SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

								July 27, 2005

Jeffrey E. Butler
President and CEO
The American Education Corporation
7506 N. Broadway Extension, Suite 505
Oklahoma City, Oklahoma 73116

RE: 	Schedule 13E-3
	Filed June 24, 2005
      File No. 5-54041

      Form 10-KSB for fiscal year ended December 31, 2004
      Form 10-QSB for the fiscal quarter ended March 31, 2005
      File No. 0-10873

Dear Mr. Butler:

      We have reviewed the filings referenced above and have the
following comments.  Where indicated, we think you should revise
your
documents in response to these comments.  If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary.  Please be as detailed as necessary in
your
explanation.  In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Schedule 13E-3
1. Please note also that you must include the information required
by
Items 3, 5, 6, 10 and 11 of Schedule 13E-3 with respect to each
executive officer and director of your corporation.  For example,
you
need to provide all of this information with respect to Mr.
Butler.
See General Instruction C to Schedule 13E-3.

2. We note your reliance on NRS section 78.207 to effect your
contemplated going private transaction without a stockholder vote.
However, in order to rely on this statute money may not be paid to
an
aggregate of more than 10% of the holders of your common stock.
According to your estimates approximately 6.5% of stockholders are
expected to be cashed-out, yet you provide no calculations of how
you
determined this number.  Please provide detailed calculations of
how
you came to this conclusion.  Please provide specific analysis for
both holders in "street name" and record holders of American
Education common stock.  Please also consider in your calculations
the various uncertainties that may affect the estimates provided
above; including changes in holdings that may occur between the
time
of your amended Schedule 13E-3 and the effectiveness of the
transaction.  For example, we note disclosure that stockholders
wishing to remain stockholders of the private entity may purchase
shares in advance of the effective date, combine separate
accounts,
or conversely lower their holdings to become part of the group
that
is cashed-out.   Please describe how these and other conditional
events may affect the final determinations and how they were
accounted for in your calculations requested above.

3. In the transaction you propose, is there a possibility that
more
than 10% of holders could be cashed-out?  If the ten percent
amount
can not be exceeded please explain why this is the case.  In your
response letter explain when and how you will learn the actual
number
of shares that you will repurchase as a result of the reverse
split.
If there is the possibility that the number of shares purchased
could
exceed the ten percent amount and you will not know the number of
shares purchased until after the reverse split is effected,
describe
the consequences of effecting share purchases in excess of the ten
percent amount without obtaining shareholder approval of the
transaction.
4. Please advise why you have listed the costs of cashing-out
stockholders at approximately $357,500 in "Source and Amount of
Funds
Section" section but stated that at the time of this filing an
estimated $457,000 would be required in your "Fairness of the
Transaction" section.   Please provide greater disclosure and
specific calculations on the specific cost of the cash-out
transaction.

5. We note that disclosure responsive to several item requirements
is
provided in the Schedule 13E-3 while other disclosure is provided
in
the disclosure statement.  Please confirm that you will mail the
Schedule 13E-3 to security holders together with the disclosure
statement.  Alternatively, please ensure that all disclosure
responsive to item requirements in the Schedule 13E-3 is included
in
the documents to be mailed to security holders.

Item 2.  Subject Company Information

6. We note that the information in the section of the Form 10-KSB
that you reference is provided as of March 10, 2005.  The
information
concerning the trading markets, price of your common stock and
dividends required by Item 1002 paragraphs (c) and (d) of
Regulation
M-A should be presented for each quarter during the past two
years.

7. With respect to the $300,000 loan to Mr. Butler, tell us
whether a
promissory note or other loan agreement existed with respect to
the
transaction.  Provide a copy of the note or any other written
documents relating to this arrangement.   If the indebtedness was
evidenced by a writing, tell us why that writing was not included
in
Item 16 of the Form 10-KSB for 2003 and filed with that or a prior
periodic filing.  See Item 601(b)(10)(i)(A) of Regulation S-B.
Tell
us when and how the parties to this loan arrangement had agreed
that
the loan to Mr. Butler could be repaid with shares of stock as
well
as when and how the parties agreed to the method of valuation for
shares Mr. Butler delivered in repayment of that loan.  Please
also
tell us exact date the shares were surrendered and the closing
price
of your common shares on each date discussed above.  Finally, tell
us
why you have characterized this transaction as a repurchase of
common
stock in the statement of changes in stockholders` equity in the
financial statements to the above-referenced Form 10-KSB.

