425

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report: November 1, 2017

Capella Education Company

(Exact name of Registrant as specified in its charter)

Minnesota	001-33140	41-1717955
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

225 South 6^th Street, 9^th Floor, Minneapolis, Minnesota 55402

(Address of principal executive offices, including zip code)

(888) 227-3352

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☒ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 7.01. Regulation FD Disclosure

In response to inquiries from investors about that certain Agreement and Plan of Merger, dated October 29, 2017, by and among Capella Education Company, a Minnesota corporation (“Capella”), Strayer Education, Inc., a Maryland corporation (“Strayer”), and Sarg Sub Inc., a Minnesota corporation and wholly owned subsidiary of Strayer, Capella confirms that each of Strayer and Capella is permitted to continue paying its ordinary course quarterly dividend to holders of Strayer common stock and Capella common stock, as the case may be, prior to the closing of the merger between Capella and Strayer.

Item 8.01. Other Events

On November 1, 2017, Capella provided information regarding Capella in connection with presentations to investors. A copy of the slides made available in connection with the presentations is attached as Exhibit 99.1 hereto.

Forward Looking Statements

This communication, in addition to historical information, contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of Strayer Education Inc., a Maryland corporation (“Strayer”) and Capella Education Company, a Minnesota corporation (“Capella”). Words such as “anticipate,” “expect,” “project,” “intend,” “believe,” and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. Forward-looking statements relating to the proposed transaction include, but are not limited to: statements about the benefits of the proposed transaction between Strayer and Capella, including future financial and operating results; Strayer’s and Capella’s plans, objectives, expectations and intentions; the expected timing of completion of the proposed transaction; and other statements relating to the acquisition that are not historical facts. Forward-looking statements are based on information currently available to Strayer and Capella and involve estimates, expectations and projections. Investors are cautioned that all such forward-looking statements are subject to risks and uncertainties, and important factors could cause actual events or results to differ materially from those indicated by such forward-looking statements. With respect to the proposed transaction between Strayer and Capella, these factors could include, but are not limited to: the risk that Strayer or Capella may be unable to obtain governmental and regulatory approvals required for the transaction, or that required governmental and regulatory approvals may delay the transaction or result in the imposition of conditions that could reduce the anticipated benefits from the proposed transaction or cause the parties to abandon the proposed transaction; the risk that a condition to closing of the transaction may not be satisfied; the length of time necessary to consummate the proposed transaction, which may be longer than anticipated for various reasons; the risk that the businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the proposed transaction may not be fully realized or may take longer to realize than expected; the diversion of management time on transaction-related issues; the effect of future regulatory or legislative actions on the companies or the industries in which they operate; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; economic and foreign exchange rate volatility; the continued strength of the post-secondary and proprietary education markets; unexpected changes relating to competitive factors in the post-secondary and proprietary education industries; the timing, success and market reception for Strayer and Capella’s new and existing educational services and related products; the possibility of new technologies outdating Strayer’s or Capella’s services or products; the outcomes of any litigation; continued support of Strayer’s or Capella’s services or products by influential educational professionals; changes in the general economic environment, or social or political conditions, that could affect the businesses; the potential impact of the announcement or consummation of the proposed transaction on relationships with learners, suppliers, competitors, management and other employees; the ability to attract new learners and retain existing learners in the manner anticipated; the ability to hire and retain key personnel; reliance on and integration of information technology systems; the risks associated with assumptions the parties make in connection with the parties’ critical accounting estimates and legal proceedings; and the potential of international unrest, economic downturn or effects of currencies, tax assessments, tax adjustments, anticipated tax rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs.

Additional information concerning other risk factors is also contained in Strayer’s and Capella’s most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other SEC filings.

Many of these risks, uncertainties and assumptions are beyond Strayer’s or Capella’s ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the information currently available to the parties on the date they are made, and neither Strayer nor Capella undertakes any obligation to update publicly or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this communication. Nothing in this communication is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Strayer share or Capella share for the current or any future financial years or those of the combined company, will necessarily match or exceed the historical published earnings per Strayer share or Capella share, as applicable. Neither Strayer nor Capella gives any assurance (1) that either Strayer or Capella will achieve its expectations, or (2) concerning any result or the timing thereof, in each case, with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, consent decree, cost reductions, business strategies, earnings or revenue trends or future financial results. All subsequent written and oral forward-looking statements concerning Strayer, Capella, the proposed transaction, the combined company or other matters and attributable to Strayer or Capella or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

