Strategic Education (STRA) 10-Q 6 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 15, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	STRAYER EDUCATION INC
Entity Central Index Key	1,013,934
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,153,979

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 117,498	$ 106,889
Tuition receivable, net	18,613	18,519
Other current assets	8,383	6,944
Total current assets	144,494	132,352
Property and equipment, net	74,954	77,139
Deferred income taxes	22,930	26,449
Goodwill	21,042	6,800
Other assets	14,276	5,694
Total assets	277,696	248,434
Current liabilities:
Accounts payable and accrued expenses	38,108	42,253
Income taxes payable	7,231	2,684
Deferred revenue	16,868	12,373
Other current liabilities	281	281
Total current liabilities	62,488	57,591
Other long-term liabilities	57,091	47,987
Total liabilities	$ 119,579	$ 105,578
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01; 20,000,000 shares authorized; 11,027,177 and 11,153,979 shares issued and outstanding at December 31, 2015 and March 31, 2016, respectively	$ 112	$ 110
Additional paid-in capital	27,577	24,738
Retained earnings	130,428	118,008
Total stockholders' equity	158,117	142,856
Total liabilities and stockholders' equity	$ 277,696	$ 248,434

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Balance Sheets [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	11,153,979	11,027,177
Common stock, shares outstanding	11,153,979	11,027,177

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statements of Income [Abstract]
Revenues	$ 111,166	$ 111,885
Costs and expenses:
Instruction and educational support	58,098	59,697
Marketing	18,298	16,681
Admissions advisory	4,349	3,993
General and administration	10,329	11,655
Total costs and expenses	91,074	92,026
Income from operations	20,092	19,859
Investment income	100	78
Interest expense	160	1,273
Income before income taxes	20,032	18,664
Provision for income taxes	7,612	7,279
Net income	$ 12,420	$ 11,385
Earnings per share:
Basic	$ 1.17	$ 1.08
Diluted	$ 1.15	$ 1.06
Weighted average shares outstanding:
Basic	10,596	10,579
Diluted	10,782	10,738

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statements of Comprehensive Income [Abstract]
Net income	$ 12,420	$ 11,385
Other comprehensive income:
Change in fair value of derivative instrument, net of income tax		(205)
Comprehensive income	$ 12,420	$ 11,180

Unaudited Condensed Consolidat6

Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2014	$ 92,732	$ 109	$ 14,550	$ 77,985	$ 88
Beginning balance, shares at Dec. 31, 2014		10,903,341
Restricted stock grants, net of forfeitures		$ 1	(1)
Restricted stock grants, net of forfeitures, shares		70,693
Stock-based compensation	$ 2,451		$ 2,451
Change in fair value of derivative instrument, net of income tax	(205)				$ (205)
Net income	11,385			$ 11,385
Ending balance at Mar. 31, 2015	106,363	$ 110	$ 17,000	89,370	$ (117)
Ending balance, shares at Mar. 31, 2015		10,974,034
Beginning balance at Dec. 31, 2015	142,856	$ 110	24,738	$ 118,008
Beginning balance, shares at Dec. 31, 2015		11,027,177
Tax shortfall associated with stock-based compensation arrangements	$ (50)		(50)
Restricted stock grants, net of forfeitures		$ 2	(2)
Restricted stock grants, net of forfeitures, shares		126,802
Stock-based compensation	$ 2,891		$ 2,891
Net income	12,420			$ 12,420
Ending balance at Mar. 31, 2016	$ 158,117	$ 112	$ 27,577	$ 130,428
Ending balance, shares at Mar. 31, 2016		11,153,979

Unaudited Condensed Consolidat7

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 12,420	$ 11,385
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of gain on sale of assets	(71)	(71)
Amortization of deferred rent	(52)	(279)
Amortization of deferred financing costs	66	195
Depreciation and amortization	4,425	4,713
Deferred income taxes	(633)	(426)
Stock-based compensation	2,891	2,451
Changes in assets and liabilities:
Tuition receivable, net	717	1,914
Other current assets	(1,440)	$ 2,573
Other assets	(2,983)
Accounts payable and accrued expenses	(4,335)	$ (983)
Income taxes payable and income taxes receivable	4,620	7,547
Deferred revenue	1,435	2,504
Other long-term liabilities	(2,380)	(831)
Net cash provided by operating activities	14,680	30,692
Cash flows from investing activities:
Purchases of property and equipment	(2,031)	$ (2,834)
Cash used in acquisition, net of cash acquired	(1,635)
Net cash used in investing activities	$ (3,666)	$ (2,834)
Cash flows from financing activities:
Payments on term loan		(1,562)
Payment of contingent consideration	$ (405)	(300)
Net cash used in financing activities	(405)	(1,862)
Net increase in cash and cash equivalents	10,609	25,996
Cash and cash equivalents - beginning of period	106,889	162,283
Cash and cash equivalents - end of period	117,498	188,279
Non-cash transactions:
Purchases of property and equipment included in accounts payable	91	$ 724
Changes in contingent consideration related to acquisitions	$ 14,625

