STRAYER EDUCATION INC, S-1/A, 1996-07-16

STRAYER EDUCATION INC
S-1/A, 1996-07-16
EDUCATIONAL SERVICES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1996

REGISTRATION NO. 333-3967
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

STRAYER EDUCATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MARYLAND
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

8221
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)

52-1975978
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

1025 15TH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

RON K. BAILEY
PRESIDENT
STRAYER EDUCATION, INC.
1025 15TH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:

WALTER G. LOHR, JR.
HOGAN & HARTSON L.L.P.
111 S. CALVERT STREET, SUITE 1600
BALTIMORE, MD 21202
(410) 659-2700
RICHARD J. PARRINO
SHAW, PITTMAN, POTTS & TROWBRIDGE
2300 N STREET, N.W.
WASHINGTON, DC 20037
(202) 663-8000

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JULY 16, 1996

PROSPECTUS

3,000,000 SHARES

STRAYER LOGO

STRAYER EDUCATION, INC.
COMMON STOCK
------------------------

All of the shares of Common Stock, $.01 par value (the "Shares"), offered
hereby are being offered (the "Offering") by Strayer Education, Inc. (the
"Company"). Prior to the Offering, there has been no public market for the
Common Stock of the Company. Approximately $19.7 million of the net proceeds of
the Offering will be used to make payments to affiliates of the Company. See
"Use of Proceeds." It is currently estimated that the initial public offering
price will be between $9.00 and $11.00 per Share. See "Underwriting" for factors
considered in determining the initial public offering price.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "STRA" upon notice of issuance.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN RISKS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)

<CAPTION>
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share......................... $ $ $
- ----------------------------------------------------------------------------------------------
Total(3).......................... $ $ $
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting expenses of the Offering estimated at $ payable by
the Company.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 450,000 additional Shares from the Company on the same terms and
conditions as set forth above solely to cover over-allotments, if any. If
the Underwriters exercise such option in full, the total Price to Public,
Underwriting Discount, and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."

------------------------

The Shares are offered by the Underwriters subject to prior sale, when, as
and if issued to and accepted by them, subject to their right to reject any
order in whole or in part and to certain other conditions. The Underwriters
reserve the right to withdraw, cancel or modify such offer and to reject offers
in whole or in part. It is expected that delivery of certificates for the Shares
will be made at the offices of Legg Mason Wood Walker, Incorporated, Baltimore,
Maryland, on or about , 1996.

------------------------

LEGG MASON WOOD WALKER
INCORPORATED

, 1996
<PAGE> 3

[MAP OF GREATER WASHINGTON D.C. AND SURROUNDING AREA INDICATING
CAMPUS LOCATIONS AND PICTURES OF EACH OF THE EIGHT CAMPUS
FACILITIES INSERTED HERE]

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and quarterly reports for the first
three quarters of each fiscal year containing unaudited financial information.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary information is qualified in its entirety by the more
detailed information and financial statements and notes thereto appearing
elsewhere in this Prospectus. Except as otherwise indicated herein, (i) the
information in this Prospectus assumes an initial public offering price of
$10.00 per Share and no exercise of the Underwriters' over-allotment option and
(ii) all references to the Company in this Prospectus include Strayer Education,
Inc. and the business and properties of Strayer College, Inc., a Maryland
corporation ("Strayer" or the "College"), and Education Loan Processing, Inc., a
Virginia corporation ("ELP"), each of which, as a result of the plan of
reorganization (the "Reorganization") described under "Reorganization," will
become a wholly-owned subsidiary of Strayer Education, Inc. Pursuant to the
Reorganization, among other things, the status of the College and ELP as S
Corporations under the Internal Revenue Code of 1986 will be terminated and the
College will make the S Corporation Distribution (as defined herein) to its
current stockholders. All references herein to the College's Financial
Statements are to the combined financial statements of the College and ELP
included in this Prospectus.

THE COMPANY

Strayer is a regional proprietary institution of higher education offering
undergraduate and graduate degree programs to more than 7,000 students at eight
campuses in Washington, D.C. and Northern Virginia. In early 1996, the College
received state approval to operate its first degree-granting campus in Maryland.
The College is accredited by the Commission on Higher Education of the Middle
States Association of Colleges and Schools ("Middle States"), the regional
institutional accrediting body recognized by the U.S. Department of Education.
The majority of Strayer students are working adults pursuing their first college
degree to improve their job skills and advance their careers. Of students
enrolled in Strayer programs at the beginning of the 1995 Fall quarter,
approximately 57% were over the age of 30 and approximately 62% were engaged in
a part-time course of study. The College believes it attracts working adults by
offering a business-oriented curriculum, convenient campus locations, flexible
class schedules, a wide variety of information technology courses and an
experienced teaching faculty. Many employers of Strayer students, including
major corporations and governmental agencies, provide full or partial tuition
reimbursement for Strayer courses.

The College was founded as Strayers Business College in Baltimore, Maryland
in 1892. Strayer began a program of significant expansion in 1989 when its
current President, Ron K. Bailey, acquired ownership of the College. Since 1989,
the number of campuses has increased from three to eight, enrollment has
increased from approximately 2,900 students at the beginning of the 1990 Fall
quarter to approximately 7,400 students at the beginning of the 1995 Fall
quarter, and annual revenues have increased from approximately $11.3 million for
the year ended December 31, 1990 to approximately $38.2 million for the year
ended December 31, 1995. During the same period, the College focused its
attention on its degree programs by broadening its course offerings, increasing
the number of faculty members with doctoral and other terminal degrees,
expanding its library and other learning resources and investing in information
systems. The College also closed the Baltimore campus, which was not a
degree-granting institution.

The College designs its educational offerings to meet the practical needs
of its student body. Strayer regularly revises its curriculum in consultation
with area employers to respond to changing business trends and workplace
requirements. The College offers associate's, bachelor's and master's degree
programs in accounting, business administration, and computer information
systems, as well as undergraduate degree programs in related fields, such as
marketing and economics. The College has expanded and upgraded its
computer-related course offerings as business and governmental organizations
have increased their use of information technology. The College offers an
intensive twelve-month diploma program in computer information systems to
instruct students in new information technologies. Strayer has equipped each of
its campuses with computer and networking laboratories containing up-to-date
hardware and software for instructional use.

Strayer provides students with classroom locations close to their homes or
workplaces and flexible class schedules that make it easier for working adults
to attend classes. Strayer currently offers its courses at two campuses in the
District of Columbia and six campuses in Northern Virginia. The College plans to
open its first Maryland degree-granting campus in early 1997. To accommodate the
scheduling requirements of

3
<PAGE> 5

working students, Strayer offers classes seven days a week at hours ranging from
6:00 a.m. to midnight. In addition, Strayer operates throughout the year on a
quarter system, which enables many of its students to attend classes all year.

Strayer recently has taken additional steps to improve the accessibility of
its instructional programs. It currently operates programs on-site at the U.S.
Department of Transportation and at the General Services Administration, for
employees of the federal government; at Quantico Marine Base, Fort Belvoir Army
Education Center and Naval Surface Warfare Center, Dahlgren Division, for active
military personnel; and at Computer Sciences Corporation, in Falls Church,
Virginia, for company employees. The College has submitted a proposal to offer
graduate and upper level undergraduate courses at the Southern Maryland Higher
Education Center in California, Maryland. Strayer also offers an increasing
number of courses through the Internet, which may allow the College in the
future to expand its student population beyond the geographical areas served by
its campuses.

Students finance their Strayer education in a variety of ways. A
significant number of students utilize federal financial aid programs. In
addition, many of Strayer's working adult students finance their own education
or receive full or partial tuition reimbursement from their employers. Since
1995, Strayer has extended educational loans through an internal program, the
Strayer Education Loan Program (the "SEL Program"), to eligible students seeking
an alternative to federal programs. The SEL Program enables students to finance
their education through monthly payments of between $200 and $300 while they
attend college and after they graduate. The administrative costs of the SEL
Program to the College are substantially less than those of the federal loan
programs. In addition, the SEL Program reduces the College's dependence on the
receipt of federal financial aid funds.

The College believes that the demand of working adults for
business-oriented higher education in Strayer's market area will continue to
increase as the result of a number of demographic and economic trends. According
to the American Council on Education, older students are more likely to pursue
postsecondary education in professional fields, including business-related
studies, than in the arts and sciences. The U.S. National Center for Educational
Statistics estimates that by the year 2000 approximately 44% of the 15.5 million
students projected to be enrolled in institutions of higher education will be
adults over the age of 24. Currently, the U.S. Bureau of the Census estimates
that 70-75% of students over the age of 24 are working adults. Management
expects that the number of adult candidates for business and computer-related
education will increase due to the continuing restructuring of businesses and
federal governmental agencies and the rapid growth and change in information
technology.

The College seeks to strengthen its position as a leading provider of
business-oriented education for working adults in its market area. Strayer
believes it will attract additional students by establishing new campuses in
Maryland and elsewhere throughout its region, broadening its curriculum and
using new distance education technologies such as the Internet. The College
intends to expand the SEL Program to reduce its administrative costs, lessen its
dependence on federal student financial aid programs and enhance its ability to
attract and retain qualified students. The College also will consider the
purchase of one or more campus facilities in order to establish permanent campus
sites and to facilitate future expansion.

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk. See "Risk
Factors."

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THE OFFERING

<TABLE>
<S> <C>
Common Stock offered hereby..... 3,000,000 Shares
Common Stock to be outstanding
after the Offering............ 9,000,000 Shares(1)
Use of proceeds................. To fund the distribution to the College's current
stockholders of undistributed income taxable to them prior
to termination of Strayer's S Corporation status (the "S
Corporation Distribution"), to fund the Company's
acquisition of ELP (an education loan servicing company),
and to provide funds for ELP's operations and for other
corporate purposes.
Nasdaq National Market Symbol... "STRA"
</TABLE>

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(1) Excludes 1,000,000 Shares reserved for issuance under the Company's stock
option plan. Upon the effectiveness of the Registration Statement of which
this Prospectus forms a part, the Company intends to grant to certain of its
employees options under the plan to purchase an aggregate of 700,000 Shares
at an exercise price equal to the initial public offering price set forth on
the cover page of this Prospectus. See "Management -- Stock Option Plan."

5
<PAGE> 7

SUMMARY FINANCIAL AND OPERATING INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------
YEAR ENDED DECEMBER 31, (UNAUDITED)
------------------------------------------------------------- PRO
PRO FORMA
1991 1992 1993 1994 1995 FORMA 1995 1996 1996(3)
------- ------- ------- ------- ------- 1995(3) ----------- ----------- -------
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................. $16,529 $23,793 $29,368 $34,257 $38,196 $38,196 $ 10,635 $ 12,415 $12,415
Costs and expenses(1)..... 14,449 21,298 25,124 29,055 32,020 25,845 7,691 7,787 7,787
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
Income from operations.... 2,080 2,495 4,244 5,202 6,176 12,351 2,944 4,628 4,628
Investment and other
income.................. 186 184 180 350 875 875 148 108 108
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
Net income(2)............. $ 2,266 $ 2,679 $ 4,424 $ 5,552 $ 7,051 $13,226 $ 3,092 $ 4,736 $ 4,736
======= ======= ======= ======= ======= ========= ======= ======= =======
PRO FORMA DATA:(3)
Pro forma income taxes.... $ 5,069 $ 1,852
Pro forma net income...... $ 8,157 $ 2,884
Pro forma net income per
share(4)................ $ 1.08 $ .38
Pro forma weighted average
shares outstanding(4)... 7,548 7,548
OPERATING DATA:
Enrollment(5)............. 4,000 5,600 6,200 6,800 7,400 6,500 7,100
Number of campuses........ 6 8 8 8 8 8 8
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31, 1996
--------------------------------
AT DECEMBER 31, (UNAUDITED)
----------------------------------------------- PRO AS
1991 1992 1993 1994 1995 ACTUAL FORMA(6) ADJUSTED(7)
------- ------- ------- ------- ------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................ $ 2,572 $ 3,609 $ 2,191 $ 5,564 $ 8,992 $11,905 $ 9,806 $21,764
Working capital.......................... 1,625 3,063 5,195 5,934 9,571 10,944 (5,197 ) 20,803
Total assets............................. 10,465 14,396 16,279 19,824 25,878 29,607 27,508 39,466
Long-term liabilities.................... 605 62 -- -- -- -- -- --
Total liabilities........................ 7,636 10,146 9,651 10,487 10,539 11,043 25,085 11,043
Total stockholders' equity............... 2,829 4,250 6,628 9,337 15,339 18,564 2,423 28,423
</TABLE>

- ---------------

(1) Includes bonus payments to an S Corporation stockholder of the College of
$0.2 million in 1991, $0.9 million in 1992, $3.5 million in 1993, $5.5
million in 1994, $6.2 million in 1995 and $1.6 million in the three months
ended March 31, 1995 for the payment of income taxes by the S Corporation
stockholders on undistributed S Corporation income. No such bonus payments
were made during the three-month period ended March 31, 1996. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Background and Overview" and Note 3 to the College's Financial
Statements.

(2) Historical data does not reflect any provision for income taxes. The College
and ELP were S Corporations during the periods indicated and therefore were
not subject to income tax. See "Reorganization -- Termination of S
Corporation Status" and "-- Acquisition of ELP."

