
<PAGE>
 
                                                                   EXHIBIT 10.12



                                    FORM OF
                                    -------             
                           INDEMNIFICATION AGREEMENT
                           -------------------------


     THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into as of this
___ day of _______________, 1997, by and between CAREER EDUCATION CORPORATION, a
Delaware corporation (the "Corporation"), and _________________ ("Indemnitee").

                                   RECITALS
                                   --------

     A.  The Corporation is aware that because of the increased exposure to
litigation costs and risks resulting from service to corporations, talented and
experienced persons are increasingly reluctant to serve or continue serving as
directors or executive officers of corporations unless they are protected by
comprehensive liability insurance and indemnification;

     B.  Plaintiffs often seek damages in such large amounts, and the costs of
litigation may be so great (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is usually beyond the personal
resources of directors and executive officers;

     C.  Based upon their experience as business managers, the Board of
Directors of the Corporation (the "Board") has concluded that, to retain and
attract talented and experienced individuals to serve as directors and executive
officers of the Corporation, it is appropriate for the Corporation to
contractually indemnify its directors and certain of its executive officers, and
to assume for itself liability for expenses and damages in connection with
claims against such directors and executive officers in connection with their
service to the Corporation; and

     D.  The Corporation believes that it is fair and proper to protect its
directors and certain executive officers of the Corporation from the risk of
judgments, settlements and other expenses which may occur as a result of their
service to the Corporation.

     NOW, THEREFORE, the parties, intending to be legally bound, for good and
valuable consideration, hereby agree as follows:

     1.  Definitions.
         ----------- 

          (a) Agent.  "Agent" means a director or executive officer of the
     Corporation or a director or executive officer of another foreign or
     domestic corporation, partnership, joint venture, trust or other enterprise
     serving at the request, for the convenience, or to represent the interests
     of the Corporation.

          (b) Corporation.  "Corporation" means Career Education Corporation, a
     Delaware corporation, its successors or assigns, or any Subsidiary of the
     Corporation.  "Subsidiary" means, and "Subsidiaries" include, (i) any
     company of which more than
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     fifty percent (50%) of the outstanding voting securities are owned directly
     or indirectly by the Corporation, or which is otherwise controlled by the
     Corporation, and (ii) any partnership, joint venture, trust or other entity
     of which more than fifty percent (50%) of the equity interest is owned
     directly or indirectly by the Corporation, or which is otherwise controlled
     by the Corporation.

          (c) Liabilities.  "Liabilities" means losses, claims, damages,
     liabilities, obligations, penalties, judgments, fines, settlement payments,
     awards, costs, expenses and disbursements (and any and all costs, expenses
     or disbursements in giving testimony or furnishing documents in response to
     a subpoena or otherwise), including, without limitation, all reasonable
     attorneys' fees, costs, expenses and disbursements, as and when incurred.

          (d) Proceeding.  "Proceeding" means any threatened, pending, or
     completed action, suit or other proceeding, whether civil, criminal,
     administrative, investigative or any other type whatsoever.

          (e)  Control.  "Control" means, with respect to any person or entity,
     the possession, direct or indirect, of the power to direct or cause the
     direction of the management and policies of such person or entity, whether
     through the ownership of voting securities, by contract or otherwise.

     2.   Maintenance of Liability Insurance.
          ---------------------------------- 

          The Corporation hereby covenants and agrees to and with Indemnitee
     that, so long as Indemnitee shall continue to serve as an Agent and
     thereafter so long as Indemnitee shall be subject to any claim or
     Proceeding by reason of the fact that Indemnitee was an Agent or in
     connection with Indemnitee's acts as such an Agent, the Corporation,
     subject to Section 2(b), shall obtain and maintain in full force and effect
     directors' and officers' liability insurance ("D&O Insurance") in
     reasonable amounts from established and reputable insurers.  In all
     policies of D&O Insurance, Indemnitee shall be named as an insured.

     3.   Indemnification of Agent.
          ------------------------ 

          (a)  Third Party Actions.  If Indemnitee is a person who was or is a
     party or is threatened to be made a party to any Proceeding (other than an
     action by or in the right of the Corporation) by reason of the fact that
     Indemnitee is or was an Agent of the Corporation, or by reason of anything
     done or not done by Indemnitee in any such capacity or otherwise at the
     request of the Corporation or of its officers, directors or stockholders,
     the Corporation shall indemnify, defend and hold harmless Indemnitee
     against any and all Liabilities actually and reasonably incurred by
     Indemnitee in connection with the investigation, defense, settlement or
     appeal of such Proceeding, so long as Indemnitee acted in good faith and in
     a manner Indemnitee reasonably believed to be in, or not opposed to, the
     best interests of the Corporation, and, with respect to any criminal action
     or Proceeding, if Indemnitee had no reasonable cause to believe his conduct
     was unlawful.

