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Capella University is a private, for-profit, specialized distance learning institution of higher learning that is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools and headquartered in Minneapolis, Minnesota. Capella University offers bachelor's, master's and PhD degrees in business, technology, education, human services and psychology. Capella has 76 graduate and undergraduate specializations and 16 certificate programs. Nearly 45 percent of it students are PhD students. The masters degree programs in counseling are also CACREP accredited. Today, the university has more than 17,200 students from all 50 states and 63 countries.

The school is owned by the Capella Education Company (Nasdaq: CPLA), a publicly traded parent corporation.

History

What is now the Capella Education Company was founded in 1991 by Stephen Shank, former CEO of Tonka. In 1993, The Graduate School of America was founded by Shank and Dr. Harold Abel. In 1999, the company and university were renamed to their current, Capella Education Company and University. Capella has also made business arrangements and academic partnerships with numerous other schools, corporations, and the military.

Schools

Capella University is academically organized into 5 distinct schools.

• School of Education
• School of Human Services
• Harold Abel School of Psychology
• School of Business and Technology
• School of Undergraduate Studies

Controversy

Capella University is currently being audited by the United States Department of Education, Office of the Inspector General (OIG) on charges that they have not returned Title IV funds, as required by Federal Law. In a prospectus filed with the Securities and Exchange Commission (refer to pages 81 & 82), and as reported by the Associated Press, Capella University has already admitted that:

"Based on its review to date, the OIG audit staff has identified several such learners for whom it believes proper returns of Title IV funds were not made. For the three year audit period, the total amount of Title IV funds that was not returned for learners that withdrew without providing official notification was approximately $500,000."

The Capella Prospectus also states:

"Based on the field auditors’ preliminary audit exceptions, which is a preliminary list of issues regarding Capella University’s compliance with Title IV rules and requirements, and our verbal communications with the OIG audit staff, we believe that the most significant potential financial exposure from the audit pertains to repayments to the Department of Education that could be required if the OIG concludes that we did not properly calculate the amount of Title IV funds required to be returned for learners that withdrew from Capella University without providing an official notification of such withdrawal and without engaging in any academic activity prior to such withdrawal."'

In a recent article published by InvestorIdeas.com entiled, Online College Is Hot, But This New IPO in the Space Merits Barely Passing Grades reports that of the roughly $70 million dollars intially raised by Capella University's stock offering, approximately $50.5 million dollars went to corporate executives and insiders who wanted to cash out.

"Instead, most of the money is being used to fund a special dividend payable in multi-million dollar dollops to top managers and directors. As pre-IPO shareholders, they are using the IPO as way to cash out -- just at a time when we as investors are being asked to believe in the company and its future.

"Chief executive Stephen Shank, for example, is getting a rich $14.2 million, according to corporate documents. (He’s due to leave next year.) Two directors -- Jon Reynolds, Jr. and Tony Christianson – are getting around $11 million each. Two others, S. Joshua Lewis and Jody Miller, get $7.5 million and $6.8 million."

The article further cautions:

"Indeed there are other signs that Capella University has been stretching to meet growth targets:

* At 33% of revenue, selling and promotional costs are much higher than the industry average of 23%. There's a hint that Capella University has been attracting, shall we say, a less committed student.

* Net cash from operations declined in the first nine months of year. The company cites several reasons but one is lower student payments for courses in the third quarter."

The article also notes positive signs indicating Capella's growth:

Not surprisingly, analysts linked to the banks that helped do the IPO are rolling out buy ratings. They have price targets suggesting you could get 30% profits in a year.

Stifel Nicolaus analyst Jerry Herman, for example, expects Capella Education earnings to grow more than 20% a year for the next few years. He has a 12-month price target of $31 per share.

While Capella University has been trying to obtain accreditation from the American Psychological Association (APA) for many years, they recently voluntarily withdrew their application because their PsyD programs, which were created in 2003, are considered too new to be evaluated by the APA. Prior to the introduction of the PsyD program, Capella had offered a PhD in psychology. Capella's withdrawal from the accreditation process is documented on the APA website.

Scholarships

As an accredited university Capella is authorized to partake in the Federal Stafford Loan Program but the school also offers unique scholarships offered only to leaners enrolled at Capella University. These scholarships include:

League for Innovation Scholarship: A $50,000 doctoral scholarship awarded annually since 2001 to one PhD-level student

Spirit of Capella Scholarships For Injured Service Members: Five $10,000 scholarships awarded annually to service members wounded in Operation Enduring Freedom or Operation Iraqi Freedom.

Phi Theta Kappa International Honorary Society Scholarships: Two $5000 awards given to members of PTK. The awards are divided equally over eight quarters with each learner being given $625 per quarter to help cover tuition.

The Robert C. Ford Human Services Scholarship: Awarded annually to learners enrolled in the School of Human Services

The Helene Krivosha Scholarship: Two $5,000 scholarships are awarded annually to students enrolled in the School of Education. One at the master's degree level and one at the doctoral degree level.

Corporate Alliance Scholarships: $10,000 corporate scholarships to five applicants from corporations that have a corporate alliance with Capella University.

School and Alumni Awards and Recognition

Capella University Faculty Member Receives Human Rights Award.