Additional Information And Where To Find It

This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction between Strayer and Capella or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The proposed business combination transaction between Strayer and Capella will be submitted to the respective stockholders of Strayer and Capella for their consideration. Strayer will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that will include a joint proxy statement of Strayer and Capella that also constitutes a prospectus of Strayer. Strayer and Capella will deliver the joint proxy statement/prospectus to their respective stockholders as required by applicable law. Strayer and Capella also plan to file other documents with the SEC regarding the proposed transaction. This communication is not a substitute for any prospectus, proxy statement or any other document which Strayer or Capella may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF STRAYER AND CAPELLA ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT STRAYER, CAPELLA, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and stockholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about Strayer and Capella, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Strayer and Capella make available free of charge at www.capellaeducationcompany.com and www.strayereducation.com, respectively (in the “Investor Relations” section), copies of materials they file with, or furnish to, the SEC.

Participants In The Merger Solicitation

Strayer, Capella, and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Strayer and Capella in connection with the proposed transaction. Information about the directors and executive officers of Capella is set forth in its proxy statement for its 2017 annual meeting of stockholders, which was filed with the SEC on March 23, 2017. Information about the directors and executive officers of Strayer is set forth in its proxy statement for its 2017 annual meeting of stockholders, which was filed with the SEC on March 16, 2017. These documents can be obtained free of charge from the sources indicated above. Other information regarding those persons who are, under the rules of the SEC, participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

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Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description of Exhibit
99.1	Investor Presentation Slides, dated November 1, 2017

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SIGNATURES

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

	CAPELLA EDUCATION COMPANY
	By:	/s/ Renee L. Jackson
Date: November 1, 2017		Renee L. Jackson
		Senior Vice President and General Counsel

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EX-99.1

EXHIBIT 99.1

Building Capella’s Strong Position November 2017

This communication contains certain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “will,” “forecast,” “outlook,” “plan,” “project,” or similar words and may include statements with respect to, among other things, the proposed merger of a wholly-owned subsidiary of Strayer with and into Capella, including the expected timing of completion of the merger; the anticipated benefits of the merger, including estimated synergies; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts. The statements are based on Strayer’s and Capella’s current expectations and are subject to a number of assumptions, uncertainties and risks. In connection with the safe-harbor provisions of the Reform Act, Strayer and Capella have identified important factors that could cause Strayer’s or Capella’s actual results to differ materially from those expressed in or implied by such statements. The assumptions, uncertainties and risks include: the risk that the merger may not be completed in a timely manner or at all due to the failure to obtain the approval of Strayer’s or Capella’s stockholders or the failure to satisfy other conditions (including obtaining required regulatory and educational agency approvals) to completion of the merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the outcome of any legal proceeding that may be instituted against Strayer, Capella and others following the announcement of the merger; the amount of the costs, fees, expenses and charges related to the merger; the risk that the benefits of the merger, including expected synergies, may not be fully realized or may take longer to realize than expected; the risk that the merger may not advance the combined company’s business strategy and growth strategy; the risk that the combined company may experience difficulty integrating Strayer’s and Capella’s employees or operations; the potential diversion of Strayer’s and Capella’s management’s attention resulting from the proposed merger; and other risks and uncertainties identified in Strayer’s and Capella’s filings with the Securities and Exchange Commission. Actual results may differ materially from those projected in the forward-looking statements. Strayer and Capella undertake no obligation to update or revise forward-looking statements.

Additional Information and Where to Find It Investors and security holders are urged to carefully review and consider each of Strayer’s and Capella’s public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by Strayer with the SEC may be obtained free of charge at Strayer’s website at www.strayereducation.com, in the “Investor Relations” tab at the top of the page, or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Strayer by requesting them in writing to 2303 Dulles Station Boulevard, Herndon, VA 20171. The documents filed by Capella with the SEC may be obtained free of charge at Capella’s website at www.capellaeducation.com, in the “Investor Relations” tab at the top of the page, or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Capella by requesting them in writing to 225 South 6th Street, 9th Floor, Minneapolis, Minnesota 55402. In connection with the proposed transaction, Strayer intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Strayer and Capella and a prospectus of Strayer, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF STRAYER AND CAPELLA ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the stockholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from Strayer or Capella as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.