Nature of Operations

Nature of Operations	3 Months Ended
	Mar. 31, 2016
Nature of Operations [Abstract]
Nature of Operations	1. Nature of Operations Strayer Education, Inc. (the “Company”), a Maryland corporation, conducts its operations through its wholly owned subsidiaries, Strayer University (the “University”) and New York Code and Design Academy (“NYCDA”). The University is an accredited institution of higher education that provides undergraduate and graduate degrees in various fields of study through physical campuses, predominantly located in the eastern United States, and online. NYCDA is a New York City-based provider of non-degree web and mobile app development courses. NYCDA courses are delivered primarily on-ground to students seeking to further their career in software application development. The Company has only one reporting segment.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Significant Accounting Policies [Abstract]
Significant Accounting Policies	2. Significant Accounting Policies Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the University and NYCDA. On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, and the results of NYCDA are included with the Company from the acquisition date. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. All information as of December 31, 2015 and March 31, 2015 and 2016, and for the three months ended March 31, 2015 and 2016 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated financial position, results of operations, and cash flows of the Company. Certain amounts in the prior period financial statements have been reclassified to conform to the current period’s presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year. Revenue Recognition The Company’s educational programs typically are offered on a quarterly basis and such periods coincide with the Company’s quarterly financial reporting periods. Approximately 95% of the Company’s revenues during the three months ended March 31, 2016 consisted of tuition revenue, which is recognized in the quarter of instruction. Tuition revenue is assessed for collectibility on a student-by-student basis throughout the quarter of instruction, and is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. This collectibility assessment considers available sources of funds for the student including Federal Financial Student Aid programs. The Company reassesses the collectibility of tuition revenue that it may earn based on new information and changes in the facts and circumstances relevant to a student’s ability to pay, including the timing of a student’s withdrawal from a program of study. At the start of each academic term or program, a liability (deferred revenue) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as deferred revenue. Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion behavior. Deferred revenue is recorded as a current or long-term liability in the consolidated balance sheets based on when the benefit is expected to be realized. Revenues also include textbook-related income, certificate revenue, certain academic fees, licensing revenue, and other income, which are recognized when earned. The Company’s refund policy typically permits students who complete less than half of a course to receive a partial refund of tuition for that course. Refunds reduce the tuition revenue that would have otherwise been recognized for that student. Since the University’s academic terms coincide with the Company’s financial reporting periods, nearly all refunds are processed and recorded within the same quarter as the corresponding revenue. The amount of tuition revenue refundable to students may vary based on the student’s state of residence. Unused books and related academic materials may be returned for a full refund within 21 days of the start of class; however, purchases of electronic content are not refundable if downloaded. Revenues derived from fees are not eligible for a refund. Graduation Fund In the third quarter of 2013, the Company introduced the Graduation Fund, which allows new undergraduate students to earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. New students registering in credit-bearing courses in any undergraduate program for the summer 2013 term (fiscal third quarter) and subsequent terms qualify for the Graduation Fund. Students must meet all of the University’s admission requirements, and must be enrolled in an undergraduate degree program. The Company’s employees and their dependents are not eligible for the program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by the University in the future. In their final academic year, qualifying students will receive one free course for every three courses that were successfully completed. Revenue from students participating in the Graduation Fund is recorded in accordance with the Revenue Recognition Topic, ASC 605-50. The Company defers the value of benefits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit. The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs. Each quarter, the Company assesses its methodologies and assumptions underlying these estimates and, to date, any adjustments to the estimates have not been material. The amount estimated to be redeemed in the next twelve months is $14.4 million and is included in deferred revenue as a current liability in the unaudited condensed consolidated balance sheets. The table below presents activity in the Graduation Fund for the three months ended March 31, 2015 and 2016 (in thousands): March 31, 2015 March 31, 2016 Balance at beginning of period $ 9,706 $ 20,937 Revenue deferred 3,603 5,564 Benefit redeemed (634 ) (3,236 ) Balance at end of period $ 12,675 $ 23,265 Restricted Cash A significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from the University during the academic term. There were no amounts payable for these obligations at March 31, 2016 or December 31, 2015. As part of commencing operations in Pennsylvania in 2003, the Company was required to maintain a “minimum protective endowment” of at least $0.5 million in an interest-bearing account. These funds are required as long as the Company operates its campuses in the state. The Company holds these funds in an interest-bearing account which is included in other assets. Tuition Receivable and Allowance for Doubtful Accounts The Company records tuition receivable and deferred revenue for its students upon the start of the academic term or program. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and deferred revenue generally represents advance payments from students for academic services to be provided in the future. Tuition receivables are not collateralized; however, credit risk is minimized as a result of the diverse nature of the University’s student base. An allowance for doubtful accounts is established primarily based upon historical collection rates by age of receivable, net of estimated recoveries. These collection rates incorporate historical performance based on a student’s current enrollment status and likelihood of future enrollment. The Company periodically assesses its methodologies for estimating bad debts in consideration of actual experience. The Company’s tuition receivable and allowance for doubtful accounts were as follows as of December 31, 2015 and March 31, 2016 (in thousands): December 31, 2015 March 31, 2016 Tuition receivable $ 28,543 $ 28,839 Allowance for doubtful accounts (10,024 ) (10,226 ) Tuition receivable, net $ 18,519 $ 18,613 Approximately $2.0 million of tuition receivable is included in other assets as of both December 31, 2015 and March 31, 2016, because these amounts are expected to be collected after 12 months. The following table illustrates changes in the Company’s allowance for doubtful accounts for the three months ended March 31, 2015 and 2016 (in thousands): For the three months ended March 31, 2015 2016 Allowance for doubtful accounts, beginning of period $ 8,835 $ 10,024 Additions charged to expense 3,470 3,068 Write-offs, net of recoveries (3,617 ) (2,866 ) Allowance for doubtful accounts, end of period $ 8,688 $ 10,226 Fair Value The Fair Value Measurement Topic, ASC 820-10 (“ASC 820-10”), establishes a framework for measuring fair value, establishes a fair value hierarchy based upon the observability of inputs used to measure fair value, and expands disclosures about fair value measurements. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Under ASC 820-10, fair value of an investment is the price that would be received to sell an asset or to transfer a liability to an entity in an orderly transaction between market participants at the measurement date. The hierarchy gives the highest priority to assets and liabilities with readily available quoted prices in an active market and lowest priority to unobservable inputs which require a higher degree of judgment when measuring fair value, as follows: ● Level 1 assets or liabilities use quoted prices in active markets for identical assets or liabilities as of the measurement date; ● Level 2 assets or liabilities use observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities; and ● Level 3 assets or liabilities use unobservable inputs that are supported by little or no market activity. The Company’s assets and liabilities that are subject to fair value measurement are categorized in one of the three levels above. Fair values are based on the inputs available at the measurement dates, and may rely on certain assumptions that may affect the valuation of fair value for certain assets or liabilities. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Indefinite-lived intangible assets, which include trade names, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible asset are assessed at least annually for impairment during the three-month period ending September 30, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. Under Accounting Standards Update No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment Accounting for Derivative Instruments and Hedging Activities On the date that the Company enters into a derivative contract, it designates the derivative as a hedge of (a) a forecasted transaction or (b) the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge). All derivatives are recognized in the balance sheet at their fair value. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded, net of income tax, in other comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company also formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company discontinues hedge accounting prospectively. Authorized Stock The Company has authorized 20,000,000 shares of common stock, par value $.01, of which 11,027,177 and 11,153,979 shares were issued and outstanding as of December 31, 2015 and March 31, 2016, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which has been issued or outstanding since 2004. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock. Stock-Based Compensation As required by the Stock Compensation Topic, ASC 718, the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, restricted stock, restricted stock units, and employee stock purchases related to the Company’s Employee Stock Purchase Plan, based on estimated fair values. Stock-based compensation expense recognized in the Consolidated Statements of Income for each of the three months ended March 31, 2015 and 2016 is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company is required to estimate forfeitures at the time of grant and revise the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate used is based on historical experience. The Company also assesses the likelihood that performance criteria associated with performance-based awards will be met. If it is determined that it is more likely than not that performance criteria will not be achieved, the Company revises its estimate of the number of shares it believes will ultimately vest. Net Income Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company, and (3) the amount of tax benefits that would be recorded in additional paid-in capital when the stock awards become deductible for income tax purposes. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. During the three months ended March 31, 2016, the Company had no issued and outstanding stock options that were excluded from the calculation. Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three months ended March 31, 2015 and 2016 (in thousands): For the three months ended March 31, 2015 2016 Weighted average shares outstanding used to compute basic earnings per share 10,579 10,596 Incremental shares issuable upon the assumed exercise of stock options 19 — Unvested restricted stock 140 186 Shares used to compute diluted earnings per share 10,738 10,782 Income Taxes The Company provides for deferred income taxes based on temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. The Income Taxes Topic, ASC 740, requires the company to determine whether uncertain tax positions should be recognized within the Company’s financial statements. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined to be more likely than not to be sustained upon examination. Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained. The tax years 2013-2015 remain open for Federal tax examination and the tax years 2012-2015 remain open to examination by state and local taxing jurisdictions in which the Company is subject. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates included allowances for doubtful accounts, the useful lives of property and equipment, fair value of future contractual operating lease obligations, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill, intangible assets and the interest rate swap arrangement, and the provision for income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30)” (“ASU 2015-03”). The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted ASU 2015-03 effective January 1, 2016 and there was no material effect on its condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The Company adopted ASU 2015-17 effective January 1, 2016 and reclassified approximately $6.4 million from current to non-current assets in the condensed consolidated balance sheet as of December 31, 2015 to conform to the current period presentation. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The new guidance requires the recognition of right-of-use assets and lease liabilities on the balance sheet for most leases. Under current guidance, operating leases are off-balance sheet. ASU 2016-02 also requires more extensive quantitative and qualitative disclosures about leasing arrangements. ASU 2016-02 applies to fiscal periods beginning after December 15, 2018, using the modified retrospective method, with early adoption permitted. The Company anticipates that the impact of ASU 2016-02 on its consolidated balance sheet will be material as the Company will record significant asset and liability balances in connection with its leased properties. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 impacts several aspects of the accounting for share-based payment transactions, including classification of certain items on the consolidated statement of cash flows and accounting for income taxes. Specifically, ASU 2016-09 requires excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in earnings, which could introduce significant volatility to the Company’s provision for income taxes. In addition, ASU 2016-09 allows companies to recognize the impact of stock award forfeitures at the time of forfeiture, rather than as an estimate ratably over the life of awards. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The transition method varies for each of the areas in ASU 2016-09. The Company is currently evaluating the impact of ASU 2016-09 on its Consolidated Financial Statements and has not yet selected a transition date. Other ASUs issued through March 2016 by the FASB but not yet effective are not expected to have a material effect on the Company’s Consolidated Financial Statements.

Acquisition of New York Code an

Acquisition of New York Code and Design Academy	3 Months Ended
	Mar. 31, 2016
Acquisition of New York Code and Design Academy [Abstract]
Acquisition of New York Code and Design Academy	3. Acquisition of New York Code and Design Academy On January 13, 2016, the Company acquired all of the outstanding stock of New York Code and Design Academy, Inc. (“NYCDA”), a provider of non-degree information technology curriculum primarily based in the New York City area (the “Acquisition”). The Acquisition supports the Company’s strategy to complement its traditional degree offerings with a broader platform of educational services. The Company incurred transaction costs of approximately $0.2 million, and these costs are included in general and administrative costs in the consolidated statements of income. The acquisition is accounted for as a business combination. The purchase price includes $2.4 million paid up front in cash, plus contingent cash payments of (a) up to $12.5 million payable based on NYCDA’s results of operations over a five-year period (the “Earnout”), (b) $5.0 million payable based on NYCDA’s receipt of a state regulatory permit, and (c) $0.5 million payable based on NYCDA’s receipt of another state regulatory permit. Pursuant to the Acquisition, $1.0 million of the Earnout may be accelerated upon receipt of one of the state regulatory permits. In April 2016, NYCDA received one of the state regulatory permits and the Company paid $6.0 million of contingent consideration to the sellers. In addition, the Company paid a total of $4.6 million to two of NYCDA’s founders who are required to remain employed for at least three years from the acquisition date. If either of them terminates employment voluntarily, or is terminated for cause (as defined), he is required to reimburse the Company his respective portion of the retention amount. This amount is classified as prepaid compensation and is amortized to compensation expense over three years. Total potential cash payments for the acquisition and the retention amount are $25.0 million. The Company determined the preliminary fair values of the assets acquired and liabilities assumed at the date of the Acquisition. The allocation of the purchase price is based on preliminary estimates and assumptions, and is subject to revision based on final analysis that support the underlying estimates, which will be completed within the measurement period of up to 12 months from the date of the Acquisition. Accordingly, the allocation is subject to change and the impact of such changes could be material. The allocation of the purchase price is as follows: Purchase Price Allocation Useful Life Cash $ 790 Other assets 1,265 Intangibles: Trade name 5,660 Indefinite Goodwill 14,242 Liabilities assumed (5,032 ) Total assets acquired and liabilities assumed, net 16,925 Less: contingent consideration (14,500 ) Less: cash acquired (790 ) Cash paid for acquisition, net of cash acquired $ 1,635 The fair value of the contingent consideration was measured by applying a probability weighted discounted cash flow model based on significant inputs not observable in the market (Level 3 inputs). Key assumptions include a discount rate of 4.5% and expected future value of payments of $12.5 million, based on management’s assessment that NYCDA will achieve its performance targets after the five-year measurement period. The fair value of assets acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use while employing the concept of highest and best use of the respective items. The following assumptions were used, the majority of which include significant unobservable inputs (Level 3), and valuation methodologies to determine fair value: ● Intangibles – Income approaches were used to value the substantial majority of the acquired intangibles. The trade name was valued using the relief from-royalty method, which represents the benefit of owning these intangible assets rather than paying royalties for their use. ● Other assets and liabilities – The carrying value of all other assets and liabilities approximated fair value at the time of acquisition.