(3) Reflects the formation of the Company and the acquisition of the College by
the Company as if those events had taken place on January 1, 1995. See
"Reorganization -- Formation of Holding Company." Following the termination
of their status as S Corporations prior to completion of the Offering, the
College and ELP will become subject to federal and state income tax. See
"Reorganization -- Termination of S Corporation Status" and "-- Acquisition
of ELP." The pro forma data reflects the application of statutory corporate
income tax rates to net income as if the termination of the S Corporation
status of the College and ELP had occurred on January 1, 1995. The effective
derived income tax rates for the year ended December 31, 1995 and for the
three months ended March 31, 1996 were 38.3% and 39.1%, respectively. For
the year ended December 31, 1995, also gives effect to the reduction of
costs and expenses by $6.2 million, which represents compensation payments
to an S Corporation stockholder of the College in respect of 1995 income
taxes on undistributed S Corporation income.

(4) Shares outstanding and per share data have been adjusted to reflect the
number of shares outstanding after the Reorganization and the issuance of
1,548,181 shares of Common Stock in connection with the Offering necessary
to pay the $14.0 million S Corporation Distribution. See "Reorganization"
and Note 3 to the College's Financial Statements.

(5) Reflects student enrollment as of the beginning of the Fall academic quarter
for each year indicated and as of the beginning of the Winter academic
quarter for the three months ended March 31, 1995 and March 31, 1996,
respectively. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Seasonality."

(6) Reflects (i) the April 1996 distribution of $2.1 million to the S
Corporation stockholders of the College in respect of income taxes on
estimated S Corporation income for the five-month period ending May 31,
1996, (ii) the recognition of a liability for the estimated amount of
previously recognized and undistributed S Corporation income of the College
through March 31, 1996 of $14.0 million to be paid from the proceeds of the
Offering, but without giving effect to the Offering proceeds, and (iii) the
acquisition of the College by the Company, as if those events occurred on
March 31, 1996.

(7) Gives effect to the pro forma adjustments described in note (6) above and
the receipt and application of the estimated net proceeds of the Offering as
described under "Use of Proceeds." The adjustment for net proceeds of the
Offering includes $14.0 million of the $18.5 million S Corporation
Distribution identified in "Use of Proceeds." The $14.0 million S
Corporation Distribution adjustment is based on the estimated amount of
previously recognized and undistributed S Corporation income of the College
through March 31, 1996, while the $18.5 million S Corporation Distribution
also reflects the estimated additional undistributed S Corporation income
accumulated from April 1, 1996 through the termination of S Corporation
status. The estimated $18.5 million amount is subject to adjustment for
actual S Corporation income of the College in the latter period.

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RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the Shares
offered hereby. Certain statements included in this Prospectus concerning the
Company's future financial condition and performance are forward-looking
statements and the factors discussed below could cause actual results and
developments to be materially different from those expressed in or implied by
such statements.

POTENTIAL ADVERSE EFFECTS OF REGULATION

The College is subject to extensive regulation by governmental agencies and
licensing and accrediting bodies. In particular, the Higher Education Act of
1965, as amended (the "HEA"), and the regulations issued thereunder subject to
significant regulatory scrutiny the College and all other higher education
institutions that participate in the various federal student financial aid
programs under Title IV of the HEA ("Title IV Programs"). The HEA mandates
specific regulatory responsibilities for each of the following components of the
higher education regulatory triad: (i) the federal government through the United
States Department of Education (the "Department of Education"); (ii) the
accrediting agencies recognized by the Department of Education; and (iii) state
higher education regulatory bodies.

For the year ended December 31, 1995, the College derived approximately 46%
of its revenues from Title IV Programs. Certain recently enacted statutory and
regulatory provisions impose new requirements on the College, and the Department
of Education has not fully developed administrative interpretations of these
requirements. Therefore, it is not clear how the new requirements will be
applied and interpreted. In addition, changes in, or new interpretations of,
other applicable laws, rules or regulations could have a material adverse effect
on the College's accreditation, authorization to operate in various states,
permissible activities or costs of doing business. The College's failure to
maintain or renew any required regulatory approvals, accreditations or
authorizations would have a material adverse effect on the College. See
"Licensing, Accreditation and Financial Aid Regulation."

Certain significant regulatory factors that could adversely affect the
College are discussed below:

Loss of State Authorization and Accreditation. The College is dependent on
the authorization of the applicable agency of each state where the College is
offering educational programs to allow it to operate and to grant degrees or
diplomas. State authorization and accreditation by an accrediting agency
recognized by the Secretary of Education are also required in order for an
institution to become and remain eligible to participate in Title IV Programs.
The College is subject to extensive regulation by its accrediting agency, Middle
States, and by its state licensing agencies, the District of Columbia Education
Licensure Commission, the Virginia State Council of Higher Education and, when
the College establishes a campus in Maryland, the Maryland Higher Education
Commission. State laws and regulations and accrediting agency standards affect
the College's operations and may limit the ability of the College to introduce
educational programs or to obtain authorization to operate at certain locations
or in certain states. The loss of accreditation would, among other things,
render the College ineligible to participate in Title IV Programs and would have
a material adverse effect on the College. Similarly, the loss of state
authorization by the College or an existing campus, or the failure of the
College or a new campus to obtain state authorization, would, among other
things, render the College ineligible to participate in Title IV Programs for
students in that state or location and would have a material adverse effect on
the College. See "Licensing, Accreditation and Financial Aid Regulation -- State
Licensure" and "-- Accreditation."

Student Loan Defaults; Loss of Eligibility to Participate in Title IV
Programs. Under the HEA, an educational institution may lose its eligibility to
participate in some or all Title IV Programs if defaults on the repayment of
federally guaranteed student loans exceed certain rates. These rates (known as
"cohort default rates") are based on the repayment history of current and former
students on loans provided under certain Title IV Programs. The Department of
Education calculates a cohort default rate for each institution by determining
the rate at which borrowers who become subject to their repayment obligation in
one federal fiscal year default by the end of the following federal fiscal year.
Any institution that has a cohort default rate equal to or exceeding 25% for
three consecutive years is subject to immediate loss of eligibility to
participate in

7
<PAGE> 9

certain Title IV Programs for a period of up to three federal fiscal years. The
College's cohort default rates on federally guaranteed student loans for the
1991, 1992 and 1993 federal fiscal years, the most recent federal fiscal years
for which final information is available, were 14.1%, 10.6% and 16.6%,
respectively. See "Licensing, Accreditation and Financial Aid
Regulation -- Financial Aid Regulation -- Student Loan Defaults."

Failure to Demonstrate Administrative Capability. Department of Education
regulations specify extensive criteria an institution must satisfy to establish
that it has the requisite "administrative capability" to participate in Title IV
Programs. The failure by an institution to satisfy any of the criteria may lead
the Department of Education to determine that the institution lacks the
requisite administrative capability and, therefore, to commence a proceeding to
impose a fine or to limit, suspend or terminate the participation of the
institution in Title IV Programs, or to require additional scrutiny as a
condition of continued participation. A cohort default rate on federally
guaranteed student loans equal to or exceeding 25% in any one of the three most
recent federal fiscal years is a basis for such a determination by the
Department of Education.

Based on an inspection conducted by the Office of Inspector General of the
Department of Education in mid-1992, the Department of Education concluded that
there were serious deficiencies at that time in the College's administration of
federal student financial aid programs. The Department of Education cited late
and unpaid refunds, lack of refund notification, unpaid credit balances, a high
student withdrawal rate, lack of exit counseling documentation, incorrect loan
certifications and missing financial aid transcripts. Because of these
deficiencies, the Department of Education transferred the College from the
"advance" system of payment, under which the Department of Education accepts an
institution's request for funds and transfers the amount requested (subject to
annual audit), to the "reimbursement" system of payment, under which the
institution must disburse funds to eligible students and document their
eligibility for the aid requested before receiving funds from the Department of
Education. The College disputed various of the Department of Education's
findings, but took steps to correct certain institutional weaknesses identified
in the report. Further, following an internal audit, the College in 1993 and
1994 repaid to the government certain Title IV funds for which the College
determined its documentation was inadequate. Following these remedial actions,
the Department of Education returned the College to the advance system of
payment, effective December 7, 1995. The Department of Education could impose
additional sanctions in the future if it determined that the College lacks the
capability to administer federal student financial aid programs. See "Licensing,
Accreditation and Financial Aid Regulation -- Financial Aid
Regulation -- Administrative Capability."

Failure to Demonstrate Financial Responsibility. The HEA and the
regulations issued thereunder impose new standards of financial responsibility
on eligible higher education institutions. These standards require, among other
things, that a proprietary institution such as the College meet an "acid test"
ratio (defined as the ratio of cash, cash equivalents and current accounts
receivable to current liabilities) of at least 1-to-1 at the end of the
institution's most recent fiscal year. For the fiscal year ended December 31,
1995, the College's "acid test" ratio was equal to 1.44-to-1. In addition, an
eligible institution may be required to submit an irrevocable letter of credit,
payable to the Department of Education, in an amount equal to 25% of the total
dollar amount of refunds that the institution paid on Title IV Programs in the
previous fiscal year unless the institution meets certain conditions that
indicate student refunds will be paid. The College has obtained such a letter of
credit in the amount of $500,000. Failure of the College to meet the financial
responsibility standards would, among other things, render the College
ineligible to participate in Title IV Programs and would have a material adverse
effect on the College. See "Licensing, Accreditation and Financial Aid
Regulation -- Financial Aid Regulation -- Financial Responsibility."

Regulatory Consequences of a Change in Ownership Resulting in a Change of
Control. A change in ownership resulting in a change of control of the College,
depending on the type of transaction that gives rise to a change, may have
significant regulatory consequences for the College. Such a change in ownership
could trigger a requirement for recertification by the Department of Education,
reauthorization by certain state licensing agencies or a review of the College's
accreditation by Middle States. Based in part on advisory letters that the
Department of Education, Middle States and certain of the applicable state
authorizing agencies issued in connection with the Offering, the Company does
not believe that the Reorganization or the Offering will constitute a change in
ownership resulting in a change of control under these standards. Nevertheless,

8
<PAGE> 10

upon completion, the Reorganization and the Offering must be reported to the
Department of Education, Middle States and applicable state licensing agencies,
and the reporting could subject the College to further review by any of those
bodies. After the Offering, upon a change of control sufficient to require the
College to file a Form 8-K with the Securities and Exchange Commission, the
College would cease to be eligible to participate in Title IV Programs until
recertified or provisionally certified by the Department of Education. In
addition, the College's accrediting agency, Middle States, requires institutions
that it accredits to inform it and, if required, to obtain its approval, in
advance of any substantive change, including a change that significantly alters
the ownership or control of the institution. The District of Columbia Education
Licensure Commission may require an institution licensed by it to apply to amend
its license prior to a change in ownership. Although the Department of Education
does not treat retirement or death of an owner as a change in ownership
resulting in a change of control if ownership and control are transferred to a
member of the owner's family or to certain members of the institution's
management, District of Columbia, Virginia and Maryland law and Middle States
policies do not specifically address such changes. Consequently, one or more
regulatory entities could require reporting, review or reauthorization upon a
change in ownership resulting from an owner's retirement or death. If the
College undergoes a change in ownership and is not recertified or provisionally
certified by the Department of Education, does not obtain reauthorization from
the necessary state agencies or has its accreditation withdrawn, the change
would have a material adverse effect on the College. See "Licensing,
Accreditation and Financial Aid Regulation -- Change in Ownership Resulting in a
Change of Control."

Other Regulations. In addition to the regulations discussed above, the
College is subject to compliance with numerous other regulatory requirements.
These requirements include additional financial responsibility standards;
compliance with a rule known as the "85/15 Rule" that limits an institution's
dependence on Title IV Program funds; and restrictions on adding new locations
and programs. In addition, the College is prohibited from offering its employees
incentive compensation or other payments or gifts that might constitute
inducements to secure enrollments. Failure of the College to comply with these
regulations would, among other things, render the College ineligible to
participate in Title IV Programs and would have a material adverse effect on the
College. See "Licensing, Accreditation and Financial Aid Regulation -- Financial
Aid Regulation."

LACK OF EXPERIENCE IN OPERATING CAMPUSES IN MARYLAND

The College's business strategy includes the establishment of new campuses
in the State of Maryland pursuant to approval granted in early 1996 by the
Maryland Higher Education Commission. See "Business -- Business Strategy."
Although the College formerly operated a campus in Baltimore, Maryland, oriented
toward secretarial and clerical training, the College closed that campus in
1992, and management has no experience in operating a degree-granting higher
education institution under Maryland state regulatory requirements. There can be
no assurance that the College will be successful in establishing any campuses in
Maryland, or that any campus established in Maryland will be profitable.

COMPETITION

The post-secondary education market in the College's market area is highly
competitive. The College competes with traditional public and private two-year
and four-year colleges, other for-profit schools and alternatives to higher
education, such as employment and military service. Public colleges may offer
programs similar to those of the College at a lower tuition level as a result of
government subsidies, government and foundation grants, tax-deductible
contributions and other financial sources not available to proprietary
institutions. See "Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

The College is highly dependent on certain of its personnel, particularly
Ron K. Bailey, the College's President. The loss of Mr. Bailey's services or
those of one or more of the College's other significant employees could have a
material adverse effect on the College's financial condition and results of
operations. The College believes that its future success will depend upon its
ability to continue to attract, motivate and retain highly

9
<PAGE> 11

skilled, managerial, recruitment and marketing, and academic personnel. The
College does not carry key-man life insurance on its key personnel. There can be
no assurance that the College will continue to be successful in attracting and
retaining the personnel it requires. See "Management."