Certain Information Regarding Participants Strayer, Capella and their respective directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about Strayer’s directors and executive officers in its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 16, 2017, and in other documents filed with the SEC by Strayer and its directors and executive officers. You can find information about Capella’s directors and executive officers in its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 23, 2017, and in other documents filed with the SEC by Capella and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC, if any, when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from Strayer or Capella as described above. No Offer or Solicitations This document shall not constitute an offer to sell or buy or the solicitation of an offer to buy or sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933.

Why Invest in Capella • Reputation for academic quality • Track record of regulatory compliance • Proprietary competency -based learning model and direct assessment capabilities • Growth through innovation and extending into job-ready skills markets – Job-ready skill development in high-demand areas – Software development/coding boot camps Positioned for Shareholder Value Creation 3

Returning Value to Shareholders (Continuing operations) FY 2014 FY 2015 FY 2016 Earnings per diluted share $3.34 $3.55 $3.58 1 Dividends paid per share $1.40 $1.48 $1.56 Shares repurchased 282,192 485,146 489,133 Total 3-year shareholder return 2 119% 73% 43% 1 Includes 12 cents after-tax transaction -related costs and purchase accounting related items due to the acquisition of Hackbright and DevMountain in Q2 ’16 2 Base period starting on Dec. 31; 3 years prior to column indicated FY-end 4

Strategic Focus Offering the most direct path between learning and employment Post-Secondary Job-Ready Skills Education An innovative partnership between Capella Learning Solutions and Career Builder; Offering 5

Capella Segment Opportunity Post-Secondary Job-Ready Skills Education ($ in millions) FY 2016 Revenue $424.1 $5.3 FY 2016 1 $76.9 ($8.7) Operating Income • Gain market share • Accelerate growth through innovative • Deepen differentiated education models program offerings Long-term • Grow revenue in the mid- • Build strategic employer Growth and single digit percentage relationships Shareholder Value range • Improve margin Creation • Grow earnings above contribution Opportunity revenue growth • Generate strong free cash flow 1 Acquired Hackbright and DevMountain in Q2 ‘16; includes $2.3 million pre-tax transaction-related costs and purchase accounting related items 6

Capella Education Company Financial Highlights • Business model leverage • Strong balance sheet – No debt – Strong cash position – Annual capital expenditures typically in the 5 to 6 percent of revenue range • Significant positive free cash flow • Historical quarterly dividend yield approximately 2 percent 7

Capella University’s Differentiation

Capella University: A Leader Delivering High-Quality Online Learning for Working Adults • Exclusively online • Founded in 1993 • Graduate focused university Certificates PhD/DOCTORAL 3% 24% • Reputation for academic quality and regulatory compliance BACHELOR’S MASTER’S • Leader in competency -based 26% 47% direct assessment programs • Pioneer of direct-assessment programs decoupled from credit hour requirements Capella University total enrollment of 37,223 learners as of 9/30/17 9

Capella University: Strong, Diverse and Attractive Demographics • 100% adults – Average age 39 years – Mid-career professionals – ~ 90% employed – ~ 90% enrolled part-time – 77% female – 51% learners of color • Learners seeking: – Rigorous academic experience – Relevant learning – Career advancement Most Direct Path to Career Goals 10

Capella University: Strong Graduate Career Outcomes Capella University median graduate salary compared to competition 1: Capella 2 # of Capella Program Difference to Schools Salary 3 Competitors 54 $55,307 52% Accounting 23 $48,865 22% Bachelor’s Business Information Administration Technology and Management, General 14 $89,294 78% and Management, General 29 $62,237 22% Master’s Health Business / Health Administration Care Administration / Management 8 $55,604 16% Education, General 7 $42,562 -5% Business Administration and Management, General 5 $92,751 16% Doctoral Educational Leadership and Administration, General 3 $77,193 0% Education, General 3 $72,965 0% Source: 2014 Gainful Employment Salary Data published by the U.S. Department of Education; Capella analysis 1: Capella comparison vs. segment (minimum of 2 schools reporting; programs with the most competitors by degree program selected) 2: Program references the CIP (Classification of Instructional Program Code) name used in the Gainful Employment downloadable database published by the DOE 3: % variance of reported Capella median salary vs. the average of all median salaries reported for all institutions (including Capella) in the respective category 11

Capella University: Strong Regulatory Track Record • 2014 3-year cohort-default rate of 6.9 percent – Below national, public, proprietary, and private not-for-profit institutions averages • Approximately 77 percent of revenues from Title IV program funds (as of 12/31/16) • First institution in U.S. to receive approval by accreditor and Department of Education to offer direct assessment programs at Bachelor and Master’s level 12

