
                                 ===============  ============   ===============

Basic income (loss) before
  cumulative effect of change in
  accounting principle........... $       0.19    $     (0.07)    $      (0.04)
Cumulative effect of change in
  accounting principle, net of
  tax............................            -          (0.04)               -
                                 ---------------  ------------   ---------------
Basic net income (loss) per
  share.......................... $       0.19     $    (0.11)    $      (0.04)
                                 ===============  ============   ===============

Diluted income (loss) before
 cumulative effect of change in
 accounting principle............ $       0.18    $     (0.07)     $     (0.04)

Cumulative effect of change in
 accounting principle, net of
 tax.............................            -          (0.04)               -
                                 ---------------  ------------   ---------------
Diluted net income (loss)
 per share....................... $       0.18     $    (0.11)      $    (0.04)
                                 ===============  ============   ===============



15.  Segment and Related Information

     Whitman is organized into two reportable  segments,  the University  Degree
Division  and  the  Associate  Degree  Division,   through  three   wholly-owned
subsidiaries.  The University Degree Division primarily offers bachelor,  master
and  doctorate  degrees  through  CTU.  The  Associate  Degree  Division  offers
associate degrees and diplomas or certificates through SBC and UDS.

                                     -F 24-



15.  Segment and Related Information - (Continued)

     Whitman's  revenues are not  materially  dependent on a single  customer or
small group of customers.

     Summarized financial information concerning the Whitman reportable segments
is shown in the following table:

                                            For the Year Ended March 31,
                                   ---------------------------------------------
                                         2002            2001          2000
                                   -------------    -------------  -------------
Net revenues:
  Associate Degree Division......  $71,839,438       $60,084,422   $ 58,473,078
  University Degree Division.....   20,087,368        19,544,893     19,138,234
                                   -------------    -------------  -------------
  Total..........................  $91,926,806       $79,629,315   $ 77,611,312
                                   =============    =============  =============

Income (loss) before income
 tax provision (benefit) and
 cumulative effect of change in
 accounting principle:
  Associate Degree Division......  $ 6,524,956       $  (446,768)  $   (307,690)
  University Degree Division.....      541,137         1,204,701      1,757,834
  Other..........................   (2,569,366)       (2,153,987)    (2,284,845)
                                   -------------    -------------  -------------
  Total..........................  $ 4,496,727       $(1,396,054)  $   (834,701)
                                   =============    =============  =============


Capital expenditures:
  Associate Degree Division......  $ 1,711,502       $ 2,819,719
  University Degree Division....     1,087,837         1,191,542
  Other..........................        3,030             7,474
                                   -------------    -------------
  Total..........................  $ 2,802,369       $ 4,018,735
                                   =============    =============


                                              March 31,
                                   -------------    -------------
                                        2002             2001
                                   -------------    -------------
Total assets:
  Associate Degree Division......  $52,696,673       $49,157,580
  University Degree Division.....   10,773,292        11,895,647
  Other..........................    3,639,264         1,813,267
                                   -------------    -------------
  Total..........................  $67,109,229       $62,866,494
                                   =============    =============


                                     -F 25-




16.     Quarterly Financial Data (Unaudited)

     Summarized  unaudited  quarterly  financial data for the fiscal years ended
March 31, 2002 and 2001 are as follows:


                                                2002
                 ---------------------------------------------------------------
                    First             Second            Third           Fourth
                 --------------   --------------    -------------   ------------
Net revenues      $ 20,518,116     $ 21,384,299     $ 24,369,149    $25,655,242
Income from
 operations            320,976          211,418        2,338,916      2,188,220
Income before
 cumulative
 effect of
 change in
 accounting
 principle              97,027           29,627        1,328,886      1,145,991
Net income              97,027           29,627        1,328,886      1,145,991
Net income per
share:
 Basic            $        .01     $        .00     $        .10     $      .08
 Diluted          $        .01     $        .00     $        .09     $      .08


                                                2001
                 ---------------------------------------------------------------
                    First             Second            Third          Fourth
                 --------------   --------------    -------------   ------------

Net revenues      $ 18,879,430     $ 18,521,239     $  20,878,235   $21,350,411
(Loss) income
 from operations      (363,718)      (1,266,026)        1,103,990     1,102,216
(Loss) income
 before
 cumulative
 effect of change
 in accounting
 principle            (301,766)        (900,583)          518,022      (173,568)
Net (loss) income     (865,737)        (900,583)          518,022      (173,568)
Net (loss) income
 per share before
 cumulative
 effect of change
 in accounting
 principle        $      (0.02)    $      (0.07)    $        0.04   $     (0.01)

Net (loss) income
 per share (basic
 and diluted)     $      (0.06)    $      (0.07)    $        0.04   $     (0.01)



                                     -F 26-






              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

     We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-94200 and Form S-8 No. 33-52588) pertaining to the 1986 Amended
and  Restated   Directors  and  Consultants  Stock  Option  Plan,   Registration
Statements (Form S-8 No. 33-58068 and Form S-8 No.  33-94230)  pertaining to the
1992  Incentive  Stock  Option  Plan,  Registration  Statements  (Form  S-8  No.
333-16007,  Form S-8 No. 333-67477 and Form S-8 No. 333-67834) pertaining to the
1996  Stock  Option  Plan,  Registration  Statement  (Form  S-8  No.  333-42109)
pertaining to the Employee Stock Purchase Plan and Registration  Statement (Form
S-8 No. 333-67473) pertaining to the Richard C. Pfenniger, Jr. Stock Option Plan
of Whitman  Education Group, Inc. of our report dated May 29, 2002, with respect
to the  consolidated  financial  statements  of Whitman  Education  Group,  Inc.
included in this Annual Report (Form 10-K) for the year ended March 31, 2002.



                                                        /s/ ERNST & YOUNG LLP


Miami, Florida
June 7, 2002