RISKS RELATING TO SEL PROGRAM

In 1995, Strayer began originating educational loans under the SEL Program
to eligible students as part of its strategy to reduce its administrative
expenses, lessen its dependence on federal student financial aid programs and
attract and retain qualified students. The amounts of these loans originated in
1995 and the three months ended March 31, 1996 were approximately $1.4 million
and $650,000, respectively. See "Business -- SEL Program." The College intends
to expand the SEL Program following completion of the Offering. Strayer will be
exposed to the risk of losses associated with this type of unsecured lending.
The College has operated the SEL Program only for a limited period and for this
reason is unable to evaluate fully its underwriting standards.

ABILITY TO MANAGE GROWTH

The College experienced a period of rapid growth from 1989 to 1992 that
strained the College's financial and management information systems and other
resources. See "Licensing, Accreditation and Financial Aid Regulation -- State
Licensure" and "-- Financial Aid Regulation -- Administrative Capability."
Although the College has made a substantial investment in augmenting these
systems and resources to support future growth, there can be no assurance that
the College will be able to manage any further expansion effectively. Failure to
do so would have a material adverse effect on the College's financial condition,
results of operations and regulatory compliance.

SEASONALITY

The Company's quarterly results of operations tend to vary significantly
within a year because of student enrollment patterns. Enrollment is lower in the
third, or summer, quarter than in the other three quarters. The Company expects
that these seasonal trends will continue. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Seasonality."

CONCENTRATION OF SHARE OWNERSHIP; ANTI-TAKEOVER EFFECT

Ron K. Bailey, jointly with his spouse (the "Current Stockholders"),
currently owns all of the College's outstanding capital stock. See "The
Company." Upon completion of the Offering, the Current Stockholders will
beneficially own approximately 66.7% of the Company's outstanding Common Stock.
As a result, the Current Stockholders will have the ability to elect all of the
Company's directors and to determine the outcome of corporate actions requiring
stockholder approval. These facts may have the effect of delaying or preventing
a change in control of the Company or causing a change in control of the Company
which may not be favored by the Company's other stockholders. The Company will
be authorized to issue up to 5,000,000 shares of Preferred Stock in one or more
series, having terms fixed by the Board of Directors without stockholder vote.
Issuance of these shares could also be used as an anti-takeover device. The
Board of Directors has no current intentions or plans to issue any Preferred
Stock. See "Principal Stockholders" and "Description of Capital Stock." In
addition, a change in ownership resulting in a change of control of the Company
could trigger a requirement for recertification of the College by the Department
of Education, a review of the College's accreditation by Middle States or
reauthorization by certain state licensing agencies. These factors may tend to
discourage attempts to acquire control of the Company from the Current
Stockholders. See "Licensing, Accreditation and Financial Aid
Regulation -- Change in Ownership Resulting in a Change of Control."

BENEFITS OF THE OFFERING TO AFFILIATES

Approximately $19.7 million of the net proceeds of the Offering will be
used to make payments to affiliates of the Company. Of this amount,
approximately $18.5 million (subject to adjustment) will be paid to

10
<PAGE> 12

the Current Stockholders as the S Corporation Distribution and approximately
$1.2 million will be paid to Ron K. Bailey, a Current Stockholder, in connection
with the Company's acquisition from Mr. Bailey of an education loan servicing
company. See "Reorganization," "Use of Proceeds" and "Certain Transactions."

NO PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will develop
or be sustained after the Offering or that the market price of the Common Stock
will not decline below the initial public offering price. The initial public
offering price will be determined by negotiations between the Company and the
Representative of the Underwriters. See "Underwriting" for a discussion of
factors considered in determining the initial public offering price. The trading
price of the Company's Common Stock may be subject to wide fluctuations in
response to quarterly variations in operating results, new regulations or
interpretations of regulations, announcements of new programs and locations by
the Company or its competitors, or other factors. Those factors, as well as
general economic, political and market conditions, may adversely affect the
market price of the Common Stock.

DIVIDEND POLICY

Although the Company intends to establish an initial policy of declaring
cash dividends, there can be no assurances that dividends will be paid. The
payment and rate of future dividends are subject to the discretion of the Board
of Directors and will depend upon the Company's earnings, financial condition,
capital needs and regulatory considerations. See "Dividend Policy."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Common Stock in the public market after the
Offering could adversely affect the market price of the Common Stock. Upon
completion of the Offering, there will be 9,000,000 shares of Common Stock of
the Company outstanding (excluding 700,000 shares issuable upon exercise of
options held by employees of the Company). Of these shares, all of the 3,000,000
shares of Common Stock sold in the Offering will be freely transferable without
restriction or further registration under the Securities Act of 1933, as amended
(the "Securities Act"), except that any shares purchased by "affiliates" of the
Company, as that term is defined in Rule 144 under the Securities Act, generally
may be resold only in compliance with applicable provisions of Rule 144. The
remaining 6,000,000 shares of Common Stock will be held by the Current
Stockholders and are "restricted securities" as that term is defined in Rule
144. The Company and the Current Stockholders have agreed not to sell or
otherwise dispose of any shares of Common Stock, or any securities convertible
into or exercisable or exchangeable for shares of Common Stock (subject, in the
case of the Company, to an exception for the grant of options under the
Company's stock option plan), for a period of 180 days after the date of this
Prospectus without the consent of the Representative of the Underwriters.
Commencing 90 days after the date of this Prospectus, and subject to such
consent, all but 1,000 of the 6,000,000 shares owned by the Current Stockholders
will be eligible for sale in the public market subject to compliance with the
volume limitations and other restrictions of Rule 144. See "Shares Eligible for
Future Sale."

IMMEDIATE AND SUBSTANTIAL DILUTION TO NEW INVESTORS

Investors in the Offering will experience an immediate and substantial
dilution in net tangible book value of $6.71 per Share and may experience
further dilution upon the exercise of outstanding stock options by certain
executive officers and employees. See "Dilution."

11
<PAGE> 13

THE COMPANY

The College is a regional proprietary institution of higher education
accredited by Middle States that offers business-oriented undergraduate and
graduate degree programs at eight campuses in Washington, D.C. and Northern
Virginia. At the beginning of the 1995 Fall quarter, approximately 7,400 Strayer
students were pursuing studies in accounting, business administration, computer
information systems, economics, marketing and general studies.

The College has provided educational services for over 100 years since it
began operations in Baltimore, Maryland in 1892 with the founding of Strayers
Business College of Baltimore City by Dr. S. Irving Strayer. The College was
incorporated under Maryland law in April 1898. In 1904, Dr. Strayer and his
business partner, Thomas W. Donoho, started a business school in the District of
Columbia. In 1928, the Strayer College of Accountancy was founded and was
licensed to confer associate's and professional degrees by the District of
Columbia Board of Higher Education. The Business College and the College of
Accountancy operated concurrently, in the same building, until 1958, when the
two institutions began to offer instruction as Strayer Junior College of
Finance. Shortly thereafter, the two schools were incorporated as Strayer Junior
College, Inc. The schools principally provided clerical and secretarial training
until 1969, when Strayer was first licensed to grant bachelor's degrees at its
Washington, D.C. campus. Strayer College, Inc. and Strayer Junior College, Inc.
merged in 1973, and the College was accredited in that year as a Senior College
of Business by the Accrediting Commission of the Association of Independent
Colleges and Schools.

The Donoho family transferred ownership of the College in 1980 to Dr.
Charles Palmer. In 1981, the College obtained Middle States accreditation and
received approval from the Virginia State Council of Higher Education to offer
programs at a campus in Arlington, Virginia. The Middle States accreditation did
not extend to the Baltimore campus, which remained a clerical and secretarial
institution. The College was authorized to award master's degrees in 1987, and
opened a campus in Alexandria, Virginia in 1988.

In 1989, Mr. Ron K. Bailey, jointly with his wife, acquired all of the
outstanding capital stock of the College. Under Mr. Bailey's management, Strayer
closed the Baltimore campus and inaugurated a program of significant expansion
in the greater Washington, D.C. area that resulted in the opening of five new
campuses by the end of 1992: Woodbridge in 1989; Manassas in 1990; Loudoun in
1991; and Fredericksburg and Takoma Park in 1992. Student enrollment more than
tripled from approximately 2,150 students at the beginning of the 1989 Fall
quarter to approximately 7,400 students at the beginning of the 1995 Fall
quarter. During the same period, the College focused its attention on its degree
programs by broadening its course offerings, increasing the number of faculty
members with doctoral and other terminal degrees, expanding its library and
other learning resources and investing in information systems.

Upon completion of the Offering, the College will become a wholly-owned
subsidiary of the Company. See "Reorganization -- Formation of Holding Company."

The Company's executive offices are located at 1025 Fifteenth Street, N.W.,
Washington, D.C. 20005. Its telephone number is (202) 408-2400.

REORGANIZATION

In connection with the Offering, the Company and the College will take
certain corporate actions described below, which are collectively referred to in
this Prospectus as the "Reorganization."

FORMATION OF HOLDING COMPANY

Prior to the Reorganization, the Company's business was conducted through
the College. In anticipation of the Offering, the Company was incorporated in
Maryland on May 10, 1996, and on May 15, 1996, the Company issued 1,000 shares
of Common Stock to Mr. and Mrs. Ron K. Bailey, the Current Stockholders of the
College. Upon completion of the Offering, the Company will acquire 100% of the
outstanding capital stock of the College from the Current Stockholders in
exchange for 5,999,000 shares of Common Stock. Thereafter, the College will be
operated as a wholly-owned subsidiary of the Company.

12
<PAGE> 14

TERMINATION OF S CORPORATION STATUS

The College has elected to be treated for federal income and certain state
tax purposes as an S Corporation under Subchapter S of the Internal Revenue Code
of 1986 and comparable state laws. As a result, earnings of the College for
prior tax years have been included in the taxable income of its stockholders,
and the College has not been subject to income tax on those earnings for federal
and most state tax purposes.

The College has made regular payments to Ron K. Bailey, a Current
Stockholder, in respect of the expected tax liabilities of the Current
Stockholders for income earned by the College that was treated as having been
earned by the Current Stockholders. These amounts were treated as compensation
and are reflected as general and administration expense in the College's
Financial Statements. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Background and Overview." In April 1996,
the College made a distribution in the amount of $2.1 million to the Current
Stockholders, which represents the Current Stockholders' estimated tax liability
for S Corporation income expected to be earned during the five-month period
ending May 31, 1996.

Prior to completion of the Offering, the College's S Corporation status
will terminate. Termination of S Corporation status will subject the College to
federal and state income taxes with respect to income earned after the
termination date.

In connection with termination of its S Corporation status, the College
will declare to the Current Stockholders a dividend (the "S Corporation
Distribution"), which will be paid out of the net proceeds of the Offering. See
"Use of Proceeds." The S Corporation Distribution, in the amount of
approximately $18.5 million, will be equal to the amount of the previously
recognized and undistributed S Corporation income on which the Current
Stockholders have paid, or will pay, income tax. The estimated $18.5 million
amount is subject to adjustment for actual S Corporation income during the
period prior to termination of S Corporation status. Purchasers of Shares in the
Offering will not be entitled to the S Corporation Distribution. Following
completion of the Reorganization, the Company and its subsidiaries will be
subject to corporate income taxation on a consolidated basis. See Note 3 to the
College's Financial Statements.

ACQUISITION OF ELP

Beginning in 1995, educational loans under the SEL Program have been
purchased from the College and serviced by an affiliated company, Education Loan
Processing, Inc. ("ELP"). Ron K. Bailey, President and a Director of the Company
and the founder of ELP, has been ELP's sole stockholder. Upon completion of the
Offering, the Company will purchase from Mr. Bailey for cash all of the capital
stock of ELP, which will become a wholly-owned subsidiary of the Company. The
purchase price for the ELP capital stock will be equal to the net book value of
ELP on the date of acquisition. As of March 31, 1996, ELP's net book value was
$1.2 million. The purchase price will be paid out of the net proceeds of the
Offering. The Company also intends to apply a portion of the net proceeds of the
Offering to fund ELP's operations. See "Use of Proceeds." Prior to the Offering,
ELP has elected to be treated as an S Corporation for federal income and certain
state tax purposes. In connection with the Reorganization, ELP's S Corporation
status will terminate and ELP will become subject to federal and state income
taxes with respect to income earned after the termination date.

13
<PAGE> 15

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Shares offered hereby,
after deducting the underwriting discount and estimated Offering expenses
payable by the Company, are expected to be approximately $27.2 million
(approximately $31.4 million if the Underwriters' over-allotment option is
exercised in full).

Net proceeds of the Offering of approximately $19.7 million will be applied
to make payments to affiliates of the Company. Of this amount, approximately
$18.5 million (subject to adjustment) will be used to fund the S Corporation
Distribution to the Current Stockholders and approximately $1.2 million will be
paid to Ron K. Bailey, President of the Company, in connection with the
Company's acquisition of ELP. See "Reorganization -- Termination of S
Corporation Status" and "-- Acquisition of ELP."

Of the remaining net proceeds of approximately $7.5 million, approximately
$3.5 million will be used to fund ELP operations, up to approximately $3.0
million will be used for the possible acquisition of one or more campus
facilities from unaffiliated parties and the balance, if any, will be used for
other corporate purposes. See "Business -- Business Strategy" and "Certain
Transactions -- Transactions with ELP." As of the date of this Prospectus, the
College has not exercised its purchase option under any lease for the
acquisition of a campus facility.

Pending their application, the net proceeds of the Offering will be
invested in short-term, investment-grade, interest-bearing securities.