Capella University’s Differentiation Quality/Learner Academic Success Focus Deep Data Analytics Capabilities, Authentic Proprietary Assessment Capabilities Data/ Analytics Learning Model & Assessment Capabilities Driving Fully Embedded Program Around Designed Learner Success, Competency -Based Learning Model Professions Innovation, Differentiation Most Direct Path to Achieve Career Goals 13

Competency -Based Academic Model External Program Course Authentic Performance Standards Level Level Assessment Evaluation Advisory Criteria Boards Real world Employers scenarios Criteria Industry Learning Standards Competencies Outcomes Criteria Accreditors Real world scenarios State Boards Criteria Copyright © Capella University 2016. All rights reserved.

Capella University’s Differentiated Online Learning Models Capella Credit-Based/Guided Path Capella FlexPath Curriculum Competency -based; Aligned to external standards Assessment Model Authentic, real-world assessment Rich faculty feedback Learner Support Faculty, coaching and academic advising, tutoring, Library, Competency Structure Map, etc. Recommended source materials or Learning Resources Required textbooks and materials resources of learners choosing Accumulate credits through Academic Progress Demonstrate competency mastery earned grades Assignments and course activity Weekly 12 weeks fromcourse start date deadlines weekly Predetermined by faculty Pace Determined by learner and academic calendar Cost Pay per credit Subscription, all you can master 15

Capella Markets and Growth Opportunities 16

Market Opportunity by Segment Post-Secondary Job-Ready Skills Education 1.6 million adult online Millions need upskilling Large Markets learners throughout career Significant growth opportunity Highly fragmented; market Market Growth due to introductory market flat stage • Gain market share • Expand in current and new through innovative new locations education models like • Develop a differentiated FlexPath and continued market position Capella differentiation Opportunity • Expand market by 20% for online adult education through FlexPath offering 17

Serving 6 Large and Growing Markets Fully Online USA Enrollment Post-Secondary Vertical Working Adults> age 25 Markets (Fall 2013) Bachelor’s Master’s or Vertical market characteristics: Degree Higher Healthcare/ • Highly fragmented market Nursing 199,000 146,000 • 3 to 4% CAGR for new and Business 420,000 202,000 replacement jobs through 2020 IT 133,000 20,000 • High knowledge worker concentrations Education 46,000 152,000 • Expandable with innovation and Public 168,000 43,000 new education models Admin/Safety Behavioral 42,000 67,000 Sciences Total 1,008,000 630,000 Pursuing Market Share Gains Sources: 2015 Capella research, Eduventures, IPEDS, NCES, NCHEM, Bureau of Labor Statistics (BLS) 18

Driving Growth through Innovation Post-Secondary • Drive flexibility and affordability – FlexPath direct assessment program – SOPHIA Pathways for College CreditTM – Redefining employer relationships – Programs designed to meet current market demand Leveraging Capella’s Core Capabilities to Drive Differentiation and Innovation 19

Capella’s Unique Flexible Degree Opportunity Post-Secondary Flexible Degree Market • Limited competition in flexible at Full Penetration 1 degree/direct assessment programs like FlexPath Credit degrees Flexible hour • Market expansion by up to 20% by ~60% attracting learners previously not ~40% considering post-secondary education 2 • Capella has first mover advantage • Strong demand drivers • Overall market share expansion 12015 Capella Research, Eduventures, US Census Bureau; 22015 Capella Research Driving Affordability, Flexibility and More Direct Path to Career Success 20

Driving Growth through Learner Success Post-Secondary • Learner success – Balances out some new enrollment volatility in total enrollment growth model – Comprehensive focus on improving early cohort persistence (1st 4 quarters enrolled) – Fully online model and comprehensive data analytics capabilities driving improvements – Culture focused on learner success 21% improvement over 5 years of early cohort persistence improvements (as of 12/31/16) 21

Driving Growth through Marketing Execution Building Media Relation- channels Reputation Post-Secondary ships • Leveraging analytics to drive marketing Site or Landing Page visit efficiencies, learner Site Experiences success, innovation • Increasingly Inquiry personalized Application marketing • Deeper relationships New Enrollment with employers 22

Emerging Job-Ready Skill Opportunities Job-Ready Skills • Capella Learning Solution Offering; exclusive partnership with CareerBuilder – RightSkill SM – Identify skills needed and candidates for up-skilling, deliver learning, place consumer in job • Unique offering in software engineering and coding school market – DevMountain – Hackbright Academy Most Direct Path to Career Success 23