MINNEAPOLIS--(BUSINESS WIRE)--Benjamin Noah, Ph.D., NCC, NCCC, ACS, LPC, a faculty member for Capella University, was recently awarded the Oklahoma Counseling Association's Human Rights Award. The award is presented in recognition of an OCA member who has made major contributions in human rights.

Capella University Phd Graduate Receives Nursing and Mentoring Awards

Robin Stewart, a PhD graduate of Capella University’s School of Human Services, has received central Florida’s 2006 Polk County Nurse Manager of the Year award, as well as the “She Knows Where She is Going” award from Girls, Inc. Stewart is quoted as saying about her education at Capella,"...The additional education I have received from Capella has helped me look at things more globally, and that is a great benefit in the work world.”

Capella University PhD Student Receives One of Maryland's Top Minority Business Enterprise Awards

Deborah Stroman, a PhD student at Capella University, an accredited online university, has received one of Maryland's Top Minority Business Enterprise Awards for Soulful Golf, Inc. (www.soulfulgolf.com), a golf event planning company she co-founded in 2001. The award is presented by Maryland's Governor's Office of Minority Affairs (GOMA) for outstanding achievement in business development, client satisfaction, professional affiliations and community involvement. Nearly 800 applicants from throughout Maryland applied for the award this year.

Capella University receives state approval for K-12 leadership specialization Graduate program is now regionally accredited and state-approved

Capella University's graduate specialization in K-12 Educational Leadership was approved by the Minnesota Board of School Administrators on April 2, 2003. Capella University is the first online university to receive approval to endorse K-12 principals and superintendents for licensure in Minnesota and the only online university in the nation to achieve both regional accreditation and state approval. Now Capella graduates living in states throughout the nation can more readily receive licensure upon completion.

Capella University PhD Graduate Named Georgia Middle School Principal of the Year for 2005; Martha Richardson Received Doctoral Online Degree from Capella in Leadership in Educational Administration

The National Association of Secondary School Principals (NASSP) has named Martha Richardson as Georgia's Middle School Principal of the Year for 2005. Richardson, who has been principal of Gardner Newman Middle School in LaGrange, Georgia, for the past 5 years, was nominated for the award by her fellow principals in the Georgia Association of Secondary School Principals. "At Capella, we talked about common issues all the time. As principals, we are trying to create the kind of environment in the school - and the community - where our teachers can teach," Richardson says. "The ability to collaborate with CEOs and other professionals at Capella provided an additional realm of expertise that applies to educational leadership."

Capella University Earns National Program Approval for Counseling Program: Advancing the Field of Counselor Education by Providing Quality Education And Training Online.

Capella University's mental health counseling master's specialization is the first and only fully online mental health counseling program to receive CACREP accreditation in the United States.

Capella University PhD Student Participates In National Institute Of Health Festival

Capella University (www.capella.edu) PhD student Gloria D. Jones, M.A., LPC, NCAC II, CCS, presented her doctoral dissertation at the first annual National Institutes of Health (NIH) National Graduate Student Research Festival. Jones is quoted as saying,"I am extremely thankful to my dissertation committee for making me take those extra steps to make my work appealing outside academia."

Training Magazine Names Capella University Editor's Pick for Best Compliance Training. Online university receives award for its Ethics Education program

Training Magazine has named Capella University, an accredited online university and a leader in online education, its Editor's Pick for Best Compliance Training for its Ethic Education training program for employees. The award will be presented to Capella at the Training Solutions Conference in Denver from October 23 -25.

Capella University Wins Top Award for Innovation in Distance Education

Stacey Clawson, principal learning architect, and Liz Frame, course designer, at Capella University, an accredited* online university, have won a top award for innovation in distance education. The National University Telecommunications Network, a network of professionals advancing higher education through technology and distance learning, selected "Next Generation Learning: Problem-based Learning in an Online Environment" for its Outstanding Distance Education Innovation Award 2006.

Capella University Faculty Member Named Forensic Psychology Series Editor For Praeger Publishing.

Dr. Duane Dobbert, an Adjunct Faculty Member in the Online University's School of Human Services, Has Set the Goal of Producing 50 New Titles in the Next Five Years. Dobbert, who lives in Naples, Florida, has been a faculty member at Capella University, an accredited online university and a leader in online education, for the past six years. He has authored several PhD courses and has chaired 19 comprehensive and dissertation committees. He also earned his PhD from Capella in 2000.

Learn from the Winner: Capella University Chancellor and Founder Wins "Innovator" Tekne Award

Capella University Chancellor Stephen Shank has won a 2001 Tekne Award in the Innovator category. The Innovator Award recognizes an individual who has had a strong and positive impact in technology development. The Tekne Awards recognize technology innovators who have made lasting contributions to enhancing the quality of life and competitiveness of Minnesota and are sponsored by Minnesota Technology, Inc. and The Minnesota High Technology Association.

"Capella University embodies the best principles of adult and distance learning." Dr. Leslie Cochran -President of Youngstown State University and Chair of the North Central Association Accreditation Team.

External links

• Capella University website
• Capella Education Company website
• Capella Education Shares Jump After IPO - Article with information about the audit of Capella University by United States Department of Education, Office of the Inspector General
• Capella University Prospectus filed with Securities & Exchange Commission. Refer to pages 81 & 82 for information regarding audit by USDE, Office of the Inspector General
• Online College Is Hot, But This New IPO in the Space Merits Barely Passing Grades
• Capella University Costs

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