Capella Education Company Announces Filing of Registration Statement for an Offering of Common Stock

Business Wire, March 22, 2007

MINNEAPOLIS -- Capella Education Company (NASDAQ:CPLA), a provider of exclusively online post-secondary education through its wholly owned subsidiary Capella University, today announced that it has filed a registration statement with the Securities and Exchange Commission for a proposed offering of shares of its common stock. Capella will offer approximately 0.5 million newly issued shares, and we anticipate that certain current Capella shareholders will offer approximately 2.6 million shares.

The underwriters of the proposed offering are expected to have the option to purchase up to an additional 15 percent of the offered shares of common stock from Capella and certain of the selling shareholders to cover over-allotments, if any. Capella will not receive any proceeds from the sale of shares by the selling shareholders, and intends to use proceeds from any newly issued shares towards the cost of the offering and other general corporate purposes.

The offering will be made through an underwriting syndicate led by Credit Suisse Securities (USA) LLC. The other co-managing underwriters in the syndicate are Banc of America Securities LLC, Piper Jaffray & Co., Robert W. Baird & Co. Incorporated, Stifel, Nicolaus & Company, Incorporated and Signal Hill Capital Group LLC.

When available, a copy of the prospectus related to this offering may be obtained by contacting Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010 (Tel: 1-800-221-1037).

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About Capella Education Company

Founded in 1991, Capella Education Company is an exclusively online post-secondary education services company. Through our wholly owned subsidiary, Capella University, regionally accredited by The Higher Learning Commission(a), we offer a variety of doctoral, master's and bachelor's online degree programs, in the following disciplines: business, organization and management; education; psychology; human services; and information technology. Our academic offerings combine competency-based curricula with the convenience and flexibility of an online learning format. As of December 31, 2006, Capella University offered over 760 online courses and 13 academic programs with 75 specializations to approximately 18,000 learners.

(a) Capella University is accredited by The Higher Learning Commission and a member of the North Central Association of Colleges and Schools, 30 N. LaSalle Street, Suite 2400, Chicago, IL 60602-2504; 312-263-0456; www.ncahigherlearningcommission.org.