                                      -2-
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          (b)  Derivative Actions. If Indemnitee is a person who was or is a
     party, or is threatened to be made a party, to any Proceeding by or in the
     right of the Corporation to procure a judgment in its favor by reason of
     the fact that Indemnitee is or was an Agent of the Corporation, or by
     reason of anything done or not done by Indemnitee in any such capacity or
     otherwise at the request of the Corporation or of its officers, directors
     or stockholders, the Corporation shall indemnify, defend and hold harmless
     Indemnitee against all Liabilities actually and reasonably incurred by such
     person in connection with the investigation, defense, settlement or appeal
     of such Proceeding, if Indemnitee acted in good faith and in a manner
     Indemnitee reasonably believed to be in or not opposed to the best
     interests of the Corporation; provided, however, that no indemnification
     under this Section 3(b) shall be made in respect of any claim, issue or
     matter for which such person is adjudged to be liable for gross negligence
     or willful misconduct in the performance of Indemnitee's duties to the
     Corporation, unless, and only to the extent that, the court in which such
     Proceeding was brought shall determine upon application that, despite the
     adjudication of liability, but in view of all the circumstances of the
     case, Indemnitee is fairly and reasonably entitled to indemnity for such
     Liabilities as the court shall deem proper.

          (c)  Actions Where Indemnitee Is Deceased.  If Indemnitee is a person
     who was or is a party or is threatened to be made a party to any Proceeding
     by reason of the fact that he is or was an Agent of the Corporation, or by
     reason of anything done or not done by Indemnitee in any such capacity, and
     prior to, during the pendency of, or after completion of, such Proceeding,
     Indemnitee shall die, then the Corporation shall indemnify, defend and hold
     harmless the estate, heirs and legatees of Indemnitee against any and all
     Liabilities incurred by such estate, heirs or legatees in connection with
     the investigation, defense, settlement or appeal of such Proceeding on the
     same basis as provided for Indemnitee in Sections 3(a) and 3(b) above.

          (d)  Reduction of Liabilities. The Liabilities covered hereby shall be
     net of any payments to or on behalf of Indemnitee by D&O Insurance carriers
     or others with respect to the subject Proceeding.

     4.  Indemnification as Witness.  Notwithstanding any other provision of
     this Agreement, to the extent Indemnitee is, by reason of the fact that
     Indemnitee is or was an Agent of the Corporation, involved in any
     investigative Proceeding, including, but not limited to, testifying as a
     witness or furnishing documents in response to a subpoena or otherwise,
     Indemnitee shall be indemnified against any and all Liabilities actually
     and reasonably incurred by or for Indemnitee in connection therewith.

     5.  Advancement of Liabilities.  Subject to the provisions of Section 6(c),
     until a determination that Indemnitee is not entitled to be indemnified by
     the Corporation under the terms hereof, and unless the provisions of
     Section 9 apply, the Corporation shall reimburse Indemnitee for Liabilities
     previously paid by Indemnitee and may advance Liabilities which the
     Corporation reasonably determines will be due and payable by Indemnitee
     within a reasonable time after a request for advancement is made by
     Indemnitee.  The execution and delivery of this Agreement by the
     Corporation evidences the specific approval by the Board of the
     reimbursement and advancement of Liabilities

                                      -3-
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     as provided for in this Section 5.  As a condition to such reimbursement
     and/or advancement, Indemnitee shall, at the request of the Corporation,
     undertake in a manner satisfactory to the Corporation to repay such amounts
     reimbursed and/or advanced, without interest, if it shall ultimately be
     determined pursuant to Section 7 or 9 below that Indemnitee is not entitled
     to be indemnified by the Corporation under the terms of this Agreement.
     Subject to the foregoing, the reimbursement and/or advances to be made
     hereunder shall be paid by the Corporation to Indemnitee within twenty (20)
     business days following delivery of a written request by Indemnitee to the
     Corporation, which request shall be accompanied by vouchers, invoices and
     similar evidence documenting the amounts incurred or to be incurred by
     Indemnitee.