Item 5. Past Contacts, Transactions...
8. Please advise to the relationship, if any, between Janis Butler
and Jeffrey Butler.

Item 6.  Purposes of the Transaction

9. Please revise to clarify, if true, that you have no plans or
negotiations that would result in the actions set forth in Item
1006(c)(1)-(8) of Regulation M-A other than those described in
your
response to this Item.  Note the Instruction to Item 6 of Schedule
13E-3.

Item 11.  Interest in Securities of the Subject Company
10. We note that the information in the section of the Form 10-KSB
that you reference is provided as of March 10, 2005.  The
information
concerning security ownership should be presented as of a more
recent
date that is as close as practicable to the mailing date of the
disclosure document.

Item 13. Financial Statements
Comparative Financial Information
Consolidated Statements of Income: For the years ended December
31,
2004 and 2003
11. We note that you have presented Learning Pathways, Ltd as a
discontinued operation in your interim financial statements for
the
period ending March 31, 2005.  This presentation must be applied
retroactively to all periods presented in this Schedule 13E-3.
That
is, the financial statements for the year ending December 31, 2004
and 2003 should be revised to disclose the discontinued
operations.

12. We note that the financial statements incorporated by
reference
do not include the ratio of earnings to fixed charges required by
Item 1010(a)(3) of Regulation M-A.  Please revise your disclosure
to
include that ratio.  Also, please include the pro forma financial
statements required by Item 1010(b) of Regulation M-A or tell us
your
basis for not including them.

Item 14.  Persons/Assets, Retained ...
13. Provide the disclosure required by Item 1009(b) of Regulation
M-A
with respect to employees used by the Board of Directors in
connection with the transaction.

Item 16.  Exhibits

14. Given that you may use proceeds from a line of credit to pay
for
the securities cashed out in this transaction, please file the
related loan agreement.  See Item 1016(b) of Regulation M-A.

Exhibit A. Disclosure Statement
Outside Front Cover
15. Please confirm that the legend required by Rule 13e-
3(e)(1)(iii)
will be on the front cover of the documents mailed to
stockholders.
16. You state that the board concluded that the proposed
transaction
is in the best interests of the stockholders.  Consistent with the
text in the body of the disclosure document, please indicate that
American Education, concluded that the transaction is fair to the
unaffiliated stockholders.  Also, provide the conclusions of any
other affiliates engaging in the transaction as to the fairness to
unaffiliated stockholders.
17. In the second paragraph you state that the directors
authorized
"extensive" internal analysis and assert that the analysis is
"consistent with currently accepted valuation techniques."  Please
provide us with detailed support for each of these claims.  The
information you provide in the body of the disclosure document
with
respect to these matters is not sufficient to support either of
the
claims.  Additionally, it will be very difficult to provide
adequate
support and background information on the first page of your
filing
to put these claims in context for investors.  Accordingly, please
consider eliminating these claims from the first page of the
document.

Summary Term Sheet
18. Please expand to provide summarized information about the
range
of prices at which your shares have traded during the past 12
months.
Also please disclose the volume of the trading during that period,
to
the extent you can obtain that information.
19. You indicate that the board authorized "extensive internal
analysis" of the transaction.  Provide us a copy of this analysis.
On what basis do you conclude that the analysis is "consistent
with
currently accepted valuation techniques?"  Provide adequate
support
for this claim in the summary that is concise disclosure that as
required by the Plain English requirements applicable to this
section.

Cautionary Statement Regarding Forward Looking Statements
20. We note your reference to the Private Securities Litigation
Reform Act of 1995 in this subsection.  The safe harbor for
forward
looking statements provided in the Reform Act does not apply to
statements made in connection with a going private transaction.
See
Section 21E(b)(1)(E) of the Securities Exchange Act of 1934.
Revise
to delete the reference to the Reform Act, or revise to state
explicitly that the safe harbor provisions do not apply in the
context of this transaction.