Restructuring and Related Charg

Restructuring and Related Charges	3 Months Ended
	Mar. 31, 2016
Restructuring and Related Charges [Abstract]
Restructuring and Related Charges	4. Restructuring and Related Charges In October 2013, the Company implemented a restructuring to better align the Company’s resources with student enrollments at the time. This restructuring included the closing of 20 physical locations and reductions in the number of campus-based and corporate employees. A liability for lease obligations, some of which continue through 2022, was recorded and is measured at fair value using a discounted cash flow approach encompassing significant unobservable inputs (Level 3). The estimation of future cash flows includes non-cancelable contractual lease costs over the remaining terms of the leases discounted at the Company’s marginal borrowing rate of 4.5%, partially offset by estimated future sublease rental income discounted at credit-adjusted rates. The Company’s estimates, which involve significant judgment, also consider the amount and timing of sublease rental income based on subleases that have been executed and subleases expected to be executed based on current commercial real estate market data and conditions, and other qualitative factors specific to the facilities. The estimates are subject to adjustment as market conditions change or as new information becomes available, including the execution of additional sublease agreements. The following details the changes in the Company’s restructuring liability for lease and related costs during the three months ended March 31, 2015 and 2016 (in thousands): March 31, 2015 March 31, 2016 Balance at beginning of period (1) $ 27,283 $ 20,055 Adjustments (2) 112 (1,526 ) Payments (1,765 ) (1,535 ) Balance at end of period (1) $ 25,630 $ 16,994 (1) The current portion of restructuring liabilities was $4.8 million and $5.1 million as of December 31, 2015 and March 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities. (2) Adjustments include accretion of interest on lease costs, partially offset by changes in the timing and expected income from sublease agreements.

Fair Value Measurement

Fair Value Measurement	3 Months Ended
	Mar. 31, 2016
Fair Value Measurement [Abstract]
Fair Value Measurement	5. Fair Value Measurement Assets and liabilities measured at fair value on a recurring basis consist of the following as of March 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable March 31, Assets/Liabilities Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 100 $ 100 $ — $ — Total assets at fair value on a recurring basis $ 100 $ 100 $ — $ — Liabilities: Other long-term liabilities: Deferred payments $ 12,473 $ — $ — $ 12,473 Total liabilities at fair value on a recurring basis $ 12,473 $ — $ — $ 12,473 Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 100 $ 100 $ — $ — Total assets at fair value on a recurring basis $ 100 $ 100 $ — $ — Liabilities: Other long-term liabilities: Deferred payments $ 3,278 $ — $ — $ 3,278 Total liabilities at fair value on a recurring basis $ 3,278 $ — $ — $ 3,278 The Company measures the above items on a recurring basis at fair value as follows: ● Money market funds - Classified in Level 1 is excess cash the Company holds in both taxable and tax-exempt money market funds and are included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheets. The Company records any net unrealized gains and losses for changes in fair value as a component of Accumulated other comprehensive income in stockholders' equity. The Company's cash and cash equivalents held at December 31, 2015 and March 31, 2016, approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments. ● Deferred payments - The Company acquired certain assets and entered into deferred payment arrangements with the sellers, which are classified within Level 3 as there is no liquid market for similarly priced instruments. The deferred payments are valued using a discounted cash flow model that encompasses significant unobservable inputs to estimate the operating results of the acquired assets. The assumptions used to prepare the discounted cash flows include estimates for interest rates, enrollment growth, retention rates, obtaining regulatory approvals for expansion into new markets, and pricing strategies. These assumptions are subject to change as the underlying data sources evolve and the programs mature. The Company’s lease loss liability incorporates an assessment of current sublease market conditions and uses Level 3 inputs, but is not deemed a fair value liability as the future lease payments are required to be discounted using the Company’s incremental borrowing rate at the date of lease abandonment without subsequent adjustment. See Note 4 for further discussion of the Company’s lease loss liability. The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods, and no assets or liabilities were transferred between levels of the fair value hierarchy during the three months ended March 31, 2015 or 2016. Changes in the fair value of the Company’s Level 3 liabilities during the three months ended March 31, 2016 are as follows (in thousands): Deferred Payments Balance at December 31, 2015 $ 3,278 Amounts earned (232 ) Contingent consideration in connection with NYCDA acquisition 9,125 Adjustments to fair value 302 Balance at March 31, 2016 $ 12,473

Long Term Debt

Long Term Debt	3 Months Ended
	Mar. 31, 2016
Long Term Debt [Abstract]
Long Term Debt	6. Long Term Debt On July 2, 2015, the Company entered into an amended credit facility (the “Amended Credit Facility”) which provides for a revolving line of credit (the “Revolver”) up to $150 million and provides the Company with an option, under certain conditions, to increase the commitments under the Revolver or establish one or more incremental term loans in an amount up to $50 million in the aggregate in the future. The maturity date of the Amended Credit Facility is July 2, 2020. The Amended Credit Facility replaced the Company’s prior credit agreement (the “Prior Credit Agreement”), dated November 8, 2012, which had provided for both a term loan and revolving line of credit and an original maturity date of December 31, 2016. All amounts outstanding under the Prior Credit Agreement were repaid upon execution of the Amended Credit Facility. The Company paid approximately $0.9 million in debt financing costs associated with the Amended Credit Facility. Borrowings under the Revolver will bear interest at a per annum rate equal to, at the Company’s election, LIBOR or a base rate, plus a margin ranging from 1.75% to 2.25%, depending on the Company’s leverage ratio. The Company also is subject to a quarterly unused commitment fee ranging from 0.25% to 0.35% per annum, depending on the Company’s leverage ratio, times the daily unused amount under the Revolver. All other remaining terms of the Prior Credit Agreement remain in full force and effect. The Amended Credit Facility is guaranteed by the University and is secured by substantially all of the personal property and assets of the Company and its subsidiaries. The Amended Credit Facility contains customary affirmative and negative covenants, representations, warranties, events of default and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Amended Credit Facility. In addition, as with the Prior Credit Agreement, the Amended Credit Facility requires that the Company satisfy certain financial maintenance covenants, including: ● A leverage ratio of not greater than 2 to 1. Leverage ratio is defined as the ratio of total debt to trailing four-quarter EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges such as stock-based compensation). ● A coverage ratio of not less than 1.75 to 1. Coverage ratio is defined as the ratio of trailing four-quarter EBITDA and rent expense to trailing four-quarter interest and rent expense. ● A Department of Education Financial Responsibility Composite Score of not less than 1.5. The Company was in compliance with all the terms of the Amended Credit Facility as of March 31, 2016. During the three months ended March 31, 2016 and 2015, the Company paid cash interest of $0.1 million and $1.1 million, respectively. The Company had no balance outstanding under the Revolver as of March 31, 2016.

