APB 25 pursuant to Statement of Financial Accounting Standards No. 123, Accounting for Stock-based Compensation (‘‘FAS 123’’). Under the intrinsic value method, no stock-based compensation expense was recognized in the Company’s Consolidated Statements of Income because the exercise price of the Company’s stock options granted to employees and directors equaled the fair market value of the underlying stock at the date of grant.

Stock-based compensation expense recognized in the Company’s Consolidated Statements of Income for the three and six months ended June 30, 2006 and 2007 included compensation expense for share-based payment awards granted prior to, but not yet vested as of December 31, 2005, based on the grant date fair value estimated in accordance with the pro forma provisions of FAS 123 and compensation expense for the share-based payment awards granted subsequent to December 31, 2005, based on the grant date fair value estimated in accordance with the provisions of FAS 123(R). Stock-based compensation expense recognized in the Consolidated Statements of Income for the three and six months ended June 30, 2006 and 2007 is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. FAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

Stock-based compensation plans

In July 1996, the Company’s stockholders approved 1,500,000 shares of common stock for grants under the Company’s 1996 Stock Option Plan. This plan was amended by the stockholders at the May 2001 Annual Stockholders’ Meeting and at the May 2005 Annual Stockholders’ Meeting to increase the number of shares authorized for issuance thereunder by 1,000,000 and 500,000, respectively (as amended, the ‘‘Plan’’). A total of 3,000,000 shares have therefore been approved for grants under the Plan. The Plan was again amended at the May 2006 Annual Stockholders’ Meeting to authorize a one-time exchange of stock options for restricted stock by employees (excluding the five highest compensated executive officers) and to permit restricted stock and cash awards to qualify for favorable tax treatment under Section 162(m) of the Internal Revenue Code. The Plan provides for the grant of options intended to qualify as incentive stock options, and also provides for the grant of non-qualifying options and restricted stock to employees, officers and directors of the Company. Options and restricted stock may be granted to eligible employees, officers or directors of the Company at the discretion of the Board of Directors. Vesting provisions are also at the discretion of the Board of Directors. Options may be granted at option prices based at or above the fair market value of the shares at the date of grant. The maximum term of the options granted under the Plan is ten years.

In May 1998, the Company adopted the Strayer Education, Inc. Employee Stock Purchase Plan (‘‘ESPP’’). Under the ESPP, eligible employees may purchase shares of the Company’s common stock, subject to certain limitations, at 90% of its market value at the date of purchase. Purchases are limited to 10% of an employee’s eligible compensation. The aggregate number of shares of common stock that may be made available for purchase by participating employees under the ESPP is 2,500,000 shares.

In February 2006, the Company’s Board of Directors approved cash payments to the holders of vested stock options in an amount equivalent to the Company’s common stock dividends. These cash payments are remitted on the same dates as the Company’s dividends and amounted to approximately $0.2 million and $0.1 million for the three months ended June 30, 2006 and 2007, respectively, and approximately $0.3 million and $ 0.2 million for the six months ended June 30, 2006 and 2007, respectively.

In February 2007, the Company’s Board of Directors approved a grant of 20,016 shares of restricted stock to certain employees. These shares vest 100% on February 13, 2010. The Company’s stock price closed at $113.72 on the date of the restricted stock grant.

In May 2007, the Company awarded 3,726 shares of restricted stock to various non-employee members of the Company’s Board of Directors as part of its annual director compensation program. The Company’s stock price closed at $128.67 on the date of this restricted stock grant.

9

Table of Contents

The table below sets forth the stock option activity for the six months ended June 30, 2007 and other stock option information at June 30, 2007:

			Number of shares						Weighted- average exercise price						Weighted- average remaining contractual life (yrs.)						Aggregate intrinsic value(1) (in thousands)
Balance, December 31, 2006					762,334					$	56.42
Grants					—						—
Exercises					(313,300	)					39.22
Forfeitures					—						—
Balance, June 30, 2007					449,034					$	68.42						2.9					$	28,421
Vested, June 30, 2007					288,617					$	46.38						1.3					$	24,627
Exercisable, June 30, 2007					288,617					$	46.38						1.3					$	24,627

(1)

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of 2007 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2007. The amount of aggregate intrinsic value will change based on the fair market value of our stock.