14
<PAGE> 16

CAPITALIZATION

The following table sets forth, as of March 31, 1996, (i) the actual
capitalization of the College, (ii) the pro forma capitalization of the Company
after giving effect to the acquisition of the College by the Company, the
distribution of $2.1 million to the Current Stockholders in April 1996 in
respect of income taxes on estimated S Corporation income for the five-month
period ending May 31, 1996 and the recognition of a current liability for the
estimated S Corporation Distribution of $14.0 million (subject to adjustment) to
be paid from the proceeds of the Offering and (iii) the capitalization of the
Company as adjusted to give effect to the receipt of the net proceeds of the
Offering, the payment of the S Corporation Distribution and the acquisition of
ELP. See "Reorganization" and "Use of Proceeds."

<TABLE>
<CAPTION>
MARCH 31, 1996
---------------------------------
<S> <C> <C> <C>
(UNAUDITED)

<CAPTION>
PRO AS
ACTUAL FORMA ADJUSTED(1)
------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Distribution payable to stockholders........................... $ -- $14,042 $ --
Long-term debt................................................. -- -- --
Stockholders' equity:
Preferred Stock, $.01 par value, 5,000,000 shares
authorized; no shares issued or outstanding............. -- -- --
Common Stock:
$10 par value, 500 shares authorized; 375.5 shares
issued and outstanding............................. 4 -- --
$.01 par value, 20,000,000 shares authorized;
6,000,000 and 9,000,000 shares issued and
outstanding, respectively.......................... -- 60 90
Additional paid-in capital................................ 1,142 1,142 27,112
Retained earnings......................................... 17,163 966 966
Net unrealized gains on investments....................... 255 255 255
------- ------- -----------
Total stockholders' equity........................... $18,564 $ 2,423 $28,423
======= ======= =========
Total capitalization................................. $18,564 $16,465 $28,423
======= ======= =========
</TABLE>

- ---------------

(1) The adjustment for the S Corporation Distribution is $14.0 million based on
the estimated amount of previously recognized and undistributed S
Corporation income of the College through March 31, 1996. The S Corporation
Distribution of $18.5 million identified in "Use of Proceeds" reflects the
estimated additional undistributed S Corporation income accumulated from
April 1, 1996 through the termination of S Corporation status. The
estimated $18.5 million amount is subject to adjustment for actual S
Corporation income of the College in the latter period.

DIVIDEND POLICY

After the Offering, the Company intends to establish an initial policy of
declaring quarterly cash dividends at the rate of $0.0625 per share ($0.25
annually) on the Company's Common Stock. The amount of dividends payable in the
future will be reviewed periodically by the Company's Board of Directors in
light of the Company's earnings, financial condition, capital needs and
regulatory considerations. There is no requirement or assurance that dividends
will be paid.

The College made distributions to the Current Stockholders of $2.8 million
in 1994, $3.4 million in 1995 and $650,000 in the three months ended March 31,
1996 for application by the Current Stockholders to the acquisition of campus
facilities leased to the College and to the establishment and funding of ELP.
See "Certain Transactions -- Lease of Campus Facilities" and "-- Transactions
with ELP."

15
<PAGE> 17

DILUTION

The pro forma net tangible book value of the Company's Common Stock at
March 31, 1996 was approximately $2.4 million or $.40 per share. Net pro forma
tangible book value represents the amount of the Company's net tangible assets
less total liabilities, adjusted to give effect to (i) the formation of the
Company, (ii) the acquisition of the College by the Company, (iii) the
distribution of $2.1 million to the Current Stockholders in April 1996 in
respect of income taxes on estimated S Corporation income of the College for the
five-month period ending May 31, 1996 and (iv) the recognition of a current
liability for the estimated S Corporation Distribution of $14.0 million (subject
to adjustment) to be paid from the proceeds of the Offering divided by the pro
forma total number of shares of Common Stock outstanding. After giving effect to
the Offering (after deducting the underwriting discount and estimated Offering
expenses payable by the Company) and the application of the estimated net
proceeds therefrom as described under "Use of Proceeds," the adjusted pro forma
net tangible book value of the Company at March 31, 1996 would have been
approximately $29.6 million or $3.29 per share. This represents an immediate
increase in net tangible book value of $2.89 per share to existing stockholders
and an immediate dilution of $6.71 per share to the persons purchasing Shares in
the Offering ("New Investors"). The following table illustrates this per share
dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $10.00
Pro forma net tangible book value per share at
March 31, 1996........................................ $ .40
Increase per share attributable to New Investors........ 2.89
-----
Adjusted pro forma net tangible book value per share after
the Offering(1)............................................ 3.29
------
Dilution per share to New Investors.......................... $ 6.71
======
</TABLE>

- ---------------

(1) The adjustment for net proceeds of the Offering includes $14.0 million of
the $18.5 million S Corporation Distribution identified in "Use of
Proceeds." The $14.0 million S Corporation Distribution adjustment is based
on the estimated amount of previously recognized and undistributed S
Corporation income of the College through March 31, 1996, while the $18.5
million S Corporation Distribution also reflects the estimated additional
undistributed S Corporation income accumulated from April 1, 1996 through
the termination of S Corporation status. The estimated $18.5 million amount
is subject to adjustment for actual S Corporation income of the College in
the latter period.

The following table summarizes, on a pro forma basis, at March 31, 1996,
the differences between existing stockholders and the New Investors with respect
to the number of shares purchased from the Company, the total consideration paid
and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.................. 6,000,000 66.67% $ 3,801,000(1) 11.25% $ 0.63
New Investors.......................... 3,000,000 33.33 30,000,000 88.75 $ 10.00
--------- ------- ----------- -------
Total............................. 9,000,000 100.00% $33,801,000 100.00%
======== ====== ========== ======
</TABLE>

- ---------------
(1) Reflects amount paid by the Current Stockholders in May 1996 for 1,000
shares and amount paid by the Current Stockholders in 1989 for the
College's capital stock, which will be exchanged for 5,999,000 Shares upon
completion of the Offering. See "Reorganization -- Formation of Holding
Company."

16
<PAGE> 18

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA AMOUNTS)

The following table sets forth, for the periods and at the dates indicated,
financial data for the College. The financial information as of December 31,
1993, 1994 and 1995 and for each of the years then ended has been derived from
the College's Financial Statements, which statements have been audited by
Coopers & Lybrand L.L.P., independent public accountants. The financial
information as of December 31, 1991 and 1992 and for the years then ended has
been derived from the College's Financial Statements, which statements have been
audited by other independent public accountants. The information set forth below
is qualified by reference to and should be read in conjunction with the
College's Financial Statements and notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere in this Prospectus. The unaudited selected combined financial
information as of March 31, 1995 and 1996 and for each of the three-month
periods then ended has been derived from the unaudited combined financial
statements of the College for each respective period presented and, in the
opinion of management, reflects all adjustments, consisting only of normal
adjustments, necessary for a fair presentation of the results of operations for
these periods. The results of operations of the College for the three months
ended March 31, 1996 are not necessarily indicative of the results to be
expected for the full year. The combined pro forma financial data does not
purport to represent what the College's financial position or results of
operations would actually have been had these events in fact occurred on the
date or at the beginning of the periods indicated or to project the Company's
financial position or results of operations for any future date or period.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
YEAR ENDED DECEMBER 31, -----------------------------------
-------------------------------------------------------------
PRO (UNAUDITED)
FORMA PRO
1995(3) FORMA
1991 1992 1993 1994 1995 ----------- 1995 1996 1996(3)
------- ------- ------- ------- ------- (UNAUDITED) ----------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Tuition................. $16,008 $22,961 $28,545 $33,238 $36,934 $36,934 $ 9,989 $ 11,570 $11,570
Fees and other.......... 521 832 823 1,019 1,262 1,262 646 845 845
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
16,529 23,793 29,368 34,257 38,196 38,196 10,635 12,415 12,415
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
Costs and expenses
Instruction and
education support..... 7,399 9,262 14,185 14,740 16,168 16,168 4,042 4,577 4,577
Selling and promotion... 2,023 2,758 3,092 3,667 4,281 4,281 836 974 974
General and
administration(1)..... 5,027 9,278 7,847 10,648 11,522 5,347 2,810 2,205 2,205
Provision for student
loan losses........... -- -- -- -- 49 49 3 31 31
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
14,449 21,298 25,124 29,055 32,020 25,845 7,691 7,787 7,787
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
Income from
operations............ 2,080 2,495 4,244 5,202 6,176 12,351 2,944 4,628 4,628
Investment and other
income................ 186 184 180 350 875 875 148 108 108
------- ------- ------- ------- ------- ----------- ----------- ----------- -------
Net income(2)........... $ 2,266 $ 2,679 $ 4,424 $ 5,552 $ 7,051 $13,266 $ 3,092 $ 4,736 $ 4,736
======= ======= ======= ======= ======= ========= ======= ======= =======
PRO FORMA DATA:(3)
Pro forma income taxes.... $ 5,069 $ 1,852
Pro forma net income...... $ 8,157 $ 2,884
Pro forma net income per
share(4)................ $ 1.08 $ .38
Pro forma weighted average
shares outstanding(4)... 7,548 7,548
OPERATING DATA:
Enrollment(5)............. 4,000 5,600 6,200 6,800 7,400 6,500 7,100
Number of campuses........ 6 8 8 8 8 8 8
</TABLE>

(footnotes on following page)

17
<PAGE> 19

(footnotes from previous page)
- ---------------

(6) Reflects (i) the April 1996 distribution of $2.1 million to the S
Corporation stockholders in respect of income taxes on estimated S
Corporation income for the five-month period ending May 31, 1996, (ii) the
recognition of a liability for the estimated amount of previously recognized
and undistributed S Corporation income of the College through March 31, 1996
of $14.0 million to be paid from the proceeds of the Offering, but without
giving effect to the Offering proceeds, and (iii) the acquisition of the
College by the Company, as if those events occurred on March 31, 1996.

18
<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BACKGROUND AND OVERVIEW

The College is a regional proprietary institution of higher education
offering undergraduate and graduate degree programs at eight campuses in the
greater Washington, D.C. area. Strayer Education, Inc., a Maryland corporation,
was incorporated in May 1996 to acquire all of the outstanding capital stock of
the College from Mr. and Mrs. Ron K. Bailey, the Current Stockholders of the
College. Upon completion of the Offering, Strayer Education, Inc. also will
acquire all of the outstanding capital stock of ELP, which services loans under
the SEL Program. Upon completion of the Offering, the College and ELP will each
be direct subsidiaries of Strayer Education, Inc. See "Reorganization."

Revenues, operating income and net income have increased in each of the
last three years. From 1993 through 1995, revenues increased 30.0%, operating
income increased 45.5% and net income increased 59.4%. Over the three-year
period, tuition revenue accounted for approximately 97.0% of total revenue. The
number of students increased 19.3% from approximately 6,200 at the beginning of
the 1993 Fall quarter to approximately 7,400 at the beginning of the 1995 Fall
quarter. Tuition rates increased approximately 15% over the three years. During
the three-year period, the College relocated three campuses to larger
facilities, expanded information technology course offerings, added more
week-end classes and increased its marketing programs. The opening of five new
campuses from 1989 to 1992 contributed to enrollment growth during the 1993-95
period, since enrollment growth rates at a campus historically have been the
greatest in the early years following commencement of operations at the campus.
In 1995, the College added personnel in the areas of human resources, facilities
management and administration to support its plans for expansion. The costs of
these additional personnel are reflected in general and administrative expense.

The College's principal source of revenue is tuition collected from its
students. The academic year of the College is divided into four quarters which
approximately coincide with the four quarters of the calendar year. Students
generally must pay the entire tuition for each course prior to the beginning of
the quarter. If a student withdraws from a course prior to completion, the
College refunds a portion of the tuition which reflects the percentage of the
course completed. When students register for courses, tuition is recorded as
deferred revenues, which are recognized as courses are taught through the
academic quarter. Revenues also consist in part of fees and other revenues
derived principally from application fees, "no show" fees and bookstore sales.
When a student registers for a course but does not attend any classes, which can
have the effect of denying a place in the course to another student, the College
imposes a "no show" fee. Student enrollment information presented herein
reflects enrollment as of the beginning of the Fall academic quarter for the
applicable year and as of the beginning of the Winter academic quarter for the
applicable interim period.

The College records tuition receivable when students register for the
academic quarter, generally prior to the end of the previous academic quarter.
Because the College's academic quarters coincide with the calendar quarter,
tuition receivable at the end of any calendar quarter largely represents student
tuition for the following academic quarter which is included in current
liabilities as deferred tuition revenue. Based upon past experience and
judgment, the College establishes an allowance for doubtful accounts with
respect to accounts receivable not included in deferred tuition revenue. Any
uncollected account more than six months past due is charged against the
allowance. The College's historical bad debt expense as a percentage of revenue
for the years ended December 31, 1993, 1994 and 1995 was 2.9%, 1.9% and 1.7%,
respectively, and for the three months ended March 31, 1996 was 0.8%.

The College's expenses consist of instruction and educational support
expense, selling and promotion expense and general and administration expense.
Instruction and educational support expense generally contains items of expense
directly attributable to the educational activity of the College. This expense
category includes salaries and benefits of faculty, academic administrators, and
student support personnel, including financial aid officers, registrars and
career counselors. Instruction and educational support expense also includes
costs of educational supplies and facilities, including rents on campus leases,
certain costs of

19
<PAGE> 21

establishing and maintaining computer laboratories and all other physical plant
and occupancy costs with the exception of costs attributable to one floor of the
Arlington campus used for administrative purposes.

Selling and promotion expense includes salaries and benefits of personnel
engaged in recruitment, admissions, promotion and development, as well as costs
of advertising and production of marketing materials.