Driving Long -term Growth by Expanding Markets Job-Ready Skills • Acquisitions in April/May 2016 Accessible, affordable, teaching Serves only women and focused Mission leading -edge technology trends and on changing the gender gap in languages technology Secondary tech hubs that support DevMountain’s affordability mission -Location Tech Hub: San Francisco Provo and Salt Lake City, UT; Dallas, TX; Phoenix, AZ Entry-level Web and iOS developer Entry-level software engineering Placement and UX Design positions positions Online In development stage In exploration stage potential 24

Driving Long -term Growth by Expanding Markets Job-Ready Skills • Partnership announced in February 2016 CareerBuilder: a globalleader in human capital solutions; Partnership Capella Learning Solutions: a market leader in building high-quality, professional learning solutions Job seekers: interactive experiences to learn, practice, and verify skills for in-RightSkill Offering demand careers; direct path to interviews with employer hiring partners Employers: verified, job-ready candidates RightSkill -verified candidates are quicker to perform, retain longer, and cost less to find and train Value Proposition Quickly supply a new pool of job-ready candidates in areas experiencing a gap between employer demand and experienced job seekers Customer Service Assistant Restaurant Focus Areas for Up- Technical Support Representative Manager Skilling and Assessing Job-ReadySkills Retail Management Staffing Recruiter 25

Capella’s Position Post-Secondary Job-Ready Education Skills • Serving large, attractive markets • Focusing on Capella University market share growth – Building brand awareness and consideration – Further differentiating value proposition • Driving learner success • Developing innovative new learning models • Expanding into job-ready skills market 26

Financial Highlights

Financial Model Drivers Graduate focus = Strong revenue per learner Stabilized revenues and Longer degree programs = operating margins Revenue growth = Operating margin leverage Productivity & learner success Data analytics = improvements Financial flexibility and = Shareholder value drivers cash generation Innovation and long-term Proprietary learning model = sustainable growth 28

Stable Revenue and Operating Margin Revenues 1 Operating Income 1 ($ in millions) ($ in millions) $429 $70 $68 $68 $417 $408 16.6 % 16.9 % 15.9 % 2014 2015 2016 2014 2015 2016 2 % indicates operating margin 1 Arden University results are excluded due to the divestiture in 20162 2016 operating income and operating margin include $2.3 million transaction -related costs and purchase accounting related items due to acquisitions of Hackbright and DevMountain Stabilized Financial Performance; Improved Operating Performance 29

Capella University Annual Y-o-Y Enrollment 2014 2015 2016 8.7% Post-Secondary • Third consecutive year of total enrollment 5% 4% growth driving financial 3.7% results 3.4% 2.5% – Persistence improvements 2% smooth out new enrollment 0.6% volatility Average Quarterly Total Enrollment Growth -0.9% New Enrollment Growth Early Cohort Persistence 1 1Early cohort persistence calculated as 4 quarter rolling average from first quarter census date to fourth quarter census date Performance Trends Stabilized 30

Strong Stable Cash Flow Generation ($ in millions) $85 Uses of Cash FY 2016 1 Investments in $70 $68 $68 • FlexPath $60 $60 • Analytics & marketing capabilities • Learner success & courses • Job-ready skills offerings • Infrastructure Return to Shareholders $18 million Cash Dividends (asof Dec. 2016 2014 2015 2016 $0.41/share quarterly) 1 Operating Income—Continuing Operations Share Cash from Operating Activities—Continuing Operations 2 $26 million Repurchases (489,133 shares) 1 2016 operating income includes $2.3 million transaction-related costs and purchase accounting related items due to acquisitions of Hackbright and DevMountain; 2 2016 includes $13.6 million of lease incentives Strong Cash Flow Generation Fully Funding Operations and Investments 31

Positioned for Long-term Growth • Strong financial position • Three consecutive years of annual total enrollment growth • Well positioned for continued growth – Differentiated value proposition – Learner success traction – Game-changing innovation – Market expansion • Strong regulatory compliance track record Drive Long-Term Shareholder Value 32

Thank You

Contact Information For additional information please contact: Heide Erickson Director, Investor Relations Capella Education Company Capella Tower 225 South Sixth Street Minneapolis, MN 55402 612.977.5172 Heide.Erickson@Capella. edu www.capellaeducation. com (Corporate Site) www.capella. edu (Learner Site) 34