The following table summarizes information regarding stock option exercises for the six months ended June 30, 2006 and 2007 (in thousands):

			For the six months ended June 30,
			2006						2007
Proceeds from stock options exercised				$	3,249					$	12,288
Tax benefits related to stock options exercised					1,787						9,963
Intrinsic value of stock options exercised(1)					4,670						25,706

(1)	Intrinsic value of stock options exercised is estimated by taking the difference between the Company’s closing stock price on the date of exercise and the exercise price, multiplied by the number of options exercised for each option holder and then aggregated.

The following table summarizes information about the stock options to purchase the Company’s common stock at June 30, 2007:

			Options Outstanding																		Options Exercisable
Range of exercise prices			Number outstanding at 6/30/07						Weighted- average remaining contractual life (yrs.)						Weighted- average exercise price						Number exercisable at 6/30/07						Weighted- average exercise price
$33.69-$67.84					288,617						1.3					$	46.38						288,617					$	46.38
$107.28-$107.28					150,417						5.6					$	107.28						—
$119.72-$119.72					10,000						4.9					$	119.72						—
					449,034						2.9					$	68.42						288,617					$	46.38

The table below sets forth the restricted stock activity for the six months ended June 30, 2007:

			Number of shares						Weighted- average grant price
Balance, December 31, 2006					205,567					$	102.37
Grants					23,742						116.07
Vested shares					(1,543	)					103.60
Forfeitures					(940	)					101.78
Balance, June 30, 2007					226,826					$	103.80

10

---

Table of Contents

At June 30, 2007, total stock-based compensation cost which has not yet been recognized was $15.7 million, representing $13.1 million for unvested restricted stock and $2.6 million for unvested stock options. This cost is expected to be recognized over the next 37 months on a weighted-average basis.

Valuation and Expense Information Under FAS 123(R)

The following table summarizes the stock-based compensation expense recorded for the three and six months ended June 30, 2006 and 2007 by expense line item (in thousands):

			For the three months ended June 30,												For the six months ended June 30,
			2006						2007						2006						2007
Instruction and educational support				$	125					$	178					$	339					$	343
Selling and promotion					141						160						273						306
General and administration					1,761						2,193						2,735						4,391
Stock-based compensation expense included in operating expense					2,027						2,531						3,347						5,040
Tax benefit					780						961						1,289						1,914
Stock-based compensation expense, net of tax				$	1,247					$	1,570					$	2,058					$	3,126

Stock-based compensation expense recognized in the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2006 and 2007 is based on awards ultimately expected to vest and, therefore, has been reduced for estimated forfeitures. FAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience.

6.    Investments in Marketable Securities

Most of the Company’s excess cash is invested in tax-exempt money market funds and a diversified, short-term, investment grade, tax-exempt bond fund to minimize the Company’s principal risk and to benefit from the tax efficiency of the fund’s underlying securities. As of June 30, 2007, the Company had a total of $75.7 million invested in the short-term tax-exempt bond fund. The investments are considered ‘‘available-for-sale’’ as they are not held for trading and will not be held to maturity, in accordance with Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities. The Company records the net unrealized gains and losses for changes in fair value as a component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses from the sale of marketable securities are based on the specific identification method.

7.    Long-Term Liabilities

Lease Incentives

In conjunction with the opening of new campuses and renovating existing ones, the Company, in some instances, was reimbursed by the lessors for improvements made to the leased properties. In accordance with Financial Accounting Standards Board (‘‘FASB’’) Technical Bulletin No. 88-1, these improvements were capitalized as leasehold improvements and a long-term liability was established for the reimbursements. The leasehold improvements and the long-term liability will be amortized on a straight-line basis over the corresponding lease terms, which range from five to ten years. As of December 31, 2006 and June 30, 2007, the Company had deferred lease incentives of $3.9 million and $4.2 million, respectively.

Lease Obligations

In accordance with the FASB Technical Bulletin No. 85-3, Accounting for Operating Leases with Schedule Rent Increases, the Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as a long-term liability. As of December 31, 2006 and June 30, 2007, the Company had deferred lease obligations of $3.8 million and $4.2 million, respectively.

11

---

Table of Contents

Deferred Gain

In conjunction with the sale and lease back of its Loudoun, Virginia campus building in June 2007, the Company realized a gain of $2.8 million before tax, which is deferred and recognized over the 10-year lease term. The non-current portion of this gain, which was $2.5 million at June 30, 2007, is recorded as long-term liability.