Stock Options, Restricted Stock

Stock Options, Restricted Stock and Restricted Stock Units	3 Months Ended
	Mar. 31, 2016
Stock Options, Restricted Stock and Restricted Stock Units [Abstract]
Stock Options, Restricted Stock and Restricted Stock Units	7. Stock Options, Restricted Stock and Restricted Stock Units On May 5, 2015, the Company’s shareholders approved the Strayer Education, Inc. 2015 Equity Compensation Plan (the “2015 Plan”), which provides for the granting of restricted stock, restricted stock units, stock options intended to qualify as incentive stock options, options that do not qualify as incentive stock options, and other forms of equity compensation and performance-based awards to employees, officers and directors of the Company, or to a consultant or advisor to the Company, at the discretion of the Board of Directors. Vesting provisions are 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 awards granted under the 2015 Plan is ten years. The number of shares of common stock reserved for issuance under the 2015 Plan is 500,000 authorized but unissued shares, plus the number of shares available for grant under the Company’s previously existing equity compensation plans at the time of stockholder approval of the 2015 Plan, and plus the number of shares which may in the future become available under any previously existing equity compensation plan due to forfeitures of outstanding awards. In February 2016, the Company’s Board of Directors approved grants of 176,802 shares of restricted stock to certain employees. These shares, which vest over a two to four year period, were granted pursuant to the 2015 Plan. The Company’s stock price closed at $50.67 on the date of these restricted stock grants. Dividends paid on unvested restricted stock are reimbursed to the Company if the recipient forfeits his or her shares as a result of termination of employment prior to vesting in the award, unless waived by the Board of Directors. Restricted Stock and Restricted Stock Units The table below sets forth the restricted stock and restricted stock units activity for the three months ended March 31, 2016: Number shares or units Weighted- Balance, December 31, 2015 634,327 $ 104.66 Grants 176,802 50.67 Vested shares (6,588 ) 62.28 Forfeitures — — Balance, March 31, 2016 804,541 $ 93.98 Stock Options The table below sets forth the stock option activity and other stock option information as of and for the three months ended March 31, 2016: Weighted- average Weighted- remaining Aggregate Number average contractual intrinsic value (1) shares exercise life (years) (in thousands) Balance, December 31, 2015 100,000 $ 51.95 5.1 $ 817 Grants — — Exercises — — Forfeitures/Expirations — — Balance, March 31, 2016 100,000 $ 51.95 4.8 $ — Exercisable, March 31, 2016 100,000 $ 51.95 4.8 $ — (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 respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock. Valuation and Expense Information under Stock Compensation Topic ASC 718 At March 31, 2016, total stock-based compensation cost which has not yet been recognized was $31.2 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 33 months on a weighted-average basis. Awards of approximately 606,000 shares of restricted stock and restricted stock units are subject to performance conditions. The accrual for stock-based compensation for performance awards is based on the Company’s estimates that such performance criteria are probable of being achieved over the respective vesting periods. Such a determination involves significant judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the respective vesting period, or it is determined it is more likely than not that the performance criteria will not be achieved, related compensation expense is adjusted. The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three months ended March 31, 2015 and 2016 (in thousands): For the three months ended March 31, 2015 2016 Instruction and educational support $ 367 $ 651 Marketing — — Admissions advisory — — General and administration 2,084 2,240 Stock-based compensation expense included in operating expense 2,451 2,891 Tax benefit 956 1,099 Stock-based compensation expense, net of tax $ 1,495 $ 1,792 During the three months ended March 31, 2016 the Company recognized a tax shortfall related to share-based payment arrangements of approximately $50,000. No stock options were exercised during the three months ended March 31, 2016 or 2015.

Other Long-Term Liabilities

Other Long-Term Liabilities	3 Months Ended
	Mar. 31, 2016
Other Long-Term Liabilities [Abstract]
Other Long-Term Liabilities	8. Other Long-Term Liabilities Other long-term liabilities consist of the following (in thousands): December 31, 2015 March 31, 2016 Deferred payments related to acquisitions $ 6,078 $ 20,773 Deferred revenue, net of current portion 14,429 12,221 Loss on facilities not in use 15,229 11,888 Deferred rent and other facility costs 8,993 9,112 Lease incentives 3,125 3,035 Deferred gain on sale of campus building 133 62 $ 47,987 $ 57,091 Deferred Payments Related to Acquisitions In the first quarter of 2016, the Company acquired NYCDA and entered into deferred payment arrangements with the sellers in connection with this transaction. The deferred payment arrangements of up to $18.0 million are valued at approximately $14.6 million as of March 31, 2016. In April 2016, NYCDA received one of its regulatory permits and the Company subsequently paid $6.0 million of deferred payments to the sellers. See Note 3 for further information on the NYCDA deferred payments. In 2011, the Company acquired certain assets and entered into deferred payment arrangements with the sellers in connection with that acquisition. The deferred payment arrangements are valued at approximately $3.3 million as of both December 31, 2015 and March 31, 2016. In addition, one of the sellers contributed $2.8 million to the Company representing the seller’s continuing interest in the assets acquired. Deferred Revenue The Company provides for certain scholarship and awards programs, such as the Graduation Fund (see Note 2 for additional information), that are earned by students when they successfully complete course requirements. The Company also has licensed certain of its non-credit bearing course content to a third party. Included in long-term deferred revenue is the amount of revenue under these arrangements that the Company expects will be realized after one year. Loss on Facilities Not in Use and Deferred Rent and Other Facility Costs The Company records a liability for lease costs of campuses and non-campus facilities that are not currently in use (see Note 3). For facilities still in use, 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 liability. Lease Incentives In conjunction with the opening of new campuses or renovating existing ones, the Company, in some instances, was reimbursed by the lessors for improvements made to the leased properties. In accordance with ASC 840-20, the underlying assets were capitalized as leasehold improvements and a liability was established for the reimbursements. The leasehold improvements and the liability are amortized on a straight-line basis over the corresponding lease terms, which generally range from five to 10 years. Deferred Gain on Sale of Campus Building In June 2007, the Company sold one of its campus buildings for $5.8 million. The Company is leasing back most of the campus building over a 10-year period. In conjunction with this sale and lease back transaction, the Company realized a gain of $2.8 million before tax, which is deferred and recognized over the 10-year lease term.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Taxes [Abstract]
Income Taxes	9. Income Taxes The Company had $0.1 million of unrecognized tax benefits at March 31, 2016, all of which resulted from tax positions taken prior to the year ended December 31, 2015. The Company recognized approximately $0.3 million of benefits in the three months ended March 31, 2016. The Company also recorded approximately $0.1 million of expense in the three months ended March 31, 2016, related to interest and penalties. It is reasonably possible that approximately $0.1 million of unrecognized tax benefits will be reduced in the next twelve months due to expiration of the applicable statutes of limitations, which would favorably affect the Company’s effective tax rate if recognized. If amounts accrued are less than amounts ultimately assessed by taxing authorities, the Company would record additional income tax expense. The Company does not anticipate significant changes to other unrecognized tax benefits. The Company paid $3.7 million and $0.2 million in income taxes during the three months ended March 31, 2016 and 2015, respectively.

Litigation

Litigation	3 Months Ended
	Mar. 31, 2016
Litigation [Abstract]
Litigation	10. Litigation From time to time, the Company is involved in litigation and other legal proceedings arising out of the ordinary course of its business. There are no pending material legal proceedings to which the Company or its property are subject.