General and administration expense includes salaries and benefits of
personnel engaged in accounting, personnel, compliance and other business
functions and plant and occupancy costs attributable to such functions. Further,
as discussed below, general and administration expense before 1996 reflected
payments made to Ron K. Bailey for taxes payable by the Current Stockholders in
respect of the College's income.

Prior to 1996, the College each year paid to Ron K. Bailey amounts
sufficient to pay the income tax liabilities of the Current Stockholders for
income earned by the College as a corporation electing under Subchapter S of the
Internal Revenue Code of 1986. These amounts were paid as bonuses (subject to
payroll taxes and benefits) and were reflected in general and administration
expense. The bonus payments totaled $3.5 million, $5.5 million, $6.2 million and
$1.6 million in 1993, 1994, 1995 and the three months ended March 31, 1995,
respectively. Beginning January 1, 1996, amounts previously paid to Mr. Bailey
for taxes payable in respect of the College's income are being paid to Mr. and
Mrs. Bailey as distributions to stockholders and not to Mr. Bailey as a bonus.
Unlike bonuses, such distributions are not reflected as general and
administrative expense. The College will continue to make distributions to
stockholders for taxes payable in respect of the College's income until the
College's S Corporation status terminates prior to completion of the Offering.
Following such termination, the Company and its subsidiaries will be subject to
corporate income taxation on a consolidated basis.

Investment and other income consists principally of earnings on
investments.

Historically, inflation has not had a significant effect on the results of
operations of the College or ELP.

RESULTS OF OPERATIONS

The following table sets forth certain combined income statement data as a
percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED MARCH
DECEMBER 31, 31,
----------------------- --------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Revenues:
Tuition............................................ 97.2% 97.0% 96.7% 93.9% 93.2%
Fees and other..................................... 2.8 3.0 3.3 6.1 6.8
----- ----- ----- ----- -----
100.0 100.0 100.0 100.0 100.0
Costs and expenses:
Instruction and educational support................ 48.3 43.0 42.3 38.0 36.9
Selling and promotion.............................. 10.5 10.7 11.2 7.9 7.8
General and administration......................... 26.7 31.1 30.2 26.4 17.8
Provision for student loan losses.................. .0 .0 .1 .0 .2
----- ----- ----- ----- -----
Income from operations.................................. 14.5 15.2 16.2 27.7 37.3
Investment and other income............................. .6 1.0 2.3 1.4 .9
----- ----- ----- ----- -----
Net income.............................................. 15.1% 16.2% 18.5% 29.1% 38.1%
===== ===== ===== ===== =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

Revenues. Tuition revenue increased 15.8% from $10.0 million in the first
quarter of 1995 to $11.6 million in the first quarter of 1996, due to a 10.0%
increase in the number of students and a 7.0% tuition increase effective for
1996. Fees and other revenue increased 30.8% from $.6 million in the first
quarter of

20
<PAGE> 22

1995 to $.8 million in the first quarter of 1996, principally as a result of the
increase in the number of students in the 1996 quarter.

Instruction and educational support expense. Instruction and educational
support expense increased 13.2% from $4.0 million in the first quarter of 1995
to $4.6 million in the first quarter of 1996. The increase was primarily
attributable to an increase in library costs associated with a new computer
system providing students with access to substantially more resource materials,
increased financial aid costs due to the engagement of an outside contractor to
manage the student loan default rate and improve financial aid administration
and increased physical plant and occupancy costs resulting from the relocation
of the Woodbridge campus to a new and larger facility with a higher lease rate.

Selling and promotion expense. Selling and promotion expense increased
16.5% from $.8 million in the first quarter of 1995 to $1.0 million in the first
quarter of 1996, due to increased advertising costs, particularly for television
advertising.

General and administration expense. General and administration expense
decreased 21.5% from $2.8 million in the first quarter of 1995 to $2.2 million
in the first quarter of 1996, due principally to the elimination of bonuses
payable to Ron K. Bailey, as discussed above. Excluding the bonus of $1.6
million paid to Mr. Bailey in the first quarter of 1995, general and
administration expense would have increased 90.3% from $1.2 million in the
earlier period to $2.2 million in the later period. The increase primarily
reflected costs of the addition of personnel in the areas of human resources,
facilities management and administration and the effects of a 7.0% pay increase
implemented in the fourth quarter of 1995.

Income from operations. Income from operations increased 57.2% from $2.9
million in the first quarter of 1995 to $4.6 million in the first quarter of
1996. Excluding the bonus of $1.6 million paid to Mr. Bailey in the first
quarter of 1995, income from operations would have been unchanged.

Net income. Net income increased 53.2% from $3.1 million in the first
quarter of 1995 to $4.7 million in the first quarter of 1996. Excluding the
bonus of $1.6 million paid to Mr. Bailey in the first quarter of 1995, net
income would have been unchanged.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Revenues. Tuition revenue increased 11.1% from $33.2 million in 1994 to
$36.9 million in 1995, due to a 8.8% increase in the number of students in 1995
and a 7.1% tuition increase effective for 1995. Average course credits per
student were lower in 1995 than in 1994. Fees and other revenue increased 23.8%
from $1.0 million in 1994 to $1.3 million in 1995, primarily as a result of the
enrollment growth, an increase in "no show" fees, which the College first
imposed in 1994, and interest income on student loans.

Instruction and educational support expense. Instruction and educational
support expense increased 9.7% from $14.7 million in 1994 to $16.2 million in
1995. Salaries and benefits for instructional personnel in all of the College's
educational programs were higher as a result of salary increases, the addition
of personnel to support increased enrollments and the hiring of full-time
managers for the computer laboratory at each campus. Physical plant and
occupancy costs also increased substantially in 1995 because of the relocation
of the Manassas and Woodbridge campuses to new and larger facilities with higher
lease rates. Partially offsetting those increases were reduced expenditures for
student financial aid in 1995.

Selling and promotion expense. Selling and promotion expense increased
16.7% from $3.7 million in 1994 to $4.3 million in 1995, due principally to
increased advertising costs, particularly for television advertising.

General and administration expense. General and administration expense
increased 8.2% from $10.6 million in 1994 to $11.5 million in 1995, due
principally to an increase in the bonus paid to Ron K. Bailey. Excluding the
bonuses in both years, general and administrative expense would have increased
4.4% from $5.2 million in 1994 to $5.4 million in 1995. The increase was
primarily attributable to higher personnel costs incurred by the addition of new
administrative staff to support expansion of the College's on-site programs and
graduate enrollment. The effect of the increase was partially offset by lower
financing costs

21
<PAGE> 23

resulting from the College's return in 1995 to full access to Title IV Programs.
In 1993 and 1994, regulatory action prevented the College from making full use
of Title IV student financial aid for its students. In order to make loans
available on terms comparable to federally guaranteed student loans, the College
contracted with a private company, which purchased institutional loans to
students at a substantial discount from their face value. The discount was
recorded as a cost of financing reflected in general and administrative expense.
In 1995, there was no comparable cost of financing expense.

Income from operations. Income from operations increased 18.7% from $5.2
million in 1994 to $6.2 million in 1995 because of the factors discussed above.

Net income. Net income increased 27.0% from $5.6 million in 1994 to $7.1
million in 1995 because of the factors discussed above.

YEAR ENDED DECEMBER 31, 1993 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Revenues. Tuition revenue increased 16.4% from $28.5 million in 1993 to
$33.2 million in 1994, due to a 9.7% increase in the number of students in 1994
and a 7.7% tuition increase effective for that year. Fees and other revenue
increased 23.8% from $.8 million in 1993 to $1.0 million in 1994, principally as
a result of the enrollment growth in 1994.

Instruction and educational support expense. Instruction and educational
support expense increased 3.9% from $14.2 million in 1993 to $14.7 million in
1994. Salaries and benefits for instructional personnel were higher in all of
the College's educational programs other than computer information systems. A
6.0% salary increase for all personnel was effective in 1994. Library costs were
also higher, due to the addition of personnel, books and equipment to support
expansion of learning resources centers at all campuses. Financial aid and
placement costs increased as the College engaged an outside firm to augment
regulatory compliance and improve the financial aid system. The effect of these
increases was partially offset by a substantial reduction in physical plant and
occupancy costs as a result of the expiration of two leases on premises
previously occupied by the College in Huntington, Virginia.

Selling and promotion expense. Selling and promotion expense increased
18.6% from $3.1 million in 1993 to $3.7 million in 1994, due principally to
increased advertising and marketing. The College increased its newspaper and
magazine advertising by approximately 50% in 1994, radio advertising by
approximately 40%, and television advertising by approximately 25%. The College
also hired an additional full-time marketing employee in 1994.

General and administration expense. General and administration expense
increased 35.7% from $7.8 million in 1993 to $10.6 million in 1994, principally
because of a substantial increase in the bonus paid to Ron K. Bailey. Excluding
the bonuses in both years, general and administrative expense would have
increased 18.4% from $4.5 million in 1993 to $5.2 million in 1994. This increase
was primarily attributable to a 6.0% salary increase for all administrative
personnel, an increase in the payment of outside consulting fees and an increase
in the number of administrative personnel.

Income from operations. Income from operations increased 22.6% from $4.2
million in 1993 to $5.2 million in 1994 because of the factors discussed above.

Net income. Net income increased 25.5% from $4.4 million in 1993 to $5.6
million in 1994 because of the factors discussed above.

SEASONALITY

The Company's quarterly results of operations tend to vary significantly
within a year because of student enrollment patterns. Enrollment is lower in the
third, or summer, quarter than in the other three quarters. In 1995, enrollments
at the beginning of the Winter, Spring, Summer and Fall academic quarters were
6,475, 6,510, 4,775 and 7,455, respectively. Costs are generally not affected by
the seasonal factors and do not vary significantly on a quarterly basis. To some
extent, however, instructional and educational support expense is lower in the
third quarter because fewer part-time faculty are needed.

22
<PAGE> 24

The following table sets forth the Companies' revenues on a quarterly basis
for the years ended December 31, 1993, 1994 and 1995 and for the three months
ended March 31, 1996:

QUARTERLY REVENUE
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1993 1994 1995 1996
----------------- ----------------- ----------------- -------
THREE MONTHS ENDED AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT
- ------------------------------------ ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
March 31............................ $ 8,822 30% $ 9,169 26% $10,635 28% $12,415
June 30............................. 7,663 26 8,427 25 9,690 25
September 30........................ 5,607 19 7,501 22 7,203 19
December 31......................... 7,276 25 9,160 27 10,667 28
------- ------- ------- ------- ------- -------
Total for Year............ $29,368 100% $34,257 100% $38,196 100%
======= ===== ======= ===== ======= =====
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

Since its acquisition by Ron K. Bailey in 1989, the College has financed
its activities through cash generated from operations. Cash generated from the
combined operations, after payment of bonuses to Mr. Bailey, was $1.3 million in
1993, $9.1 million in 1994 and $8.5 million in 1995. Cash generated from
operations has been sufficient to fund purchases of property and equipment and
to make distributions to the Current Stockholders for application by them to the
acquisition of campus facilities leased to the College and to the establishment
and funding of ELP. See "Certain Transactions -- Lease of Campus Facilities" and
"-- Transactions with ELP."

The Company expects to realize net proceeds from the Offering, after
deducting the underwriting discount and estimated Offering expenses payable by
the Company, of approximately $27.2 million. At March 31, 1996, the College had
available cash, cash equivalents and marketable securities of $16.1 million.
Upon completion of the Offering, the Company will pay approximately $18.5
million (subject to adjustment) to the Current Stockholders to fund the S
Corporation Distribution and approximately $1.2 million to Ron K. Bailey in
connection with the Company's acquisition of ELP. See "Use of Proceeds."
Accordingly, upon completion of the Offering and the foregoing application of
net Offering proceeds, the Company expects to have available cash, cash
equivalents and marketable securities of $23.6 million. The Company believes
that this amount, together with cash generated from operations, will be
sufficient to meet its anticipated operating cash requirements, including the
funding of student loans, for at least the next 24 months. If the College
determines to acquire a campus facility, it may finance the acquisition with
indebtedness.

23
<PAGE> 25

BUSINESS

OVERVIEW

Strayer is a regional proprietary institution of higher education offering
undergraduate and graduate degree programs to more than 7,000 students at eight
campuses in Washington, D.C. and Northern Virginia. The College is accredited by
Middle States, the regional institutional accrediting body recognized by the
U.S. Department of Education. The majority of Strayer students are working
adults pursuing their first college degree to improve their job skills and
advance their careers. Of students enrolled in Strayer programs at the beginning
of the 1995 Fall quarter, approximately 57% were over the age of 30 and
approximately 62% were engaged in a part-time course of study. The College
considers a full-time student to be one who completes 13.5 course credits in an
academic quarter or who is enrolled in a master's degree program. In the 1995
Fall quarter, Strayer students completed an average of 9.3 course credits.

Since 1989, when the College came under its current ownership and
management, Strayer has evolved from a small traditional business school into a
regional college that seeks to meet the special needs of the area's working
adult students. The College targets those students that did not go to college
immediately after high school or otherwise did not obtain a degree, but who
later seek additional education primarily for enhanced career opportunities.
Strayer recognizes that a return to school may create special difficulties for
these students, some of whom may have been dissatisfied with their secondary
education and who must balance educational goals with personal and professional
responsibilities. The College emphasizes the following factors to address the
needs of working adult students:

- Convenient Locations. Multiple campus locations provide students with
convenient access to the College throughout the greater Washington, D.C.
area. In early 1996, the College received approval to operate its first
degree-granting campus in the State of Maryland, where approximately 20%
of the College's current enrollment resides. The College also conducts
classes on-site at the Department of Transportation and at the General
Services Administration, for employees of the federal government; at
Quantico Marine Base, Fort Belvoir Army Education Center and Naval Surface
Warfare Center, Dahlgren Division, for active military personnel; and at
Computer Sciences Corporation, in Falls Church, Virginia, for company
employees. The College has submitted a proposal to offer upper level
undergraduate courses at the Southern Maryland Higher Education Center in
California, Maryland.