8.    Income Taxes

The Company adopted the provisions of Financial Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (‘‘FIN 48’’), an interpretation of FASB Statement No. 109 (‘‘SFAS 109’’) on January 1, 2007. As a result of the implementation of FIN 48, no material adjustment in the liability for unrecognized income tax benefits was recognized. The amount of unrecognized tax benefits at the adoption date of January 1, 2007 and at June 30, 2007 are immaterial. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2007, the amount of accrued interest related to uncertain tax positions was immaterial. The tax years 2003-2006 remain open to examination by the major taxing jurisdictions to which the Company is subject.

9.    Sale of Campus Building

In the second quarter 2007, the Company sold its Loudoun, Virginia campus building for $5.8 million. The Company will lease back most of the campus building over a 10-year period. The transaction resulted in a gain of $2.8 million before tax, which is to be recognized over the 10-year lease term.

10.    Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157 (‘‘SFAS 157’’), Fair Value Measurements, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. Earlier adoption is permitted, provided that the company has not yet issued financial statements, including for interim periods, for that fiscal year. We are currently evaluating the impact of SFAS 157, but do not expect the adoption of SFAS 157 to have a material impact on our consolidated financial position, results of operations or cash flows.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158. ‘‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans’’ (FAS 158), an amendment to FASB Statements No. 87, 88, 106 and 132(R). FAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit pension and other postretirement benefit plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other nonowner changes in equity. The standard also requires disclosure in the notes to the financial statements of additional information about certain effects on net periodic benefit costs of the next fiscal year that arise from delayed recognition of gains or losses, prior services costs and transition asset or obligation. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. The Company does not expect the adoption of FAS 158 will have a material effect on the Company’s financial position or results of operations since it has no defined benefit pension or other postretirement plan.

In February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option for Financial Assets and Financial Liabilities’’. This statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. This statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is evaluating the statement but does not expect the adoption of SFAS No. 159 will have a material effect on the Company’s financial position or results of operations.

12

---

Table of Contents

ITEM 2:    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Cautionary Notice Regarding Forward Looking Statements

Certain of the statements included in this ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ as well as elsewhere in this report on Form 10-Q are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 (‘‘Reform Act’’). These statements are based on the Company’s current expectations and are subject to a number of assumptions, risks and uncertainties. In accordance with the Safe Harbor provisions of the Reform Act, the Company has identified important factors that could cause the actual results to differ materially from those expressed in or implied by such statements. The assumptions, uncertainties and risks include the pace of growth of student enrollment, our continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as regional accreditation standards and state and regional regulatory requirements, competitive factors, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks associated with the acquisition of existing educational institutions, risks relating to the timing of regulatory approvals, our ability to continue to implement our growth strategy, and general economic and market conditions. Further information about these and other relevant risks and uncertainties may be found in the Company’s annual report on Form 10-K and its other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward looking statements.

Additional Information

We maintain a website at http://www.strayereducation.com. The information on our website is not incorporated by reference in this Quarterly Report on Form 10-Q and our web address is included as an inactive textual reference only. We make available, free of charge through our website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Results of Operations

In the second quarter of 2007, the Company generated $78.9 million in revenue, an increase of 20% compared to the same period in 2006, as a result of average enrollment growth of 16% and a 5% tuition increase at the beginning of 2007. Income from operations was $26.4 million for the second quarter of 2007, an increase of 23% compared to the same period in 2006. Net income was $17.4 million, an increase of 24% in the second quarter of 2007 compared to the same period in 2006. Diluted earnings per share was $1.20 in the second quarter of 2007 compared to $0.97 in the same period in 2006.

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Enrollment.    Enrollment at Strayer University for the 2007 spring term, which began April 2, 2007 and ended June 18, 2007, increased 16% to 31,656 students compared to 27,289 for the same term in 2006. Across the Strayer University campus and online system, new student enrollments increased 17% and continuing student enrollments increased 16%. Out of area online enrollments increased 21%. Students taking 100% of their classes at online (including campus based students) increased 19%. The total number of students taking at least one course online in the 2007 spring term increased 20% to 22,392.

Revenues.    Revenues increased 20% from $65.6 million in the second quarter of 2006 to $78.9 million in the second quarter of 2007 principally due to a 16% increase in the average enrollment and a 5% tuition increase in 2007.