     6.   Indemnification Procedures.
          -------------------------- 

          (a) Notice by Indemnitee.  Promptly after receipt by Indemnitee of
     notice of the commencement or threat of commencement of any Proceeding,
     Indemnitee shall, if Indemnitee believes that indemnification with respect
     thereto may be sought from the Corporation under this Agreement, notify the
     Corporation of the commencement or threat of commencement thereof, provided
     that any failure to so notify the Corporation shall not relieve the
     Corporation of its obligations hereunder, except to the extent that such
     failure or delay increases the liability of the Corporation hereunder.

          (b) D & O Insurance.  If, at the time of receipt of a notice pursuant
     to Section 6(a) above, the Corporation has D&O Insurance in effect, the
     Corporation shall give prompt notice of the Proceeding or claim to its
     insurers in accordance with the procedures set forth in the applicable
     policies.  The Corporation shall thereafter take all necessary or desirable
     action to cause such insurers to pay all amounts payable as a result of
     such Proceeding in accordance with the terms of such policies, and
     Indemnitee shall not take any action (by waiver, settlement or otherwise)
     which would adversely affect the ability of the Corporation to obtain
     payment from its insurers.

          (c) Assumption of Defense.  In the event the Corporation shall be
     obligated under this Agreement to pay the Liabilities of Indemnitee, the
     Corporation shall be entitled to assume the defense (with counsel
     reasonably acceptable to Indemnitee, approval thereof not to be
     unreasonably withheld) of the Proceeding to which the Liabilities relate.
     The Corporation agrees to promptly notify Indemnitee upon its election to
     assume such defense.  Once the Corporation (i) provides Indemnitee with
     notice of its election to assume such defense and (ii) obtains approval
     from Indemnitee of the counsel retained, the Corporation will not be liable
     to Indemnitee under this Agreement for any attorney's fees or other
     Liabilities subsequently incurred by Indemnitee with respect to such
     Proceeding, unless (x) the Liabilities incurred by Indemnitee were
     previously authorized by the Corporation or (y) counsel for Indemnitee
     shall have provided the Corporation with an opinion of counsel stating that
     there is a likelihood that a conflict of interest exists between the
     Corporation and Indemnitee in the conduct of any such defense.

                                      -4-
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     7.   Determination of Right to Indemnification.
          ----------------------------------------- 

          (a) Successful Proceeding.  To the extent Indemnitee has been
     successful, on the merits or otherwise, in the defense of any Proceeding
     referred to in Sections 3(a) or 3(b) above, the Corporation shall indemnify
     Indemnitee against all Liabilities incurred by him in connection therewith.
     If Indemnitee is not wholly successful in such Proceeding, but is
     successful, on the merits or otherwise, as to one or more but less than all
     claims, issues or matters in such Proceeding, then the Corporation shall
     indemnify Indemnitee against all Liabilities actually or reasonably
     incurred by or for him in connection with each successfully resolved claim,
     issue or matter.  For purposes of this Section 7(a), and without
     limitation, the termination of any Proceeding, or any claim, issue or
     matter in such a Proceeding, by dismissal, with or without prejudice, shall
     be deemed to be a successful result as to such Proceeding, claim, issue or
     matter, so long as there has been no finding (either adjudicated or
     pursuant to Section 7(c) below) that Indemnitee (i) did not act in good
     faith, (ii) did not act in a manner reasonably believed to be in, or not
     opposed to, the best interests of the Corporation, or (iii) with respect to
     any criminal proceeding, had reasonable grounds to believe his conduct was
     unlawful.

          (b) Other Proceedings.  In the event that Section 7(a) above is
     inapplicable, the Corporation shall nevertheless indemnify Indemnitee,
     unless and only to the extent that the forum listed in Section 7(c) below
     determines that Indemnitee has not met the applicable standard of conduct
     set forth in Sections 3(a) or 3(b) above required to entitle Indemnitee to
     such indemnification.