Regulation

Regulation	3 Months Ended
	Mar. 31, 2016
Regulation [Abstract]
Regulation	11. Regulation Gainful Employment The Company, the University, and NYCDA are subject to significant state and regulatory oversight, as well as federal oversight in the case of the Company and the University. The Department of Education (the “Department”) previously attempted to define “an eligible program of training to prepare students for gainful employment in a recognized occupation.” After a federal court invalidated the Department’s regulation, the Department established a negotiated rulemaking committee to consider the issue of gainful employment. The negotiations did not result in the required consensus. On March 25, 2014, the Department issued a Notice of Proposed Rulemaking for public comment, and on October 31, 2014, the Department published the final regulation which became effective on July 1, 2015. The new requirements, applicable to the University but not NYCDA, include two debt-to-earnings measures, consisting of an annual earnings rate and a discretionary income rate. The annual earnings rate is calculated by comparing (1) the annual loan payment required on the median student loan debt incurred by students receiving Title IV funds who completed a particular program and (2) the higher of the mean or median of those graduates’ annual earnings two to four years after graduation. The discretionary income rate is calculated by comparing (1) the annual loan payment required on the median student loan debt incurred by students receiving Title IV funds who completed a particular program and (2) the higher of the mean or median annual earni ngs of those graduates two to four years after graduation, less 1.5 times the government issued Poverty Guideline. Under the new gainful employment regulation, a program would pass if: ● the annual loan payment required on the median student loan debt is less than or equal to 8% of the higher of the mean or median annual earnings of graduates in the relevant period; or ● the annual loan payment required on the median student loan debt is less than or equal to 20% of the discretionary income of graduates in the relevant period. In addition, a program that does not pass either of the debt-to-earnings metrics, and that has an annual earnings rate between 8% and 12%, or a discretionary income rate between 20% and 30%, would be considered to be in a warning zone. A program would fail if the program’s graduates have an annual earnings rate of 12% or greater and a discretionary income rate of 30% or greater. A program would become Title IV-ineligible for three years if it fails both metrics for two out of three consecutive years, or fails to pass at least one metric for four consecutive award years. If an institution is notified by the Secretary of Education that a program could become ineligible, based on its final rates, for the next award year: ● The institution must provide a warning with respect to the program to students and prospective students indicating, among other things, that students may not be able to use Title IV funds to attend or continue in the program; and ● The institution must not enroll, register or enter into a financial commitment with a prospective student until a specified time after providing the warning to the prospective student. The new regulation also requires institutions to report student and program level data to the Department, and comply with additional disclosure requirements beginning in January 2017. In addition, the gainful employment regulation required institutions to certify by December 31, 2015, among other things, that each eligible gainful employment program is programmatically accredited if required by a federal governmental entity or a state governmental entity in the state in which it is located or is otherwise required to obtain state approval, and that each eligible program satisfies the applicable educational prerequisites for professional licensure or certification requirements in each state in which it is located or is otherwise required to obtain state approval, so that a student who completes the program and seeks employment in that state qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter. The Company timely made the required certification. The requirements associated with the gainful employment regulations may substantially increase the Company’s administrative burdens and could affect student enrollment, persistence and retention. Further, although the regulations provide opportunities for an institution to correct any potential deficiencies in a program prior to the loss of Title IV eligibility, the continuing eligibility of the University’s academic programs will be affected by factors beyond management’s control such as changes in the University’s graduates’ income levels, changes in student borrowing levels, increases in interest rates, changes in the percentage of former students who are current in the repayment of their student loans, and various other factors. Even if the Company were able to correct any deficiency in the gainful employment metrics in a timely manner, the disclosure requirements associated with a program’s failure to meet at least one metric may adversely affect student enrollments in that program and may adversely affect the reputation of the University. The Clery Act Strayer University must comply with the campus safety and security reporting requirements as well as other requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, or Clery Act, including recent changes made to the Clery Act by the Violence Against Women Reauthorization Act of 2013, which was signed into law on March 7, 2013. On April 1, 2014, a negotiated rulemaking committee reached consensus on proposed regulations, and on October 20, 2014, the Department promulgated regulations implementing the recent amendments to the Clery Act. In addition, the Department has interpreted Title IX to categorize sexual violence as a form of prohibited sex discrimination and to require institutions to follow certain disciplinary procedures with respect to such offenses. Failure to comply with the Clery Act or Title IX requirements or regulations thereunder could result in action by the Department to require correction action, fine the Company or limit or suspend its participation in Title IV programs, could lead to litigation, and could harm the Company’s reputation. The Company is in compliance with these requirements. Compliance Reviews Strayer University is subject to announced and unannounced compliance reviews and audits by various external agencies, including the Department, its Office of Inspector General, state licensing agencies, and accrediting agencies. The Department conducted four campus-based program reviews of Strayer University campuses in three states and the District of Columbia, with one on-site review conducted August 18-20, 2014; one on-site review conducted September 8-11, 2014; and two on-site reviews conducted September 22-26, 2014. The reviews covered federal financial aid years 2012-2013 and 2013-2014, and two of the reviews also covered compliance with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, the Drug-Free Schools and Communities Act, and regulations related thereto. On October 21, 2014, the Department issued an Expedited Final Program Review Determination Letter for one of the program reviews conducted the week of September 22, 2014, closing the program review with no further action required by the Company. On November 17, 2014, the Company received a Program Review Report for the program review conducted in August 2014, and provided a response to the Department on December 15, 2014. On January 7, 2015, the Company received a Final Program Review Determination letter from that review, closing the review with no further action required by the Company. On March 24, 2015, the Company received a Program Review Report for another program review, and provided a response to the Department on April 21, 2015. On April 29, 2015, the Company received a Final Program Review Determination Letter closing the review and identifying a payment of less than $500 due to the Department of Education based on an underpayment on a return to Title IV calculation. The Company remitted payment, and received a letter from the Department on May 26, 2015, indicating that no further action was required and that the matter was closed. On September 15, 2015, the Company received a Program Review report for the final program review, and provided a response to the Department on October 5, 2015. On January 5, 2016 the Company received a Final Program Review Determination letter for the final program review, indicating that the program review was closed and no further action was required. Program Participation Agreement Each institution participating in Title IV programs must enter into a Program Participation Agreement with the Department. Under the agreement, the institution agrees to follow the Department’s rules and regulations governing Title IV programs. On October 1, 2014, Strayer University received an executed provisional Program Participation Agreement from the Department allowing it to participate in Title IV programs until June 30, 2017. The Program Participation Agreement was issued on a provisional basis because of the Department’s program reviews open at the time of issuance. Under the provisional agreement, the only material additional condition that the University must comply with is obtaining Department approval for substantial changes, including the addition of any new location, level of academic offering, non-degree program, or degree program. NYCDA NYCDA is licensed by the New York Bureau of Proprietary School Supervision, but is not accredited, does not participate in state or federal student financial aid programs, and is not subject to the regulatory requirements applicable to accredited schools and schools that participate in such financial aid programs. Programs such as those offered by NYCDA are regulated by each individual state, and the Company is in the process of seeking additional state authorizations to offer NYCDA programs.