Instruction and educational support expenses.    Instruction and educational support expenses increased $4.0 million, or 18%, from $22.7 million in the second quarter of 2006 to $26.7 million in the second quarter of 2007. This increase was principally due to direct costs necessary to support the increase in student enrollments, including faculty compensation, related academic staff salaries, and campus facility

13

---

Table of Contents

costs, which increased $1.6 million, $1.0 million, and $0.5 million, respectively. Instruction and educational support expenses as a percentage of revenues decreased to 33.9% in the second quarter of 2007 from 34.7% in the second quarter of 2006, largely attributable to faculty costs growing at a lower rate than tuition revenue.

Selling and promotion expenses.    Selling and promotion expenses increased $2.0 million, or 18%, from $11.2 million in the second quarter of 2006 to $13.2 million in the second quarter of 2007. This increase was principally due to the direct costs required to build the Strayer University brand and to attract prospective students, and the addition of admissions personnel, particularly at new campuses. Selling and promotion expenses as a percentage of revenues decreased slightly from 17.0% in the second quarter of 2006 to 16.7% in the second quarter of 2007.

General and administration expenses.    General and administration expenses increased $2.4 million, or 24%, from $10.2 million in the second quarter of 2006 to $12.6 million in the second quarter of 2007. This increase was principally due to increased employee compensation and related expenses, higher stock-based compensation, and higher bad debt expense, which increased $0.7 million, $0.4 million and $1.0 million, respectively. General and administration expenses as a percentage of revenues increased to 16.0% in the second quarter of 2007 from 15.5% in the second quarter of 2006 primarily due to the above factors.

Income from operations.    Income from operations increased $4.9 million, or 23%, from $21.5 million in the second quarter of 2006 to $26.4 million in the second quarter of 2007 due to the aforementioned factors.

Investment and other income.    Investment and other income increased $0.4 million, or 41%, from $1.2 million in the second quarter of 2006 to $1.6 million in the second quarter of 2007. The increase was mostly attributable to an increase in investment yields and a higher average cash balance.

Provision for income taxes.    Income tax expense increased $2.0 million, or 23%, from $8.6 million in the second quarter of 2006 to $10.6 million in the second quarter of 2007, primarily due to the increase in income before taxes attributable to the factors discussed above. The Company’s effective tax rate was 38.0% for the second quarter of 2007, the same as in the second quarter of 2006.

Net income.    Net income increased $3.4 million, or 24%, from $14.0 million in the second quarter of 2006 to $17.4 million in the second quarter of 2007 because of the factors discussed above.

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006

Enrollment.    Average enrollment increased 16% to 31,903 students for the six months ended June 30, 2007 compared to 27,455 students for the same period in 2006.

Revenues.    Revenues increased 20% from $132.6 million in the six months ended June 30, 2006 to $159.1 million in the six months ended June 30, 2007, principally due to a 16% average increase in student enrollments and a 5% tuition increase effective for 2007.

Instruction and educational support expenses.    Instruction and educational support expenses increased $8.2 million, or 18%, from $44.8 million in the six months ended June 30, 2006 to $53.0 million in the six months ended June 30, 2007. This increase was principally due to direct costs necessary to support the increase in student enrollments, including faculty compensation, related academic staff salaries, and campus facility costs, which increased $3.2 million, $2.1 million, and $1.4 million, respectively. These expenses as a percentage of revenues decreased from 33.7% in the six months ended June 30, 2006 to 33.3 % in the six months ended June 30, 2007.

Selling and promotion expenses.    Selling and promotion expenses increased $4.3 million, or 19%, from $21.8 million in the six months ended June 30, 2006 to $26.1 million in the six months ended June 30, 2007. This increase was principally due to the direct costs required to build the Strayer University brand and to attract prospective students, and the addition of admissions personnel, particularly at new campuses. These expenses as a percentage of revenues decreased slightly from 16.5% in the six months ended June 30, 2006 to 16.4% in the six months ended June 30, 2007.

General and administration expenses.    General and administration expenses increased $5.2 million, or 26%, from $19.6 million in the six months ended June 30, 2006 to $24.8 million in the six months ended

14

---

Table of Contents

June 30, 2007. This increase was principally due to increased employee compensation and related expenses, higher stock-based compensation, and higher bad debt expense, which increased $1.6 million, $1.7 million, and $1.4 million, respectively. General and administration expenses as a percentage of revenues increased from 14.8% in the six months ended June 30, 2006 to 15.6% in the six months ended June 30, 2007 primarily due to the above factors.

Income from operations.    Income from operations increased $8.8 million, or 19%, from $46.5 million in the six months ended June 30, 2006 to $55.3 million in the six months ended June 30, 2007 due to the aforementioned factors.