          (c) Forum in Event of Dispute.  The determination that indemnification
     of Indemnitee is proper in the circumstances because Indemnitee has met the
     applicable standard of conduct set forth in Sections 3(a) or 3(b) shall be
     made (i) by the Board, by a majority vote of the directors who are not
     parties to such Proceeding, even though less than a quorum or (ii) by a
     committee of such disinterested directors designated by a majority of such
     disinterested directors, even though less than a quorum, or (iii) if there
     are no such disinterested directors, or if such disinterested directors
     shall so direct, by independent legal counsel in a written opinion, or (iv)
     by the stockholders of the Corporation.  The choice of which forum shall
     make the determination shall be made by the Board.  The forum shall act in
     the utmost good faith to assure Indemnitee a complete opportunity to
     present to the forum Indemnitee's case that Indemnitee has met the
     applicable standard of conduct.

          (d) Appeal to Court.  Notwithstanding a determination by any forum
     listed in Section 7(c) above that Indemnitee is not entitled to
     indemnification with respect to a specific Proceeding, Indemnitee shall
     have the right to apply to the court in which that Proceeding is or was
     pending or any other court of competent jurisdiction for the purpose of
     enforcing Indemnitee's right to indemnification pursuant to this Agreement.

          (e) Indemnity for Liabilities in Enforcement of Agreement.
     Notwithstanding any other provision in this Agreement to the contrary, the
     Corporation shall indemnify Indemnitee against all Liabilities incurred by
     Indemnitee in connection with any other Proceeding between the Corporation
     and Indemnitee involving the

                                      -5-
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     interpretation or enforcement of the rights of Indemnitee under this
     Agreement, unless a court of competent jurisdiction finds that the material
     claims and/or defenses of Indemnitee in any such Proceeding were frivolous
     or made in bad faith.

     8.  Contribution.  If and to the extent that a final adjudication shall
     specify that the Corporation is not obligated to indemnify Indemnitee under
     this Agreement for any reason (including but not limited to the exclusion
     set forth in Section 9 hereof), then in respect of any Proceeding in which
     the Corporation is jointly liable with Indemnitee (or would be so liable if
     joined in such action, suit or proceeding), the Corporation shall
     contribute to the amount of Liabilities reasonably incurred and paid or
     payable by Indemnitee in connection with such Proceeding in such proportion
     as is appropriate to reflect (i) the relative benefits received by the
     Corporation, on the one hand, and Indemnitee, on the other hand, from the
     transaction with respect to which such Proceeding arose, and (ii) the
     relative fault of the Corporation, on the one hand, and Indemnitee, on the
     other hand in connection with the circumstances which resulted in such
     Liabilities, as well as any other relevant equitable considerations.  The
     relative fault of the Corporation, on the one hand, and Indemnitee, on the
     other hand, shall be determined by reference to, among other things, the
     parties' relative intent, knowledge, access to information and opportunity
     to correct or prevent the circumstances resulting in such Liabilities.  The
     Corporation agrees that it would not be just and equitable if contribution
     pursuant to this Section 8 were determined by pro rata allocation or any
     other method of allocation which does not take account of the foregoing
     equitable considerations.

     9.   Exceptions.

          (a) Claims Initiated by Indemnitee.  Notwithstanding any other
     provision herein to the contrary, the Corporation shall not be obligated
     pursuant to the terms of this Agreement to indemnify or advance Liabilities
     to Indemnitee with respect to Proceedings or claims initiated or brought
     voluntarily by Indemnitee and not by way of defense, except with respect to
     Proceedings brought to establish or enforce a right to indemnification
     under this Agreement, but such indemnification or advancement of expenses
     may be provided by the Corporation in specific cases if the Board finds it
     to be appropriate.

          (b) Unauthorized Settlements.  Notwithstanding any other provision
     herein to the contrary, the Corporation shall not be obligated pursuant to
     the terms of this Agreement to indemnify Indemnitee under this Agreement
     for any amount paid in settlement of a Proceeding without the prior written
     consent of the Corporation to such settlement.

          (c) No Duplicative Payment.  The Corporation shall not be liable under
     this Agreement to make any payment of amounts otherwise indemnifiable
     hereunder if and to the extent that Indemnitee has otherwise actually
     received such payment under any insurance policy, contract, agreement or
     otherwise.

                                      -6-
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     10. Certificate of Incorporation and By-laws.  The Corporation agrees that
     the Certificate of Incorporation and By-laws of the Corporation in effect
     on the date hereof shall not be amended to reduce, limit, hinder or delay
     (a) the rights of Indemnitee granted hereby, or (b) the ability of the
     Corporation to indemnify Indemnitee as required hereby.  The Corporation
     further agrees that it shall exercise the powers granted to it under its
     Certificate of Incorporation and By-laws and by applicable law to indemnify
     any Indemnitee to the fullest extent possible as required hereby.