Significant Accounting Polici19

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Significant Accounting Policies [Abstract]
Financial Statement Presentation	Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the University and NYCDA. On January 13, 2016, the Company acquired all of the outstanding stock of NYCDA, and the results of NYCDA are included with the Company from the acquisition date. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. All information as of December 31, 2015 and March 31, 2015 and 2016, and for the three months ended March 31, 2015 and 2016 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated financial position, results of operations, and cash flows of the Company. Certain amounts in the prior period financial statements have been reclassified to conform to the current period’s presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year.
Revenue Recognition	Revenue Recognition The Company’s educational programs typically are offered on a quarterly basis and such periods coincide with the Company’s quarterly financial reporting periods. Approximately 95% of the Company’s revenues during the three months ended March 31, 2016 consisted of tuition revenue, which is recognized in the quarter of instruction. Tuition revenue is assessed for collectibility on a student-by-student basis throughout the quarter of instruction, and is shown net of any refunds, withdrawals, corporate discounts, scholarships and employee tuition discounts. This collectibility assessment considers available sources of funds for the student including Federal Financial Student Aid programs. The Company reassesses the collectibility of tuition revenue that it may earn based on new information and changes in the facts and circumstances relevant to a student’s ability to pay, including the timing of a student’s withdrawal from a program of study. At the start of each academic term or program, a liability (deferred revenue) is recorded for academic services to be provided and a tuition receivable is recorded for the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as deferred revenue. Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion behavior. Deferred revenue is recorded as a current or long-term liability in the consolidated balance sheets based on when the benefit is expected to be realized. Revenues also include textbook-related income, certificate revenue, certain academic fees, licensing revenue, and other income, which are recognized when earned. The Company’s refund policy typically permits students who complete less than half of a course to receive a partial refund of tuition for that course. Refunds reduce the tuition revenue that would have otherwise been recognized for that student. Since the University’s academic terms coincide with the Company’s financial reporting periods, nearly all refunds are processed and recorded within the same quarter as the corresponding revenue. The amount of tuition revenue refundable to students may vary based on the student’s state of residence. Unused books and related academic materials may be returned for a full refund within 21 days of the start of class; however, purchases of electronic content are not refundable if downloaded. Revenues derived from fees are not eligible for a refund.
Graduation Fund	Graduation Fund In the third quarter of 2013, the Company introduced the Graduation Fund, which allows new undergraduate students to earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. New students registering in credit-bearing courses in any undergraduate program for the summer 2013 term (fiscal third quarter) and subsequent terms qualify for the Graduation Fund. Students must meet all of the University’s admission requirements, and must be enrolled in an undergraduate degree program. The Company’s employees and their dependents are not eligible for the program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by the University in the future. In their final academic year, qualifying students will receive one free course for every three courses that were successfully completed. Revenue from students participating in the Graduation Fund is recorded in accordance with the Revenue Recognition Topic, ASC 605-50. The Company defers the value of benefits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit. The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs. Each quarter, the Company assesses its methodologies and assumptions underlying these estimates and, to date, any adjustments to the estimates have not been material. The amount estimated to be redeemed in the next twelve months is $14.4 million and is included in deferred revenue as a current liability in the unaudited condensed consolidated balance sheets. The table below presents activity in the Graduation Fund for the three months ended March 31, 2015 and 2016 (in thousands): March 31, 2015 March 31, 2016 Balance at beginning of period $ 9,706 $ 20,937 Revenue deferred 3,603 5,564 Benefit redeemed (634 ) (3,236 ) Balance at end of period $ 12,675 $ 23,265
Restricted Cash	Restricted Cash A significant portion of the Company’s revenues are funded by various federal and state government programs. The Company generally does not receive funds from these programs prior to the start of the corresponding academic term. The Company may be required to return certain funds for students who withdraw from the University during the academic term. There were no amounts payable for these obligations at March 31, 2016 or December 31, 2015. As part of commencing operations in Pennsylvania in 2003, the Company was required to maintain a “minimum protective endowment” of at least $0.5 million in an interest-bearing account. These funds are required as long as the Company operates its campuses in the state. The Company holds these funds in an interest-bearing account which is included in other assets.
Tuition Receivable and Allowance for Doubtful Accounts	Tuition Receivable and Allowance for Doubtful Accounts The Company records tuition receivable and deferred revenue for its students upon the start of the academic term or program. Therefore, at the end of the quarter (and academic term), tuition receivable represents amounts due from students for educational services already provided and deferred revenue generally represents advance payments from students for academic services to be provided in the future. Tuition receivables are not collateralized; however, credit risk is minimized as a result of the diverse nature of the University’s student base. An allowance for doubtful accounts is established primarily based upon historical collection rates by age of receivable, net of estimated recoveries. These collection rates incorporate historical performance based on a student’s current enrollment status and likelihood of future enrollment. The Company periodically assesses its methodologies for estimating bad debts in consideration of actual experience. The Company’s tuition receivable and allowance for doubtful accounts were as follows as of December 31, 2015 and March 31, 2016 (in thousands): December 31, 2015 March 31, 2016 Tuition receivable $ 28,543 $ 28,839 Allowance for doubtful accounts (10,024 ) (10,226 ) Tuition receivable, net $ 18,519 $ 18,613 Approximately $2.0 million of tuition receivable is included in other assets as of both December 31, 2015 and March 31, 2016, because these amounts are expected to be collected after 12 months. The following table illustrates changes in the Company’s allowance for doubtful accounts for the three months ended March 31, 2015 and 2016 (in thousands): For the three months ended March 31, 2015 2016 Allowance for doubtful accounts, beginning of period $ 8,835 $ 10,024 Additions charged to expense 3,470 3,068 Write-offs, net of recoveries (3,617 ) (2,866 ) Allowance for doubtful accounts, end of period $ 8,688 $ 10,226
Fair Value	Fair Value The Fair Value Measurement Topic, ASC 820-10 (“ASC 820-10”), establishes a framework for measuring fair value, establishes a fair value hierarchy based upon the observability of inputs used to measure fair value, and expands disclosures about fair value measurements. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Under ASC 820-10, fair value of an investment is the price that would be received to sell an asset or to transfer a liability to an entity in an orderly transaction between market participants at the measurement date. The hierarchy gives the highest priority to assets and liabilities with readily available quoted prices in an active market and lowest priority to unobservable inputs which require a higher degree of judgment when measuring fair value, as follows: ● Level 1 assets or liabilities use quoted prices in active markets for identical assets or liabilities as of the measurement date; ● Level 2 assets or liabilities use observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities; and ● Level 3 assets or liabilities use unobservable inputs that are supported by little or no market activity. The Company’s assets and liabilities that are subject to fair value measurement are categorized in one of the three levels above. Fair values are based on the inputs available at the measurement dates, and may rely on certain assumptions that may affect the valuation of fair value for certain assets or liabilities.
Goodwill and Indefinite-Lived Intangible Assets	Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Indefinite-lived intangible assets, which include trade names, are recorded at fair market value on their acquisition date. An indefinite life was assigned to the trade names because they have the continued ability to generate cash flows indefinitely. Goodwill and the indefinite-lived intangible asset are assessed at least annually for impairment during the three-month period ending September 30, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. Under Accounting Standards Update No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment
Accounting for Derivative Instruments and Hedging Activities	Accounting for Derivative Instruments and Hedging Activities On the date that the Company enters into a derivative contract, it designates the derivative as a hedge of (a) a forecasted transaction or (b) the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge). All derivatives are recognized in the balance sheet at their fair value. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded, net of income tax, in other comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company also formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company discontinues hedge accounting prospectively.
Authorized Stock	Authorized Stock The Company has authorized 20,000,000 shares of common stock, par value $.01, of which 11,027,177 and 11,153,979 shares were issued and outstanding as of December 31, 2015 and March 31, 2016, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which has been issued or outstanding since 2004. Before any preferred stock may be issued in the future, the Board of Directors would need to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock.
Stock-Based Compensation	Stock-Based Compensation As required by the Stock Compensation Topic, ASC 718, the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, restricted stock, restricted stock units, and employee stock purchases related to the Company’s Employee Stock Purchase Plan, based on estimated fair values. Stock-based compensation expense recognized in the Consolidated Statements of Income for each of the three months ended March 31, 2015 and 2016 is based on awards ultimately expected to vest and, therefore, has been adjusted for estimated forfeitures. The Company is required to estimate forfeitures at the time of grant and revise the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate used is based on historical experience. The Company also assesses the likelihood that performance criteria associated with performance-based awards will be met. If it is determined that it is more likely than not that performance criteria will not be achieved, the Company revises its estimate of the number of shares it believes will ultimately vest.
Net Income Per Share	Net Income Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options, restricted stock and restricted stock units. The dilutive effect of stock awards was determined using the treasury stock method. Under the treasury stock method, all of the following are assumed to be used to repurchase shares of the Company’s common stock: (1) the proceeds received from the exercise of stock options, (2) the amount of compensation cost associated with the stock awards for future service not yet recognized by the Company, and (3) the amount of tax benefits that would be recorded in additional paid-in capital when the stock awards become deductible for income tax purposes. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. During the three months ended March 31, 2016, the Company had no issued and outstanding stock options that were excluded from the calculation. Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three months ended March 31, 2015 and 2016 (in thousands): For the three months ended March 31, 2015 2016 Weighted average shares outstanding used to compute basic earnings per share 10,579 10,596 Incremental shares issuable upon the assumed exercise of stock options 19 — Unvested restricted stock 140 186 Shares used to compute diluted earnings per share 10,738 10,782
Income Taxes	Income Taxes The Company provides for deferred income taxes based on temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect in the year in which the differences are expected to reverse. The Income Taxes Topic, ASC 740, requires the company to determine whether uncertain tax positions should be recognized within the Company’s financial statements. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined to be more likely than not to be sustained upon examination. Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained. The tax years 2013-2015 remain open for Federal tax examination and the tax years 2012-2015 remain open to examination by state and local taxing jurisdictions in which the Company is subject.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported. The most significant management estimates included allowances for doubtful accounts, the useful lives of property and equipment, fair value of future contractual operating lease obligations, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill, intangible assets and the interest rate swap arrangement, and the provision for income taxes. Actual results could differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30)” (“ASU 2015-03”). The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted ASU 2015-03 effective January 1, 2016 and there was no material effect on its condensed consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The Company adopted ASU 2015-17 effective January 1, 2016 and reclassified approximately $6.4 million from current to non-current assets in the condensed consolidated balance sheet as of December 31, 2015 to conform to the current period presentation. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The new guidance requires the recognition of right-of-use assets and lease liabilities on the balance sheet for most leases. Under current guidance, operating leases are off-balance sheet. ASU 2016-02 also requires more extensive quantitative and qualitative disclosures about leasing arrangements. ASU 2016-02 applies to fiscal periods beginning after December 15, 2018, using the modified retrospective method, with early adoption permitted. The Company anticipates that the impact of ASU 2016-02 on its consolidated balance sheet will be material as the Company will record significant asset and liability balances in connection with its leased properties. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 impacts several aspects of the accounting for share-based payment transactions, including classification of certain items on the consolidated statement of cash flows and accounting for income taxes. Specifically, ASU 2016-09 requires excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in earnings, which could introduce significant volatility to the Company’s provision for income taxes. In addition, ASU 2016-09 allows companies to recognize the impact of stock award forfeitures at the time of forfeiture, rather than as an estimate ratably over the life of awards. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The transition method varies for each of the areas in ASU 2016-09. The Company is currently evaluating the impact of ASU 2016-09 on its Consolidated Financial Statements and has not yet selected a transition date. Other ASUs issued through March 2016 by the FASB but not yet effective are not expected to have a material effect on the Company’s Consolidated Financial Statements.

Significant Accounting Polici20

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Significant Accounting Policies [Abstract]
Schedule of graduation fund liability	March 31, 2015 March 31, 2016 Balance at beginning of period $ 9,706 $ 20,937 Revenue deferred 3,603 5,564 Benefit redeemed (634 ) (3,236 ) Balance at end of period $ 12,675 $ 23,265
Schedule of tuition receivable and allowance for doubtful accounts	December 31, 2015 March 31, 2016 Tuition receivable $ 28,543 $ 28,839 Allowance for doubtful accounts (10,024 ) (10,226 ) Tuition receivable, net $ 18,519 $ 18,613
Schedule of allowance for doubtful accounts	For the three months ended March 31, 2015 2016 Allowance for doubtful accounts, beginning of period $ 8,835 $ 10,024 Additions charged to expense 3,470 3,068 Write-offs, net of recoveries (3,617 ) (2,866 ) Allowance for doubtful accounts, end of period $ 8,688 $ 10,226
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share	For the three months ended March 31, 2015 2016 Weighted average shares outstanding used to compute basic earnings per share 10,579 10,596 Incremental shares issuable upon the assumed exercise of stock options 19 — Unvested restricted stock 140 186 Shares used to compute diluted earnings per share 10,738 10,782

Acquisition of New York Code 21

Acquisition of New York Code and Design Academy (Tables)	3 Months Ended
	Mar. 31, 2016
Acquisition of New York Code and Design Academy [Abstract]
Summary of purchase price allocated to assets acquired and liabilities assumed at fair value	Purchase Price Allocation Useful Life Cash $ 790 Other assets 1,265 Intangibles: Trade name 5,660 Indefinite Goodwill 14,242 Liabilities assumed (5,032 ) Total assets acquired and liabilities assumed, net 16,925 Less: contingent consideration (14,500 ) Less: cash acquired (790 ) Cash paid for acquisition, net of cash acquired $ 1,635

Restructuring and Related Cha22

Restructuring and Related Charges (Tables)	3 Months Ended
	Mar. 31, 2016
Restructuring and Related Charges [Abstract]
Schedule of restructuring liability by type of cost	March 31, 2015 March 31, 2016 Balance at beginning of period (1) $ 27,283 $ 20,055 Adjustments (2) 112 (1,526 ) Payments (1,765 ) (1,535 ) Balance at end of period (1) $ 25,630 $ 16,994 (1) The current portion of restructuring liabilities was $4.8 million and $5.1 million as of December 31, 2015 and March 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities. (2) Adjustments include accretion of interest on lease costs, partially offset by changes in the timing and expected income from sublease agreements.