Investment and other income.    Investment and other income increased $0.9 million, or 43%, from $2.1 million in the six months ended June 30, 2006 to $3.0 million in the six months ended June 30, 2007. The increase was primarily attributable to an increase in investment yields and a higher average cash balance.

Provision for income taxes.    Income tax expense increased $3.6 million, or 19%, from $18.6 million in the six months ended June 30, 2006 to $22.2 million in the six months ended June 30, 2007, primarily due to the increase in income before taxes discussed above. The Company’s effective tax rate was 38.0% for the six months ended June 30, 2007 compared to 38.3% for the six months ended June 30, 2006. The decrease in the Company’s effective tax rate is primarily attributable to higher income from investments in tax-exempt securities.

Net income.    Net income increased $6.2 million, or 21%, from $30.0 million in the six months ended June 30, 2006 to $36.2 million in the six months ended June 30, 2007 because of the factors discussed above.

Liquidity and Capital Resources

At June 30, 2007, the Company had cash, cash equivalents and marketable securities of $168.5 million compared to $128.4 million at December 31, 2006 and $122.6 million at June 30, 2006. Most of the Company’s excess cash is invested in tax-exempt money market funds and a diversified, short-term, investment grade, tax-exempt bond fund to minimize the Company’s principal risk and to benefit from the tax efficiency of the funds’ underlying securities. As of June 30, 2007, the Company had a total of $75.7 million invested in the short-term tax-exempt bond fund. At June 30, 2007, the 413 issues in this fund had an average credit rating of AA, an average maturity of 1.2 years and an average duration of 1.2 years, as well as an average yield to maturity of 3.8%. The Company had no debt as of December 31, 2006 or June 30, 2007.

For the six months ended June 30, 2007, the Company generated $44.6 million net cash from operating activities compared to $30.7 million for the same period in 2006. Capital expenditures were $7.4 million for the six months ended June 30, 2007 compared to $6.1 million for the same period in 2006. The Company generated $5.8 million in net proceeds from the sale of its Loudoun, Virginia campus building in June 2007. For the six months ended June 30, 2007, the Company paid $9.1 million in cash dividends to its common stockholders and received $12.3 million upon the exercise of stock options. During the three months ended June 30, 2007, the Company spent $8.0 million for the repurchase of 64,764 shares of common stock at an average price of $123.75 per share as part of a previously announced common stock repurchase authorization. The Company’s remaining authorization for common stock repurchases was $16 million at June 30, 2007, having spent $16 million for repurchases in the six months ended June 30, 2007.

In the second quarter of 2007, bad debt expense as a percentage of revenue was 3.5% compared to 2.6% for the same period in 2006. Days sales outstanding, adjusted to exclude tuition receivable related to future quarters, was 12 days at the end of the second quarter of 2007, compared to 10 days in the same period in 2006.

Currently, the Company invests its cash in bank overnight deposits, money market funds and a short-term tax-exempt bond fund. In addition, the Company has available two $10.0 million credit facilities from two banks. There have been no borrowings by the Company under these credit facilities. The Company believes that existing cash, cash equivalents, and marketable securities, cash generated from operating

15

---

Table of Contents

activities, and if necessary, cash borrowed under the credit facilities, will be sufficient to meet the Company’s requirements for at least the next 12 months.

The table below sets forth our contractual commitments associated with operating leases as of June 30, 2007. Although they have historically been paid by the Company, common stock dividend payments are not a contractual commitment and, therefore, have been excluded from this table.

			Payments due by period (in thousands)
			Total						Within 1 Year						2-3 Years						4-5 Years						After 5 Years
Operating leases				$	112,103					$	15,572					$	33,624					$	26,151					$	36,756

New Campuses

As previously announced, Strayer University plans to open four new campuses for the fall academic term, pending final regulatory approvals. Two of these new campuses will be in New Jersey, one in Cherry Hill and the other in Willingboro, on the campus of Burlington Community College. The other two new campuses will be in Knoxville, Tennessee and Atlanta, Georgia (Strayer University’s fifth campus in that market). These four campuses, together with the two Kentucky campuses and two Florida campuses opened earlier this year, will complete the Company’s planned eight campus openings in 2007. The Company intends to announce in October the number of new campuses Strayer University’s is planning to open in 2008.