- Flexible Scheduling. The College's eight campuses offer classes seven
days a week, with some classes beginning as early as 6:00 a.m. and others
lasting as late as midnight. This flexible scheduling allows students to
attend classes at the most convenient times, giving them a better chance
to complete their programs. The College operates on the quarter system,
which allows students to begin their program in any quarter and permits
part-time students to complete their programs in less time than at a
traditional higher education institution.

- Supportive Learning Environment. The College believes that interaction
between teacher and student is important to student success. Accordingly,
Strayer limits the size of its classes and focuses the efforts of its
faculty on teaching, rather than on research or publishing. All full-time
Strayer faculty members maintain convenient office hours to encourage
students to seek additional help. The College provides tuition
reimbursement for faculty members seeking to update their skills and
knowledge.

- Market Responsiveness. The College upgrades and expands its
business-oriented curriculum quickly in response to the changing needs of
students and employers. Strayer's Curriculum Advisory Board includes
representatives of over 20 employers, a majority of whom are from the
private sector, and meets regularly to review and recommend curriculum
changes to the College. Through its relationships with these and other
employers, the College regularly monitors the needs of the market.
Centralized decision-making permits the College to implement curriculum
changes rapidly.

- SEL Program. Loans under the SEL Program provide students with an
alternative to government-sponsored financial aid. The SEL Program enables
students to finance their education through monthly payments of principal
and interest while they attend college and after they graduate and at
interest

24
<PAGE> 26

rates competitive with federal student loan programs. The SEL Program also
contributes to lower administrative costs and enables the College to
reduce its dependence on federal student loan funds.

- Capital Availability. Strayer students do not require the capital
intensive amenities, such as dormitories, leisure and sports facilities
and other plant assets, provided by educational institutions serving a
younger, full-time student population. Instead, the College is able to
invest its resources in its classroom facilities and instructional
programs. By gaining access to the equity capital markets, the College
will have an additional source of funds unavailable to public and
not-for-profit institutions.

BUSINESS STRATEGY

The College seeks to strengthen its position as a leading provider of
business-oriented education for working adults in its market area. To accomplish
this objective, the College employs the following strategies:

- Establish Additional Campuses. Strayer intends to increase enrollment at
its existing campuses and selectively add new campuses in its current
market and contiguous areas. The College plans to begin offering classes
in early 1997 at its first degree-granting campus in Maryland, which will
be located in Prince George's County. The College believes that additional
Strayer campuses in Maryland will help meet an existing demand from
Maryland residents and employers for business-oriented programs.

- Expand and Upgrade Curriculum. The College continually considers new
course offerings, in existing programs and in new programs, and course
upgrades in response to the changing demands of business, industry and
government.

- Expand SEL Program. The College intends to expand the SEL Program to
give students greater flexibility in financing their education and to
reduce its dependence on federal student loan funds. The Company expects
to use a portion of the proceeds from the Offering to purchase and fund
ELP, an education loan servicing company that serves the SEL Program.

- Control Campus Facilities. The College may seek to control its campus
facilities through purchase, as well as through long-term lease.
Management believes that permanent campus locations foster institutional
stability and market presence and enhance the College's ability to develop
and implement financial plans. The College may use a portion of the
proceeds from the Offering to purchase one or more of its existing campus
facilities.

- Expand Distance Education Programs. The College seeks to offer courses
through the Internet, subject to regulatory approval, to give students
greater flexibility in completing their programs. The College initiated
graduate course offerings through the Internet during the 1996 Winter
quarter and offered three graduate courses on-line during the 1996 Spring
quarter. The availability of Strayer course offerings on-line may allow
the College in the future to expand its student population beyond those
geographical areas served by Strayer campuses.

CAMPUS ORGANIZATION

The College organizes its academic programs and administrative operations
on a decentralized campus basis to increase its responsiveness to student needs.
A Campus Dean and a Campus Coordinator oversee the academic and administrative
functions, respectively, at each campus. Each campus is staffed with personnel
performing admissions, academic counseling, financial aid and career development
functions.

A learning resources center at each campus supports the College's
instructional programs. Each learning resources center contains a library and
computer laboratories and is operated by a full-time manager and support staff.

CURRICULUM

The College offers a business-oriented curriculum to equip students with
specialized knowledge and skills for careers in business, industry and
government. The Academic Curriculum Committee reviews and revises the College's
course offerings periodically to improve the educational programs and respond to
changing and

25
<PAGE> 27

competitive job markets. The College formed a Curriculum Advisory Board in 1993
to support the program evaluation process. The Curriculum Advisory Board
consists of College faculty, current and former Strayer students, and
representatives of more than 20 private and federal sector employers in the
greater Washington, D.C. area. The Curriculum Advisory Board also studies the
career progress of College alumni. The College uses these studies to make
decisions about curriculum development, resource allocation and faculty
appointments.

The College offers programs in the following areas:

BACHELOR OF SCIENCE (B.S.) DEGREE
Accounting
Business Administration
Computer Information Systems
Economics

ASSOCIATE IN ARTS (A.A.) DEGREE
Accounting
Business Administration
Computer Information Systems
Economics
General Studies
Marketing

MASTER OF SCIENCE (M.S.) DEGREE
Business Administration
Information Systems
Professional Accounting

DIPLOMA (CAREER DIVISION)
Computer Information Systems

Each undergraduate degree program emphasizes oral and written communication
skills as well as mathematics and various disciplines in the humanities and
social sciences. In addition to its degree programs, the College offers classes
to non-degree, non-program students wishing to take courses for personal or
professional enrichment. Enrollment of these students at the College has
expanded significantly in recent periods.

Although all of the College's programs and courses are offered at each
campus, the College adapts its offerings to the preferences of the student
population at each location. In addition, Strayer students may enroll in courses
at more than one campus. The following table shows Strayer's enrollment by
major, degree program and campus location at the beginning of the 1995 Fall
quarter:

26
<PAGE> 28

COLLEGE ENROLLMENT BY MAJOR, DEGREE PROGRAM
AND CAMPUS LOCATION -- 1995 FALL QUARTER

<TABLE>
<CAPTION>
CAMPUS
--------------------------------------------------------------------------------------------------------
WASHINGTON, TAKOMA
MAJOR DEGREE D.C. PARK ARLINGTON ALEXANDRIA WOODBRIDGE LOUDOUN MANASSAS FREDERICKSBURG TOTAL
- ------------------------ ------ ----------- ------ --------- ---------- ---------- ------- -------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accounting.............. AA 50 12 11 9 11 10 8 13 124
BS 122 43 70 64 72 56 79 72 578
MS 25 8 28 15 7 7 6 8 104
Business
Administration........ AA 122 42 30 30 29 27 26 50 356
BS 242 90 194 179 192 167 174 168 1,406
MS 83 49 111 77 57 46 52 56 531
Computer Information
Systems............... DP 79 94 47 78 55 39 68 68 528
AA 153 52 62 60 55 52 34 81 549
BS 284 137 243 371 296 244 223 190 1,988
Information Systems..... MS 48 31 75 60 65 36 40 47 402
Economics............... AA 3 -- 1 1 -- -- -- 1 6
BS 10 5 4 8 2 -- 2 -- 31
General Studies......... AA 11 5 8 5 7 -- 1 5 42
Marketing............... AA 7 5 3 5 2 -- 1 1 24
Non-Degree/Non-Program*..NDNP 206 86 144 79 30 134 83 24 786
----- --- ----- ----- --- --- --- --- -----
Total........... 1,445 659 1,031 1,041 880 818 797 784 7,455
===== === ===== ===== === === === === =====
</TABLE>

- ---------------
* Includes undeclared majors.

The College allows students to apply credits earned in one program toward
attainment of a more advanced degree. For example, a student originally pursuing
a Diploma in Computer Information Systems can extend his original objective by
taking additional courses leading to an associate's degree in Computer
Information Systems, a bachelor's degree in Computer Information Systems, and
ultimately a master's degree in Information Systems. The curriculum design
provides students a level of competency and a measure of achievement in the
event they interrupt their education or choose to work in their field of
concentration prior to obtaining their final degree.

The following table illustrates the number of degrees and diplomas
conferred by Strayer in each of the last five academic years:

DEGREES AND DIPLOMAS CONFERRED
FOR THE ACADEMIC YEARS 1991 TO 1995

<TABLE>
<CAPTION>
ACADEMIC YEAR ENDED
--------------------------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Diplomas................................... 323 714 826 702 652
Associate's Degrees........................ 115 129 168 217 239
Bachelor's Degrees......................... 285 398 453 673 787
Master's Degrees........................... 91 161 193 290 293
--- -------- -------- -------- --------
Total............................ 814 1,402 1,640 1,882 1,971
====== ====== ====== ====== ======
</TABLE>

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<PAGE> 29

FACULTY

The College seeks to appoint faculty who hold appropriate academic
credentials, are dedicated and active professionals in their field, and are
committed to teaching working adults. The following chart shows the highest
earned degrees of the College's faculty at the beginning of the 1996 Spring
quarter:

DISTRIBUTION BY HIGHEST EARNED DEGREE -- 1996 SPRING QUARTER

<TABLE>
<CAPTION>
DEGREES FULL-TIME PART-TIME
--------------------------------------------------------- --------- ---------
<S> <C> <C>
Ph.D. ................................................... 21 40
Ed.D. ................................................... 1 3
D.Sc. ................................................... 3 2
J.D. .................................................... 1 11
Master's................................................. 44 185
Bachelor's............................................... -- 17
Other:
D.C.M. ............................................. -- 1
D.P.A. ............................................. -- 2
Th.D. .............................................. -- 1
--
---
Total.......................................... 70 262
======= =======
</TABLE>

In accordance with its educational mission, the College focuses the efforts
of its faculty on teaching. The normal load for a full-time faculty member is
four courses per quarter for each of three quarters, or 12 courses per academic
year. With the approval of the Campus Deans, faculty members may teach a fifth
course per quarter and extra courses during the summer quarter for additional
compensation. The College requires full-time faculty members to hold counseling
hours at least two hours per week for each course they teach.

Strayer provides financial support for faculty members seeking to update
their skills and knowledge. The College maintains a tuition plan that reimburses
instructors enrolled in advanced degree programs for one-half of their tuition
charges. Strayer conducts annual in-house faculty workshops in each discipline.
The College also fully reimburses its faculty for their costs in receiving
computer-related instruction and training to keep current in information
technology developments.

ACCREDITATION AND APPROVALS

The College was accredited by Middle States in 1981. Accreditation is a
system for recognizing educational institutions and their programs for
performance, integrity and quality that entitles them to the confidence of the
educational community and the public. In the United States, this recognition
comes primarily through private voluntary associations of institutions and
programs of higher education. These associations establish criteria for
accreditation, evaluate institutions and professional programs for
accreditation, and publicly designate those which meet their criteria.
Accredited schools are subject to periodic review by accrediting bodies to
ensure that the schools maintain the performance, integrity and quality required
for accreditation.

Middle States reaffirmed the College's accreditation in 1995. The College
is required to submit an interim status report to Middle States in 1997, and the
next scheduled evaluation visit by Middle States is currently set for the
academic year 1999-2000. See "Licensing, Accreditation and Financial Aid
Regulation -- Accreditation."

Middle States is the same accrediting agency that grants institutional
accreditation to other degree-granting public and private colleges and
universities in its region. Accreditation by Middle States is an important
attribute of the College. College and university administrators depend on
accreditation in evaluating transfers of credit and applications to graduate
schools. Employers rely on the accredited status of institutions when evaluating
a candidate's credentials, and parents and high school counselors look to
accreditation for

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<PAGE> 30

assurance that an institution has quality educational standards. Moreover,
scholarship commissions often restrict their awards to students attending
accredited institutions, and institutional accreditation is necessary to qualify
for eligibility for federal student financial assistance.

The College is permitted to grant degrees by each state in which the
College offers educational programs. The College is currently licensed by the
D.C. Education Licensure Commission and the State Council of Higher Education
for Virginia. In February 1996, the Maryland Higher Education Commission
approved the College's application to operate in Maryland as an out-of-state
institution. See "Licensing, Accreditation and Financial Aid Regulation -- State
Licensure."

The College is authorized by the Immigration and Naturalization Service of
the U.S. Department of Justice to admit foreign students. The College also
employs certain foreign faculty members and administrators in accordance with
U.S. immigration laws. See "Licensing, Accreditation and Financial Aid
Regulation -- Immigration." In addition, Strayer is approved for the education
of veterans and members of the selective reserve and their dependents, as well
as for the rehabilitation of handicapped students. Approximately 7% of the
College's students are veterans or reservists. See "Licensing, Accreditation and
Financial Aid Regulation -- Veterans Benefits."