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Measurement [Abstract]
Schedule of assets and liabilities measured at fair value on a recurring basis	Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable March 31, Assets/Liabilities Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 100 $ 100 $ — $ — Total assets at fair value on a recurring basis $ 100 $ 100 $ — $ — Liabilities: Other long-term liabilities: Deferred payments $ 12,473 $ — $ — $ 12,473 Total liabilities at fair value on a recurring basis $ 12,473 $ — $ — $ 12,473 Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable December 31, Assets/Liabilities Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 100 $ 100 $ — $ — Total assets at fair value on a recurring basis $ 100 $ 100 $ — $ — Liabilities: Other long-term liabilities: Deferred payments $ 3,278 $ — $ — $ 3,278 Total liabilities at fair value on a recurring basis $ 3,278 $ — $ — $ 3,278
Schedule of changes in fair value of level 3 liability	Deferred Payments Balance at December 31, 2015 $ 3,278 Amounts earned (232 ) Contingent consideration in connection with NYCDA acquisition 9,125 Adjustments to fair value 302 Balance at March 31, 2016 $ 12,473

Stock Options, Restricted Sto24

Stock Options, Restricted Stock and Restricted Stock Units (Tables)	3 Months Ended
	Mar. 31, 2016
Stock Options, Restricted Stock and Restricted Stock Units [Abstract]
Schedule of restricted stock and restricted stock units activity	Number shares or units Weighted- Balance, December 31, 2015 634,327 $ 104.66 Grants 176,802 50.67 Vested shares (6,588 ) 62.28 Forfeitures — — Balance, March 31, 2016 804,541 $ 93.98
Schedule of stock option activity and other stock option information	Weighted- average Weighted- remaining Aggregate Number average contractual intrinsic value (1) shares exercise life (years) (in thousands) Balance, December 31, 2015 100,000 $ 51.95 5.1 $ 817 Grants — — Exercises — — Forfeitures/Expirations — — Balance, March 31, 2016 100,000 $ 51.95 4.8 $ — Exercisable, March 31, 2016 100,000 $ 51.95 4.8 $ — (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 respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock.
Schedule of stock-based compensation expense	For the three months ended March 31, 2015 2016 Instruction and educational support $ 367 $ 651 Marketing — — Admissions advisory — — General and administration 2,084 2,240 Stock-based compensation expense included in operating expense 2,451 2,891 Tax benefit 956 1,099 Stock-based compensation expense, net of tax $ 1,495 $ 1,792

Other Long-Term Liabilities (Ta

Other Long-Term Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Other Long-Term Liabilities [Abstract]
Schedule of other long-term liabilities	December 31, 2015 March 31, 2016 Deferred payments related to acquisitions $ 6,078 $ 20,773 Deferred revenue, net of current portion 14,429 12,221 Loss on facilities not in use 15,229 11,888 Deferred rent and other facility costs 8,993 9,112 Lease incentives 3,125 3,035 Deferred gain on sale of campus building 133 62 $ 47,987 $ 57,091

Nature of Operations (Details)

Nature of Operations (Details)	3 Months Ended
	Mar. 31, 2016Segment
Nature of Operations [Abstract]
Number of reporting segments	1

Significant Accounting Polici27

Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of activity in the Graduation Fund
Balance at beginning of period	$ 20,937	$ 9,706
Revenue deferred	5,564	3,603
Benefit redeemed	(3,236)	(634)
Balance at end of period	$ 23,265	$ 12,675

Significant Accounting Polici28

Significant Accounting Policies (Details 1) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Schedule of tuition receivable and allowance for doubtful accounts
Tuition receivable	$ 28,839	$ 28,543
Allowance for doubtful accounts	(10,226)	(10,024)	$ (8,688)	$ (8,835)
Tuition receivable, net	$ 18,613	$ 18,519

Significant Accounting Polici29

Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of allowance for doubtful accounts
Allowance for doubtful accounts, beginning of period	$ 10,024	$ 8,835
Additions charged to expense	3,068	3,470
Write-offs, net of recoveries	(2,866)	(3,617)
Allowance for doubtful accounts, end of period	$ 10,226	$ 8,688

Significant Accounting Polici30

Significant Accounting Policies (Details 3) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of reconciliation of shares used to calculate basic and diluted earnings per share
Weighted average shares outstanding used to compute basic earnings per share	10,596	10,579
Incremental shares issuable upon the assumed exercise of stock options		19
Unvested restricted stock	186	140
Shares used to compute diluted earnings per share	10,782	10,738

Significant Accounting Polici31

Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Significant Accounting Policies (Textual)
Acquisition, of outstanding stock of NYCDA	Jan. 13, 2016
Percentage of tuition revenue in total revenue	95.00%
Unused books and academic material refundable period	21 days
Expected collection period of tuition receivable	After 12 months
Common stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	11,153,979	11,027,177
Common stock, shares outstanding	11,153,979	11,027,177
Preferred stock, shares authorized	8,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Income tax description	Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. A tax position is derecognized if it no longer meets the more likely than not threshold of being sustained.
Graduation fund estimated to be redeemed	$ 14.4
Minimum protective endowment	0.5
Tuition receivable included in other assets	$ 2	$ 2
Current deferred tax asset reclassified		$ 6.4

Acquisition of New York Code 32

Acquisition of New York Code and Design Academy (Details) - USD ($) $ in Thousands	Jan. 13, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Intangibles:
Goodwill		$ 21,042		$ 6,800
Less: contingent consideration		(14,600)
Cash paid for acquisition, net of cash acquired		$ 1,635
New York Code and Design Academy, Inc. ("NYCDA") [Member]
Business Acquisition [Line Items]
Cash	$ 790
Other assets	1,265
Intangibles:
Trade name	5,660
Goodwill	14,242
Liabilities assumed	(5,032)
Total assets acquired and liabilities assumed, net	16,925
Less: contingent consideration	(14,500)
Less: cash acquired	(790)
Cash paid for acquisition, net of cash acquired	$ 1,635
Useful Life, Trade name	Indefinite

Acquisition of New York Code 33

Acquisition of New York Code and Design Academy (Details Textual) - USD ($) $ in Thousands	Jan. 13, 2016	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015
Acquisition of New York Code and Design Academy (Textual)
Payment of contingent consideration			$ 405	$ 300
Management's assessment			Key assumptions include a discount rate of 4.5% and expected future value of payments of $12.5 million, based on management's assessment that NYCDA will achieve its performance targets after the five-year measurement period.
New York Code and Design Academy, Inc. ("NYCDA") [Member]
Acquisition of New York Code and Design Academy (Textual)
Cash paid up front	$ 2,400
Amount payable based on results of operations	12,500
Total cash payments for the acquistion and the retention amount	$ 25,000
Business acquisition operating period	5 years
Transaction costs	$ 200
Business combination contingent consideration description	Pursuant to the Acquisition, $1.0 million of the Earnout may be accelerated upon receipt of one of the state regulatory permits.
New York Code and Design Academy, Inc. ("NYCDA") [Member] | State regulatory permit [Member]
Acquisition of New York Code and Design Academy (Textual)
Contingent cash payments	$ 5,000
New York Code and Design Academy, Inc. ("NYCDA") [Member] | State regulatory permit one [Member]
Acquisition of New York Code and Design Academy (Textual)
Contingent cash payments	500
New York Code and Design Academy, Inc. ("NYCDA") [Member] | Subsequent Event [Member]
Acquisition of New York Code and Design Academy (Textual)
Payment of contingent consideration		$ 6,000
Two of NYCDA's founders [Member]
Acquisition of New York Code and Design Academy (Textual)
Cash paid up front	$ 4,600
Employment term	3 years

Restructuring and Related Cha34

Restructuring and Related Charges (Details) - Lease and related costs [Member] - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Schedule of restructuring liability
Balance at beginning of period	[1]	$ 20,055	$ 27,283
Adjustments	[2]	(1,526)	112
Payments		(1,535)	(1,765)
Balance at end of period	[1]	$ 16,994	$ 25,630
[1]	The current portion of restructuring liabilities was $4.8 million and $5.1 million as of December 31, 2015 and March 31, 2016, respectively, which are included in accounts payable and accrued expenses. The long-term portion is included in other long-term liabilities.
[2]	Adjustments include accretion of interest on lease costs, partially offset by changes in the timing and expected income from sublease agreements.