     11.  Non-exclusivity.  The provisions for indemnification and advancement
     of Liabilities set forth in this Agreement shall not be deemed exclusive of
     any other rights which Indemnitee may have under any provision of law, the
     Corporation's Certificate of Incorporation or By-laws, the vote of the
     Corporation's stockholders or disinterested directors, other agreements or
     otherwise.

     12.  Interpretation of Agreement.  It is understood that the parties hereto
     intend this Agreement to be interpreted and enforced so as to provide
     indemnification to Indemnitee to the fullest extent now or hereafter
     permitted by law.

     13.  Severability.  If any provision or provisions of this Agreement shall
     be held to be invalid, illegal or unenforceable for any reason whatsoever,
     (a) the validity, legality and enforceability of the remaining provisions
     of the Agreement (including, without limitation, all portions of any
     paragraphs of this Agreement containing any such provision held to be
     invalid, illegal or unenforceable) shall not in any way be effected or
     impaired thereby, and (b) to the fullest extent possible, the  provisions
     of this Agreement (including, without limitation, all portions of any
     paragraph of this Agreement containing any such provision held to be
     invalid, illegal, or unenforceable that are not themselves invalid,
     illegal, or unenforceable) shall be construed so as to give effect to the
     intent manifested by the provision held invalid, illegal or unenforceable
     and to give effect to Section 12 hereof.

     14.  Modification and Waiver.  No supplement, modification or amendment to
     this Agreement shall be binding unless executed in writing by both of the
     parties hereto.  No waiver of any of the provisions of this Agreement shall
     be deemed, or shall constitute, a waiver of any other provisions hereof
     (whether or not similar), nor shall such waiver constitute a continuing
     waiver.

     15.  Subrogation.  In the event that the Corporation makes any payment
     under this Agreement, the Corporation shall be subrogated to the extent of
     such payment to all of the rights of recovery of Indemnitee, who shall
     execute all papers and do all things that may be necessary to secure such
     rights, including but not limited to the execution of such documents as
     shall be necessary to enable the Company effectively to bring suit to
     enforce such rights.
                                            
     16.  Survival, Successors, and Assigns.  Indemnitee's rights under this
     Agreement shall continue after Indemnitee has ceased acting as an Agent of
     the Corporation.  The terms of this Agreement shall be binding on and inure
     to the benefit of the Corporation

                                      -7-
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     and its successors and assigns and shall be binding on and inure to the
     benefit of Indemnitee and Indemnitee's heirs, executors and administrators.

     17.  Notices.  All notices, demands, consents, requests, approvals and
     other communications between the parties pursuant to this Agreement must be
     in writing and will be deemed given when delivered in person, one (1)
     business day after being dispatched by a nationally recognized overnight
     courier service, three (3) business days after being deposited in the U.S.
     Mail, registered or certified mail, return receipt requested, or one (1)
     business after being sent by facsimile (with receipt acknowledged), to the
     Corporation at the address of its principal office in Hoffman Estates,
     Illinois and to Indemnitee at Indemnitee's address as shown on the
     Corporation's records.  Indemnitee may change Indemnitee's address for
     notice purposes by delivering notice to the Corporation in accordance with
     this Section 17.  All notices sent to the Corporation shall also be
     delivered to Katten Muchin & Zavis, 525 West Monroe Street, Suite 1600,
     Chicago, Illinois 60661-3693, Attention: Mark D. Wood, Esq., Facsimile No.
     (312-902-1061).
                       
     18.  Governing Law.  This Agreement shall be governed exclusively by and
     construed according to the laws of the State of Illinois, without regard to
     its principles of conflicts of laws.

     19.  Counterparts.  This agreement may be executed in counterparts, each of
     which when so executed and delivered shall be deemed an original, and such
     counterparts together shall constitute one instrument.

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     The parties hereto have entered into this Indemnification Agreement
effective as of the date first above written.


                            CAREER EDUCATION CORPORATION


                            By:
                               -----------------------------------

                               Name:
                                    ------------------------------

                               Its:
                                    ------------------------------


                            INDEMNITEE:


 
                            ---------------------------------------
                            (Sign Name)


 
                            ---------------------------------------
                            (Print Name)


 

                            ---------------------------------------
 
                            ---------------------------------------
                            (Print Address)

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