STUDENT CHARACTERISTICS

The College's students are primarily working adults. At the beginning of
the 1995 Fall quarter, approximately 62% of the enrollment consisted of
part-time students and approximately 69% attended classes at night or on
week-ends. Women constituted approximately 55% of Strayer's students, and the
approximate age distribution of current Strayer students was as follows:

<TABLE>
<CAPTION>
PERCENTAGE
AGE OF STUDENTS
----------------------------------------------------------------- -----------
<S> <C>
21 and under..................................................... 8%
22 to 29......................................................... 32%
30 to 39......................................................... 35%
40 to 49......................................................... 19%
50 and over...................................................... 3%
Unknown.......................................................... 3%
</TABLE>

At the beginning of the 1995 Fall quarter, approximately 69% of the
College's enrollment consisted of Virginia residents. Maryland residents and
District of Columbia residents accounted for 20% and 11% of the enrollment,
respectively. Reflecting the attraction of the greater Washington, D.C. area for
international students, students from over 50 countries collectively represented
9% of the 1995 Fall quarter enrollment.

STUDENT RECRUITMENT

The College focuses its recruitment efforts on attracting students with the
motivation and ability to complete its business-oriented educational programs.
To generate interest among potential students, Strayer's marketing staff
primarily employs direct mailings and television, radio and newspaper
advertising. The College monitors the effectiveness of its various marketing
efforts in producing student enrollment. Referrals constitute the most important
source of inquiries from potential students.

The marketing department tracks and forwards to the College's admissions
representatives responses to its direct mail and advertising campaigns.
Admissions representatives at each campus pursue expressions of interest in
Strayer by arranging interviews for prospective students. The representatives
also conduct campus tours and otherwise assist prospective students in the
application process. At March 31, 1996, the College employed 51 admissions
representatives.

The College has entered into articulation agreements with Germanna
Community College, Northern Virginia Community College and Prince George's
Community College to facilitate enrollment of students

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<PAGE> 31

seeking to transfer course credits earned at these institutions. The College
sponsors recruitment events at the campuses of each of these community colleges.

STUDENT ADMISSIONS

The College seeks to ensure that incoming students have the necessary
academic background to succeed in their course of study at Strayer. Students
attending the College's undergraduate programs must possess a high school
diploma or a General Educational Development Certificate. All students must also
pass placement exams or submit acceptable standardized test scores. For
admission to the College's degree programs, students must attain a certain level
of proficiency in English and mathematics. Students attending the College's
graduate programs must have a bachelor's degree from an accredited institution.
If a student's undergraduate major varies widely from the student's proposed
graduate course of study, certain undergraduate foundation courses may be
necessary for admission to some of the highly technical courses offered at the
graduate level.

International students applying for admission must meet the same admission
requirements as other students. Those students whose native language is not
English must provide evidence that they are able to use the English language
with sufficient facility to do college-level work in an English-speaking
institution.

TUITION AND FEES

Strayer charges tuition by the credit hour. All courses offered are 4.5
credit hours. As of January 1, 1996, undergraduate, full-time students are
charged at the rate of $160 per credit hour. Undergraduate, part-time students
are charged at the rate of $170 per credit hour. Courses in graduate programs
are charged at the rate of $230 per credit hour. Accordingly, a full-time
student seeking to obtain a bachelor's degree in four years currently would pay
approximately $7,200 per year in tuition. The College implemented tuition
increases of 8.3%, 7.7% and 7.1% in 1993, 1994 and 1995, respectively.

Generally, tuition must be paid (or arrangements made therefor) prior to
the beginning of a quarter. If a student withdraws from a course before
completion, federal regulations permit the College to retain a specified
percentage of the tuition, which varies with the percentage of the course
completed.

Students finance their Strayer education in a variety of ways. A
significant number of students utilize federal financial aid programs. In
addition, many of Strayer's working adult students finance their own education
or receive full or partial tuition reimbursement from their employers. Strayer
offers grants, loans (including loans under the SEL Program), scholarships and
work-study programs as financing options for its students. Strayer students are
eligible to receive awards from the Strayer College Educational Foundation, a
non-profit organization that provides scholarships and grants to college
students, active duty military personnel and high school students in the greater
Washington, D.C. area. Through March 31, 1996, the Foundation has awarded
$42,000 in grants and scholarships.

SEL PROGRAM

In 1995, Strayer began the SEL Program of loans for eligible students as an
alternative to government-sponsored student loans. In 1995 and the three months
ended March 31, 1996, the College originated SEL loans of approximately $1.4
million and $650,000, respectively. The SEL Program enables the College to
reduce the significant administrative costs incurred by it in processing loans
under Title IV Programs and lessens the College's dependence on federal student
financial aid programs. The College believes that the SEL Program also helps it
to attract and retain qualified students.

The College designed the SEL Program for working adult students. The loans
have maturities ranging from one to six years and bear interest at a fixed rate
that is competitive with rates under Title IV Programs. Monthly loan payments
begin the first month after the loan date and generally vary between $200 and
$300, including loan principal as well as interest. Borrowers make principal
payments while still enrolled, thereby reducing the debt they otherwise would
assume upon completion of their studies. At March 31, 1996, there were a total
of 739 loans outstanding with an aggregate loan balance of approximately $1.3
million and an average individual loan balance of approximately $1,700.

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<PAGE> 32

Loans under the SEL Program are unsecured. Strayer's underwriting involves
a credit evaluation of each applicant. See "Risk Factors -- Risks of SEL
Program."

All loans under the SEL Program are purchased from the College and serviced
by an affiliated company, ELP. Upon completion of the Offering, the Company will
acquire ELP, which thereafter will be operated as a wholly-owned subsidiary of
the Company. See "Reorganization -- Acquisition of ELP" and "Certain
Transactions -- Transactions with ELP." The College intends to expand the SEL
Program after the Offering. A portion of the net proceeds of the Offering will
be applied to fund ELP's operations. See "Use of Proceeds."

STUDENT RETENTION

Strayer dedicates significant resources to assisting students in overcoming
the personal and academic obstacles that can interfere with completion of a
course of study. Each campus provides students with scheduled tutoring sessions
and with academic counseling centers that are staffed by full-time faculty
members for eight hours each week day. In addition, the College assigns each
student an academic adviser and offers developmental courses for students whose
record indicates a need for academic support. Strayer considers factors relating
to student retention in the performance evaluation of every full-time faculty
member.

Notwithstanding Strayer's student retention programs, some students at the
College, as in other higher education institutions, end their studies prior to
program completion. In the last five award years, the College's student
withdrawal rate ranged from approximately 23% to approximately 27%. The
withdrawal rate for the 1994-95 federal award year was 23.7%. Student
withdrawals have a negative regulatory, financial and marketing effect on the
College. See "Licensing, Accreditation and Financial Aid Regulation -- Financial
Aid Regulation -- Administrative Capability." The College experiences some
decline in student enrollment during each academic quarter from the enrollment
level at the beginning of the quarter. The College is obligated to make refunds
of unearned tuition with respect to students who withdraw during an academic
quarter.

CAREER DEVELOPMENT SERVICES

The College actively assists its students and alumni with job placement and
other career-related matters through career development offices located at all
eight campuses. Strayer's career development personnel conduct workshops on
employment-related topics (including resume preparation, interviewing techniques
and job search strategies), maintain job listings, arrange campus interviews by
employers and provide other placement assistance. The College sponsors career
fairs in the Fall and Spring quarters for students and alumni to discuss career
opportunities with companies and governmental agencies in the greater
Washington, D.C. area. Over 50 employers attended the career fair held in the
1995 Fall quarter.

The College conducts annual alumni surveys to monitor the career
progression of its graduates and to comply with Middle States and state
requirements to perform outcome assessments. The reliability of the survey data
largely depends on the information reported to the College. The 1995 alumni
survey, which had an approximately 10% overall response rate, indicated that
only 5% of those responding were unemployed. Approximately 77% of undergraduate
alumni indicated that their Strayer education sufficiently prepared them for
their present occupation and approximately 80% of graduate degree alumni credit
Strayer for the achievement of their professional goals. According to the
survey, Strayer's greatest assets, in order of importance, are campus locations,
schedule variety, instructor knowledge and class sizes.

Strayer students and graduates are employed in a wide range of regional and
local companies, many of whom are in the information technology industry.
Federal governmental agencies also provide a significant source of employment.

COMPETITION

The postsecondary education market in Strayer's market area is highly
competitive. The College competes with traditional public and private two-year
and four-year colleges, other for-profit schools and

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<PAGE> 33

alternatives to higher education, such as employment and military service.
Public colleges may offer programs similar to those of the College at a lower
tuition level, due to government subsidies, government and foundation grants,
tax-deductible contributions and other financial sources not available to
proprietary institutions. Tuition at private institutions is generally higher,
and in some cases significantly higher, than the tuition at the College. Many of
the College's competitors have greater financial and personnel resources than
the College.

The College competes with other educational institutions primarily based on
the quality of its business-oriented curriculum and instruction, its flexible
schedules and convenient classroom locations, and its responsiveness to changing
educational requirements of the workplace. Few of the College's competitors have
modified their programs to meet the special needs of working adult students,
although management believes that more may do so in the future.

EMPLOYEES

At March 31, 1996, the College employed 332 faculty members, of whom 70
were full-time and 262 part-time, and 269 non-faculty staff in information
systems, financial aid, recruitment and admissions, payroll and human resources,
corporate accounting and other administrative functions. Of the College's
non-faculty staff, 190 were employed full-time and 79 part-time.

LEGAL PROCEEDINGS

By letter dated April 11, 1996, an attorney representing one former and
three present employees of the College made demand upon the College for payment
to preclude further action by the claimants with respect to certain allegations
of various forms of discrimination. The claimants consist of one current
administrator of the College, who has filed a discrimination claim with the
Equal Employment Opportunity Commission (the "EEOC"), two faculty members who
are former College administrators, one of whom has taken no administrative
action and the other of whom has filed a discrimination claim with the EEOC and
the Arlington County Office of Human Rights (the latter claim having been
subsequently withdrawn), and one former clerical employee, who has filed a
discrimination claim with the Alexandria Office of Human Rights. Each claim is
based on a different set of facts and alleges different forms of discrimination,
including gender, race and national origin. Although no suits have been filed,
the attorney representing each of the claimants in the above noted letter sent
on behalf of the four claimants has made demand for $500,000 and attorneys' fees
for each claimant. The College has investigated each of the matters and believes
it has meritorious defenses in each. Accordingly, the College intends to present
its position strongly in the event of litigation. There can be no assurance that
the College will be successful in these matters; however, the College does not
believe that the ultimate resolution of these matters will have a material
impact on the College's financial position or results of operations.

From time to time, the College is involved in litigation and other legal
proceedings arising out of the ordinary course of its business. As of the date
of this Prospectus, there were no pending material legal proceedings to which
the Company was subject or to which the Company's property was subject.

NEW CAMPUSES

The College considers a number of factors in determining the location of a
new campus. The site must be in an area where the College has (or can obtain)
the necessary regulatory authorization to do business, where there is proximity
to a large number of working adults and where there is a concentration of
technology-oriented employers. The College normally avoids areas it believes are
adequately served by competitive institutions. Within an appropriate area,
specific site selection involves criteria such as convenience and accessibility.

The Company expects to incur operating losses at each new campus for at
least the first year of operations. Initial enrollment is expected to include
existing Strayer students for whom the new campus would be more convenient. This
shift would have a negative effect on enrollment at other Strayer campuses.
Approximately 20% of the current student body consists of Maryland residents,
and a substantial portion of these students are expected to enroll at Strayer's
first degree-granting Maryland campus when it opens. Over

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<PAGE> 34

time, enrollment at that campus is expected to come from other working adults in
the area and from students attending other institutions.

PROPERTIES

The College leases its eight campuses, five of which are owned by
corporations controlled by the College's President, Ron K. Bailey. The leases
with these corporations all have ten-year terms expiring in 2006, with three
five-year renewal terms. Of the remaining leases, two have terms that expire in
1999 and 2002, respectively, with one and two five-year renewal options,
respectively, and the third lease has a term that expires in 1998, with a
three-year renewal option. With the exception of the Arlington campus lease, the
leases contain purchase options. See "Certain Transactions -- Lease of Campus
Facilities" and Note 8 to the College's Financial Statements. The table below
sets forth certain information regarding each of the College's properties at
March 31, 1996:

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF COMPUTER AREA IN
LOCATION CLASSROOMS WORKSTATIONS SQUARE FEET
------------------------------------------- ---------- ------------ -----------
<S> <C> <C> <C>
Washington, D.C............................ 21 89 30,000
Alexandria, Virginia....................... 15 71 22,000
Arlington, Virginia........................ 12 80 26,000
Woodbridge, Virginia....................... 17 64 20,800
Manassas, Virginia......................... 17 52 20,800
Loudoun Campus (Ashburn), Virginia......... 13 76 21,000
Fredericksburg, Virginia................... 13 62 17,500
Takoma Park (Washington, D.C.)............. 15 48 21,800
</TABLE>

The campuses are easily accessible to major highways or urban thoroughfares
or to the Washington, D.C. area metrorail subway system. The teaching facilities
at each campus are housed in an air-conditioned building that includes spacious
classrooms, a student lounge, faculty offices, a bookstore and a learning
resources center. Seven of the campuses provide free parking.

The College actively monitors facility capacity in light of current
utilization and projected enrollment growth. Since 1990, the College has
relocated its downtown Washington, D.C., Alexandria, Woodbridge and Manassas
campuses to newer and larger facilities and has completed extensive renovations
to the Arlington campus. Management believes the College can accommodate a
significant increase in student enrollment at most of its campuses and can
acquire additional capacity for other campuses on acceptable terms.