Restructuring and Related Cha35

Restructuring and Related Charges (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)Campus	Dec. 31, 2015USD ($)
Restructuring and Related Charges (Textual)
Campus location closed | Campus	20
Lease term expire	2,022
Lease marginal borrowing rate	4.50%
Restructuring liabilities | $	$ 5.1	$ 4.8

Fair Value Measurement (Details

Fair Value Measurement (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Cash equivalents:
Total assets at fair value on a recurring basis	$ 100	$ 100
Other long-term liabilities:
Total liabilities at fair value on a recurring basis	12,473	3,278
Money market funds [Member]
Cash equivalents:
Total assets at fair value on a recurring basis	100	100
Deferred payments [Member]
Other long-term liabilities:
Total liabilities at fair value on a recurring basis	12,473	3,278
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Cash equivalents:
Total assets at fair value on a recurring basis	$ 100	$ 100
Other long-term liabilities:
Total liabilities at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Money market funds [Member]
Cash equivalents:
Total assets at fair value on a recurring basis	$ 100	$ 100
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Deferred payments [Member]
Other long-term liabilities:
Total liabilities at fair value on a recurring basis
Significant Other Observable Inputs (Level 2) [Member]
Cash equivalents:
Total assets at fair value on a recurring basis
Other long-term liabilities:
Total liabilities at fair value on a recurring basis
Significant Other Observable Inputs (Level 2) [Member] | Money market funds [Member]
Cash equivalents:
Total assets at fair value on a recurring basis
Significant Other Observable Inputs (Level 2) [Member] | Deferred payments [Member]
Other long-term liabilities:
Total liabilities at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member]
Cash equivalents:
Total assets at fair value on a recurring basis
Other long-term liabilities:
Total liabilities at fair value on a recurring basis	$ 12,473	$ 3,278
Significant Unobservable Inputs (Level 3) [Member] | Money market funds [Member]
Cash equivalents:
Total assets at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | Deferred payments [Member]
Other long-term liabilities:
Total liabilities at fair value on a recurring basis	$ 12,473	$ 3,278

Fair Value Measurement (Detai37

Fair Value Measurement (Details 1) - Deferred Payments [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Schedule of changes in fair value of level 3 liability
Beginning Balance	$ 3,278
Amounts earned	(232)
Contingent consideration in connection with NYCDA acquisition	9,125
Adjustments to fair value	302
Ending Balance	$ 12,473

Long Term Debt (Details)

Long Term Debt (Details)	Jul. 02, 2015USD ($)	Nov. 08, 2012	Mar. 31, 2016USD ($)	Mar. 31, 2015USD ($)
Long Term Debt (Textual)
Revolving credit facility, value	$ 150,000,000
Maximum aggregate incremental term loans	$ 50,000,000
Maturity date	Jul. 2, 2020
Cash interest paid			$ 100,000	$ 1,100,000
Covenant terms required by credit facility			• • •
Maximum total leverage ratio			2
Minimum coverage ratio			1.75
Minimum department of education financial composite score			1.5
Revolving credit facility, outstanding			$ 0
Payments of debt financing costs	$ 900,000
Prior Credit Agreement [Member]
Long Term Debt (Textual)
Maturity date		Dec. 31, 2016
Revolving Credit Facility [Member]
Long Term Debt (Textual)
Interest rate description			Borrowings under the Revolver will bear interest at a per annum rate equal to, at the Company's election, LIBOR or a base rate, plus a margin ranging from 1.75% to 2.25%, depending on the Company's leverage ratio.
Revolving Credit Facility [Member] | Minimum [Member]
Long Term Debt (Textual)
Margin rate for interest if using base rate			1.75%
Unused commitment fee			0.25%
Revolving Credit Facility [Member] | Maximum [Member]
Long Term Debt (Textual)
Margin rate for interest if using base rate			2.25%
Unused commitment fee			0.35%

Stock Options, Restricted Sto39

Stock Options, Restricted Stock and Restricted Stock Units (Details) - Restricted stock and restricted stock units [Member]	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Schedule of restricted stock and restricted stock units activity
Beginning Balance, Number of shares or units | shares	634,327
Grants, Number of shares or units | shares	176,802
Vested shares, Number of shares or units | shares	(6,588)
Forfeitures, Number of shares or units | shares
Ending Balance, Number of shares or units | shares	804,541
Beginning Balance, Weighted-average grant price | $ / shares	$ 104.66
Grants, Weighted-average grant price | $ / shares	50.67
Vested shares, Weighted-average grant price | $ / shares	$ 62.28
Forfeitures, Weighted-average grant price | $ / shares
Ending Balance, Weighted-average grant price | $ / shares	$ 93.98

Stock Options, Restricted Sto40

Stock Options, Restricted Stock and Restricted Stock Units (Details 1) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		12 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Schedule of stock option activity and other stock option information
Exercises, Number of shares
Stock options [Member]
Schedule of stock option activity and other stock option information
Beginning Balance, Number of shares		100,000
Grants, Number of shares
Exercises, Number of shares
Forfeitures/Expirations, Number of shares
Ending Balance, Number of shares		100,000		100,000
Exercisable, Number of shares		100,000
Beginning Balance, Weighted-average exercise price		$ 51.95
Grants, Weighted-average exercise price
Exercises, Weighted-average exercise price
Forfeitures/Expirations, Weighted-average exercise price
Ending Balance, Weighted-average exercise price		$ 51.95		$ 51.95
Exercisable, Weighted-average exercise price		$ 51.95
Weighted-average remaining contractual life (years)		4 years 9 months 18 days		5 years 1 month 6 days
Exercisable, Weighted-average remaining contractual life (years)		4 years 9 months 18 days
Aggregate intrinsic value	[1]			$ 817
Exercisable, Aggregate intrinsic value	[1]
[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 respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company's common stock.

Stock Options, Restricted Sto41

Stock Options, Restricted Stock and Restricted Stock Units (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of stock-based compensation expense
Stock-based compensation expense included in operating expense	$ 2,891	$ 2,451
Tax benefit	1,099	956
Stock-based compensation expense, net of tax	1,792	1,495
Instruction and educational support [Member]
Schedule of stock-based compensation expense
Stock-based compensation expense included in operating expense	$ 651	$ 367
Marketing [Member]
Schedule of stock-based compensation expense
Stock-based compensation expense included in operating expense
Admissions advisory [Member]
Schedule of stock-based compensation expense
Stock-based compensation expense included in operating expense
General and administration [Member]
Schedule of stock-based compensation expense
Stock-based compensation expense included in operating expense	$ 2,240	$ 2,084

Stock Options, Restricted Sto42

Stock Options, Restricted Stock and Restricted Stock Units (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Feb. 29, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized for grants		500,000
Maximum term of the awards granted under the Plan		10 years
Stock-based compensation cost which has not yet been recognized	$ 31,200,000
Stock-based compensation cost recognized period, in months	33 months
Restricted stock awarded subject to performance condition	606,000
Tax shortfall related to share-based payments	$ 50,000
Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for grants			176,802
Closing price of stock on date of stock grant			$ 50.67
Board of Directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Board of Directors [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years

Other Long-Term Liabilities (De

Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Other Long-Term Liabilities [Abstract]
Deferred payments related to acquisitions	$ 20,773	$ 6,078
Deferred revenue, net of current portion	12,221	14,429
Loss on facilities not in use	11,888	15,229
Deferred rent and other facility costs	9,112	8,993
Lease incentives	3,035	3,125
Deferred gain on sale of campus building	62	133
Total other long-term liabilities	$ 57,091	$ 47,987

Other Long-Term Liabilities (44

Other Long-Term Liabilities (Details Textual) $ in Thousands	1 Months Ended		3 Months Ended
	Apr. 30, 2016USD ($)	Jun. 30, 2007USD ($)Asset	Mar. 31, 2016USD ($)Sellers	Mar. 31, 2015USD ($)	Jan. 13, 2016USD ($)	Dec. 31, 2015USD ($)
Other Long -Term Liabilities (Textual)
Deferred payment arrangements, maximum amount			$ 18,000
Deferred payment arrangements			14,600
Deferred payment arrangements value			3,300			$ 3,300
Funds received from investor			$ 2,800
Sale price of one of campus buildings		$ 5,800
Sale and lease back term for most of the campus building		10 years
Gain on sale and lease back of one of campus buildings before tax		$ 2,800
Sale and lease back term		10 years
Number of assets sold | Asset		1
Deferred payment arrangement number of sellers | Sellers			1
Contingent consideration to sellers			$ 405	$ 300
Minimum [Member]
Other Long -Term Liabilities (Textual)
Leasehold improvements and long-term liability amortization period			5 years
Maximum [Member]
Other Long -Term Liabilities (Textual)
Leasehold improvements and long-term liability amortization period			10 years
NYCDA [Member]
Other Long -Term Liabilities (Textual)
Deferred payment arrangements					$ 14,500
NYCDA [Member] | Subsequent Event [Member]
Other Long -Term Liabilities (Textual)
Contingent consideration to sellers	$ 6,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes (Textual)
Unrecognized tax benefits	$ 0.1
Recognition of tax benefits	0.3
Amount of interest and penalties	0.1
Reduction of unrecognized tax benefits in the next twelve months, due to expiration of applicable statues of limitation	0.1
Cash payments for income taxes	$ 3.7	$ 0.2

Regulation (Details)

Regulation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Apr. 29, 2015
Regulation (Textual)
Average of median annual earnings percentage	8.00%
Average of median discretionary percentage	20.00%
Debt to income rates description	A program would fail if the program's graduates have an annual earnings rate of 12% or greater and a discretionary income rate of 30% or greater.
Amount due to department of education		$ 500
Minimum [Member]
Regulation (Textual)
Average of median annual earnings percentage	8.00%
Average of median discretionary percentage	20.00%
Maximum [Member]
Regulation (Textual)
Average of median annual earnings percentage	12.00%
Average of median discretionary percentage	30.00%