This is a hard situation to give advice over the internet. Without seeing how the dog acts, how he interacts with your family and getting a background history we can only offer you very cursory advice. I really encourage you to seek advice from a behaviourist that has experience with shelties and only uses positive methods. If they mention anything about alpha and putting him in his place run a mile. I would also talk to your vet about medicating while you retrain his behaviours.
I don't like doggy bootcamps where you send your dog away for someone else to fix. They tend to use 'one size fits all' approach regardless of the underlying issues and it doesn’t give the owners the tools to manage the behaviour. They can worsen the problem for dogs that have anxiety issues.
Most often, Shelties who exhibit ‘aggression’ tend to have fear and/or anxiety problems. The exceptions would be a dog that has psychological problems – this is rare in shelties and something a vet behaviourist would need to diagnose. The other is if the dog is experiencing pain – such as from dysplasia or arthritis – or has another underlying health issue – such has thyroid problems. Again the vet should probably check him over to rule these out.
You said he growls, barks and jumps around, but he did well at obedience training. To me this sounds like an over excitable adolescent, a little uncertain of how to act. You need to teach him how to be calm and the sort of dog you want him to be. If he did okay at obedience then he can learn to be calm and take direction.
A few suggestions I can give you now.
· Is he crate trained? I really encourage you to crate train him if he isn’t already. He needs a quiet and safe place to go when he is over-excited. Crate time is also calm time and he needs some space away from your other dog too. 2 adolescent males dogs in the house (even tho desexed) will result in competition for attention, they need time apart so they aren’t always on the look out for what the other is doing.
· Over the next couple of weeks be calm around him. No silly play, no running around and getting excited. Talk to him in a calm voice and give clear commands. Give him a chance to learn how to be calm in a calm environment (I know that’s hard with a house full of kids).
· How do you play with him? Looking at the ages of your children I’m wondering if there is a bit of ‘rough housing’. Cut out all the rough play, and no play using your hands. This is a really common problem experienced by men and teenagers who raise a dog. They tend to use their hands to rough them and egg them on. The problem with this is dogs learn that hands are toys, and that’s a sure way to end up with a mistaken bite. Play should not involve hands, use toys instead and whenever he gets excited put a toy in his mouth. Squeaky toys are good for this, so he learns when he gets excited to put a toy in his mouth. Remember Shelties herd by nipping so they can be mouthy.
· Consider time outs when he gets too excited. Don’t make a noise about it, when he’s over excited or being naughty put him in a time out (a crate or another room) until he calms down.
· Stick to a routine with him. Dogs do well with routine, it provides them with certainty and helps lower anxiety levels.
· Get him to work for all his meals – put his kibble in a treat dispenser. Dogs enjoy this and it will allow him to use his mind and learn to focus on working.
· Is he getting walks? He needs stimulation outside the home, let him sniff the neighbourhood (when dogs sniff they are thinking and using their brain). Calm walks will get some of the energy he is exhibiting in the house.
Hope this helps. I suggest you start with talking to your vet though for a check up and ask about meds for a short period to help retrain. Then look for a good positive behaviourist.