Early Reaffirmation of Accreditation

As previously announced, The Middle States Commission on Higher Education has reaffirmed on an accelerated basis the accreditation of Strayer University for a full ten-year period, through 2017. The Commission’s decision to accelerate the University’s reaffirmation was based on its extensive review of the University’s 2006 voluntary self study, and eliminates the necessity for the Commission’s accreditation review previously scheduled for 2011.

Business Outlook

Based on enrollment growth for the 2007 summer term, the Company estimates third quarter 2007 diluted EPS will be in the range of $0.60-$0.62. The Company estimates that it will incur stock-based compensation expense of approximately $0.11 per share after tax in the third quarter of 2007, which is included in the Company’s diluted EPS estimate.

ITEM 3:    QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

The Company is subject to the impact of interest rate changes and may be subject to changes in the market values of its future investments. The Company invests its excess cash in bank overnight deposits, money market funds and a short-term tax-exempt bond fund. The Company has not used derivative financial instruments in its investment portfolio.

Earnings from investments in bank overnight deposits, money market mutual funds, and short-term tax-exempt bond funds may be adversely affected in the future should interest rates change. The Company’s future investment income may fall short of expectations due to changes in interest rates or the Company may suffer losses in principal if forced to sell securities that have declined in market value due to changes in interest rates. As of June 30, 2007, a 10% increase or decrease in interest rates would not have a material impact on the Company’s future earnings, fair values, or cash flows related to investments in cash equivalents or interest earning marketable securities.

16

---

Table of Contents

ITEM 4:    CONTROLS AND PROCEDURES

a)

Disclosure Controls and Procedures.    The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2007. Based upon such review, the Chief Executive Officer and Chief Financial Officer have concluded that the Company has in place, as of June 30, 2007, effective controls and procedures designed to ensure that information required to be disclosed by the Company (including consolidated subsidiaries) in the reports it files or submits under the Securities Exchange Act of 1934, as amended, and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

b)	Internal Control Over Financial Reporting.    There have not been any changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

17

---

Table of Contents

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings

The Company is subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, we do not believe that the outcome of any of these legal matters will have a material adverse effect on our results of operations or financial condition.

Item 1A.	Risk Factors

There have been no material changes to the risk factors previously described in Part I, Item 1A included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended June 30, 2007, the Company used $8.0 million to repurchase shares of common stock under its repurchase program⁽¹⁾. The Company’s remaining authorization for common stock repurchases was $16.0 million at June 30, 2007. A summary of the Company’s share repurchases during the quarter is set forth below:

			Total number of shares purchased						Average price paid per share						Total number of shares purchased as part of publicly announced plans or programs						Approximate dollar value of shares that may yet be purchased under the plans or programs ($ mil)
Beginning Balance (at 3/31/07)																						$	24.0
April					—						—						—						—
May					57,264					$	123.63						57,264						(7.1	)
June					7,500						124.67						7,500						(0.9	)
Total (at 6/30/07)					64,764					$	123.75						64,764					$	16.0

(1)

The Company’s repurchase program was announced on November 3, 2003 for repurchases up to an aggregate amount of $15 million in value of common stock through December 31, 2004. The Board of Directors amended the program on various dates increasing the amount authorized and extending the expiration date.

Item 3.	Defaults Upon Senior Securities.

None

18

---

Table of Contents

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

At the Annual Meeting of the Stockholders held on May 2, 2007, the following matters were submitted to a vote of our common stockholders:

Proposal

1.	Election of directors:

			For						Withheld
Robert S. Silberman					11,664,962						139,235
Dr. Charlotte F. Beason					11,665,864						138,333
William E. Brock					11,727,442						76,755
David A. Coulter					11,727,557						76,640
Gary Gensler					11,734,647						69,550
Robert R. Grusky					11,734,642						69,555
Robert L. Johnson					11,715,495						88,702
Todd A. Milano					11,661,344						142,853
G. Thomas Waite, III					11,664,929						139,268
J. David Wargo					11,728,092						76,105

2.	Ratification of Appointment of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2007:

For			Against						Abstain
11,932,835					11,579						6,342

Item 5.	Other Information.

None

Item 6.	Exhibits.

31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Act.
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Act.
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

19

---

Table of Contents

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.

STRAYER EDUCATION, INC.

By:     /s/ Mark C. Brown    

Mark C. Brown
Senior Vice President and Chief Financial Officer

Date: July 27, 2007

20

---

Table of Contents

Exhibit Index

Exhibit						Description
	31	.1				Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Act.
	31	.2				Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Act.
	32	.1				Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2				Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

---