Introduction
Company Securities
21. Please provide the outstanding share information as of a more
recent practicable date.  See Item 1002(b) of Regulation M-A.

Special Factors

22. The information required by Items 7, 8 and 9 of Schedule 13E-3
must appear in a "Special Factors" section to the front of the
proxy
statement, following the Summary section.  See Rule 13e-
3(e)(1)(ii).
Please revise the disclosure statement to relocate this
information.

Reasons for the Transaction
23. Disclose who first proposed the possibility of going private
and
the date on which this occurred.  Were alternatives to going
private
proposed or considered?  Discuss the steps that were taken
considering the possibility of going private or exploring other
alternatives.  Describe when and how proposals were presented, who
considered the proposals and the steps taken in analyzing the
proposals.  What events led to the proposal that a reverse split
should be implemented and the determination that that method would
be
used?  The process whereby the reverse split ratio was selected
and
the cash-out price was established should be described in
reasonable
detail.  In responding to this comment please use specific dates,
identify the persons who made or received proposals, and describe
the
actions taken.  See Item 1013(c) of Regulation M-A.  In responding
please clarify what, if any, role Messrs. Garber and Schoolfield
played in the structuring the transaction.  Please also provide a
description of all meetings, negotiations, contacts, etc. among
Board
members, management, Messrs Garber and Schoolfield, and third
parties
that led up to the proposed transaction.

24. Please provide us with supplemental copies of any materials
prepared by any third party to American Education that may have
bearing on the board`s fairness determination or is related to
this
transaction.  See Item 1015 of Regulation M-A.  Please include any
"board books," presentations on any related financing and any
summaries of presentations made to your board of directors.  All
such
materials must be summarized in the disclosure document and (if
written) filed as an exhibit to the Schedule 13E-3.  In addition,
each presentation, discussion, or report held with or presented,
whether oral or written, preliminary or final, is a separate
report
that requires a reasonably detailed description meeting the
requirements of Item 1015 of Regulation M-A.
25. Given that several of the factors you list as contributing to
the
decision to take the company private appear to have existed for at
least one year, such as the company`s ability to reduce
information
available to its competitors, the cost savings from not having to
comply with our filing requirements, and the lack of a liquid
market
for your securities, revise to indicate why the Board of Directors
is
undertaking the going private transaction at this time as opposed
to
other times in the company`s operating history.  Disclose also if
any
other factors, such as the seasonality of your business as
disclosed
in your Form 10-K or the recent financing with Mr. Smith had any
effect on the timing of your determination.  Refer to Item 1013(c)
of
Regulation M-A.
26. Please expand your reference to Section 404 of the Sarbanes-
Oxley
Act to discuss the requirements of Section 404 more thoroughly.
Please also disclose who provided the $300,000 estimate regarding
the
costs of Section 404 compliance.  Finally, advise us of any known
or
probable compliance problems with respect to Section 404.
27. Please disclose the basis of your estimate of $50,000 in costs
per year associated with continuing as a public company.
28. Please also disclose the information you will be providing to
the
remaining stockholders of American Education after the proposed
transaction.  For example, disclose if you will be providing
audited
financials statements, other disclosure documents or will be
engaging
in investor relations after taking the company private.  Discuss
the
requirement of your articles of incorporation with respect to the
frequency of stockholder`s meetings and management`s plan
concerning
future stockholder`s meetings.  Please advise as to the
consideration
given to the comparing the costs of operating as a private company
as
opposed to a public company.

Factors Considered by the Board of Directors
29. We note the board of directors considered the factors listed
in
this section to support its conclusion as to the fairness of the
reverse stock split.  Revise your document to ensure that you have
provided a reasonably detailed discussion of each material factor
forming the basis for each party`s fairness determination in
accordance with Item 1014(b) of Regulation M-A.  A listing of the
factors considered, without a discussion of how that factor
relates
to the determination that the transaction is fair to the
unaffiliated
stockholders, is inadequate.  See instruction 3 to Item 1014 of
Regulation M-A.  For example, explain how the valuation of your
stock
and that of companies in your industry over the past three years
favors your fairness determination.

30. Because the transaction will have different effects on
different
groups of unaffiliated security holders, please revise the
document
to clarify that each filing person has provided a procedural and
substantive fairness determi