LICENSING, ACCREDITATION AND FINANCIAL AID REGULATION

STATE LICENSURE

The College is dependent on the authorization of the applicable agency of
each state within which the College offers educational programs to allow it to
operate and to grant degrees or diplomas to students. The College is subject to
extensive regulation in each of the two jurisdictions (the District of Columbia
and Virginia) in which it currently operates. State laws and regulations affect
the College's operations and may limit the ability of the College to introduce
educational programs or obtain authorization to operate in certain states. State
authorization is also required in order for an institution to become and remain
eligible to participate in Title IV programs.

The College was granted a permanent license by the D.C. Education Licensure
Commission (the "D.C. Commission") in 1990 following the purchase of the College
by the Current Stockholders. If the D.C. Commission finds an accredited
institution in full compliance with D.C. licensure requirements, the D.C.
Commission grants a permanent license, which remains in effect indefinitely,
subject to periodic review and amendment due to change in ownership,
accreditation status, location, degrees or certificates offered, and other
conditions.

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<PAGE> 35

After the opening of the Takoma Park campus in 1992, the D.C. Commission
conducted a site visit and issued an evaluation report containing certain
findings of deficiency with respect to advertising and publications, graduate
programs, governance, administration, budgeting, library and computer facilities
and resources, student outcomes assessment, student health and other services,
and access for disabled students. The D.C. Commission is authorized to grant a
provisional license based on its determination that an institution complies, or
within a reasonable period of time can comply, with all applicable regulatory
requirements. A provisional license is issued for a fixed period of time and may
be subject to conditions which the D.C. Commission deems necessary to achieve
full compliance. In March 1993, the D.C. Commission granted the College a
provisional license for a period of three years on the conditions that, among
others, the College submit a progress report by March 1994 and employ a
compliance specialist to assist it in meeting licensure requirements. The
College engaged a compliance specialist and submitted a progress report to the
D.C. Commission in February 1994.

In March 1996, the D.C. Commission extended the College's provisional
license through March 1997, with a site visit planned for the Fall of 1996.
During that site visit the Commission is expected to review the College's
progress in addressing past compliance concerns, the College's operations after
the change in ownership resulting from the Offering and other matters. Because
of these considerations and the likelihood that a permanent license would
require amendment in the near future, the College intends to apply for renewal
of its provisional license for the maximum five-year period.

The College began offering its educational programs in Virginia in 1981.
The Virginia State Council of Higher Education approved the College's Northern
Virginia site in 1982. On November 15, 1995, the State Council of Higher
Education for Virginia granted the College a term of full approval ending
November 30, 1998.

In 1995, the College applied to establish a branch campus in Prince
George's County, Maryland, to offer degree-granting programs up to the master's
degree level in accounting, business administration and computer information
systems. On February 27, 1996, the Maryland Higher Education Commission ("MHEC")
advised the College of the approval of its application to operate in Maryland as
an out-of-state institution. After the College has identified a Maryland campus
site in Prince George's County, the College expects to submit a renewal
application to MHEC, as well as an application to Middle States for extension of
the College's accreditation to the Maryland campus. The College plans to begin
offering instruction at the Maryland campus in early 1997. MHEC has given the
College permission to offer courses at the Computer Sciences Corporation
facilities in Hanover, Maryland, beginning in July 1996.

ACCREDITATION

An institution must be accredited by an accrediting agency recognized by
the Department of Education in order to be eligible to participate in Title IV
Programs. The HEA requires accrediting agencies recognized by the Department of
Education to review many aspects of an institution's operations in order to
ensure that the education or training offered by the institution is of
sufficient quality to achieve, for the duration of the accreditation period, the
stated objective for which the education or training is offered. Under the
Higher Education Amendments of 1992, a recognized accrediting agency must
perform regular inspections and reviews of institutions of higher education,
including unannounced site visits of institutions such as the College that
provide vocational education and training. In accordance with that requirement,
Middle States conducted an unannounced site visit to the College in April 1996
and in its report stated that Strayer had represented itself with honesty and
integrity regarding its prebaccalaureate occupationally specific programs.

Middle States accredited the College in 1981 and reaffirmed the College's
accreditation in November 1995. The College is required to submit an interim
status report in 1997, which will address planning efforts as they relate to
expansion of enrollments and additional off-campus sites and to facilities.
Middle States' next scheduled evaluation visit to the College is currently set
for the academic year 1999-2000. Middle States is scheduled to apply for
continued recognition by the Department of Education in 1996 and has updated
certain of its policies to conform to new HEA requirements. The College expects
that its next accreditation review will be conducted under the new requirements.

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<PAGE> 36

IMMIGRATION

The College is authorized by the Immigration and Naturalization Service
("INS") of the U.S. Department of Justice to admit foreign students. The College
also employs certain foreign faculty members and administrators in accordance
with U.S. immigration laws. Foreign students, other than resident aliens,
intending citizens, and residents of certain Pacific islands, are ineligible to
participate in Title IV Programs. Immigration legislation pending in Congress
may further restrict the availability of student financial aid to foreign
students. The College has established procedures designed to comply with U.S.
immigration laws. If the College fails to comply with these laws, the INS could
take enforcement action, which could result in the withdrawal of foreign
students enrolled at Strayer, loss of authorization to admit foreign students or
loss of foreign faculty members and administrators.

FINANCING STUDENT EDUCATION

In 1995, approximately 42% of the College's students participated in one or
a combination of several of the federally supported student financial aid
programs. A substantial portion (approximately 46% in 1995) of the College's
revenues are derived from tuition financed under Title IV Programs.

The College's financial aid programs are designed to assist eligible
students whose financial resources are inadequate to meet the cost of education.
Aid is awarded on the basis of financial need, generally defined under the HEA
as the difference between the cost of attending a program of study and the
amount a student can reasonably be expected to contribute to those expenses. All
recipients of financial aid must maintain a satisfactory grade point average and
progress in a timely manner toward completion of a program of study.

Title IV Programs

The College maintains eligibility for its students to participate in the
following Title IV Programs:

Federal Family Education Loans. Pursuant to the Federal Family Education
Loan Program (the "FFEL Program"), which includes the Federal Stafford Loan
("Stafford") program and the Federal PLUS program, students and their parents
can obtain subsidized and unsubsidized student loans. Repayment of Stafford
loans is deferred until six months after the student graduates or withdraws.
Students who demonstrate financial need may qualify for a subsidized Stafford
loan, and the federal government will pay the interest on the loan while the
student is in school and for six months after the student's graduation or
withdrawal. Unsubsidized Stafford loans are available to a student in an amount
up to the difference between the student's estimated cost of attendance at the
institution and the estimated financial assistance reasonably available to that
student. The unsubsidized Stafford loan program now incorporates the former
Federal Supplemental Loans for Students ("SLS") program. In 1995, approximately
36.8% of the College's revenues were derived from Stafford loans. PLUS Loans are
made available to parents of dependent students and accounted for approximately
1.0% of the College's revenues in 1995. The maximum amount of any PLUS loan is
the difference between the student's estimated cost of attendance at the
institution and the estimated financial assistance reasonably available to that
student.

Pell Grants. Grants under the Federal Pell Grant ("Pell") program, which
are available to eligible students based on financial need and other factors,
accounted for approximately 5.1% of the College's revenues in 1995.

Campus-Based Programs. The "campus-based" Title IV Programs include the
Federal Supplemental Educational Opportunity Grant program, the Federal
Work-Study program, and the Federal Perkins Loan ("Perkins") program. These
programs are "campus-based" because the institution has significant
responsibilities for program administration. Tuition received by the College
under the campus-based programs accounted for less than 1.0% of the College's
revenues in 1995.

Direct Student Loans. In 1993, Congress enacted the William D. Ford Direct
Loan Program (the "Direct Loan Program"), under which the Department of
Education makes loans directly to students, rather than guaranteeing loans made
by lending institutions. The Direct Loan Program has been phased in, with 104
schools nationwide selected to participate in the first year of the program
(1994-95) and over 1,350 schools

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<PAGE> 37

selected to participate in the second year (1995-96). The College has been
selected to participate in this program beginning on July 1, 1996.

Other Financial Aid Programs

In addition to the College's own student loan and scholarship programs,
eligible students at the College may participate in educational assistance
programs administered by the U.S. Department of Veterans Affairs, the U.S.
Department of Defense, the District of Columbia and private organizations.

FINANCIAL AID REGULATION

To be eligible to participate in Title IV Programs, the College must comply
with specific standards and procedures set forth in the HEA and the regulations
issued thereunder by the Department of Education. To participate in Title IV
Programs, an institution must be an "eligible institution," which requires,
among other things, that the institution be authorized by each state within
which it operates to offer its educational programs and be accredited by a
recognized accrediting agency. See "Business -- Accreditation and Approvals."
The institution must also be certified by the Department of Education to
participate in Title IV Programs, which requires, among other things, that the
institution meet certain standards of administrative capability and financial
responsibility. The College is currently certified to participate in Title IV
Programs. The HEA requires the Department of Education to recertify every
institution of higher education participating in Title IV Programs by July 23,
1997, on a schedule established by the Department. The College expects that the
Department of Education will require it to apply for recertification in the near
future.

The regulatory scheme applicable to the College has been subject to
frequent revisions, many of which have increased the level of scrutiny to which
higher education institutions are subjected and raised the applicable standards.
In enacting the Higher Education Amendments of 1992 and the Higher Education
Technical Amendments of 1993, Congress imposed significant new and more
stringent standards governing institutions participating in Title IV Programs,
including new standards for institutional eligibility and the timing, scope of
and procedures for eligibility and certification reviews, accrediting agency
approval and review by state review entities. The new standards are designed to
limit institutional dependence on Title IV Program funds, prevent institutions
with unacceptable student loan default rates from participating in Title IV
Programs and, in general, require institutions to satisfy certain criteria
intended to protect the integrity of the Title IV Programs, notably criteria
regarding administrative capability and financial responsibility.

The new standards are consistent with the increased scrutiny and regulation
to which providers of postsecondary education have been subjected as a result of
increased concern over fraud and abuse in Title IV Programs. Congress and the
Department of Education have recently focused in particular upon the operations
of proprietary institutions, such as the College. Certain elements of the
regulatory scheme applicable to the College are described below.

Increased Regulatory Scrutiny

The 1992 amendments to the HEA formalized, modified and strengthened the
regulatory structure known as the "Program Integrity Triad," which consists of
the Department of Education, recognized accrediting agencies, and state higher
education regulatory bodies. Congress intended this initiative to increase the
regulatory scrutiny of postsecondary educational institutions. In addition to
the Program Integrity Triad, other participants in Title IV Programs, notably
guarantee agencies, also have enforcement authority.

As a result of the implementation of the Program Integrity Triad,
institutions of higher education are subject to greater scrutiny by the
Department of Education, accrediting agencies and possibly state agencies. In
February 1996, the Department of Education issued an advance notice of proposed
rulemaking that proposes to provide regulatory relief to institutions that have
records of outstanding performance in administering Title IV programs and strong
financial responsibility, while focusing the Department of Education's
monitoring and oversight activities on institutions that present a high risk to
federal funds. The regulatory standards in effect at the time of reviews by
regulatory authorities and the College's compliance

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with those standards may affect the operations of the College and its ability to
participate in Title IV Programs.

Administrative Capability

Recent Department of Education regulations specify extensive criteria by
which an institution must establish that it has the requisite "administrative
capability" to participate in Title IV Programs. As discussed below, the
administrative capability standards include certain requirements relating to the
institution's cohort default rates and its withdrawal rate for its undergraduate
regular students. To meet the administrative capability standards, an
institution must also not be, and not have any principal or affiliate who is,
debarred or suspended from federal contracting or engaging in activity that is
cause for debarment or suspension, and must not otherwise appear to lack
administrative capability.

If the Department of Education determines that an institution is not
administratively capable solely because it fails to comply with the cohort
default rate standards of administrative capability, the Department will certify
the institution's continuing eligibility to participate in Title IV Programs on
a provisional basis for no more than three years. During the period of
provisional certification, the institution must comply with any additional
conditions included in its program participation agreement. If the Department of
Education determines that a provisionally certified institution is unable to
meet its responsibilities under its program participation agreement, it may
revoke the institution's provisional certification and terminate its
participation in Title IV programs.

The College measures its student withdrawal rate in accordance with
Department of Education regulations, which until July 1, 1995, required
institutions such as the College to calculate student withdrawal rates based on
an eight-month period, and which currently require calculation based on the
federal award year. In the last five award years, the College's student
withdrawal rate ranged from approximately 23% to approximately 27%. The
College's withdrawal rate for the applicable eight months of the 1994-95 award
year was 23.7%.

Based on an inspection conducted by the Office of Inspector General of the
Department of Education in mid-1992, the Department of Education concluded that
there were serious deficiencies at that time in the College's administration of
federal student financial aid programs. The Department of Education cited late
and unpaid refunds, lack of refund notification, unpaid credit balances, a high
student withdrawal rate, lack of exit counseling documentation, incorrect loan
certifications and missing financial aid transcripts. Because of these
deficiencies, the Department of Education transferred the College from the
"advance" system of payment, under which the Department of Education accepts an
institution's request for funds and transfers the amount requested (subject to
annual audit), to the "reimbursement" system of payment, under which the
institution must disburse funds to eligible students and document their
eligibility for the aid requested before receiving funds from the Department of
Education. The College disputed various of the Department of Education's
findings but took steps to correct certain institutional weaknesses identified
by the Department of Education, including creating new administrative positions
dealing with Title IV Programs, hiring additional financial aid officers,
increasing training for financial aid officers and other College officials,
preparing a financial aid manual, and developing new computer systems. Further,
following an internal audit, the College in 1993 and 1994 repaid to the
government certain Title IV funds for which the College determined its
documentation was inadequate. Following these remedial actions, the Department
of Education returned the College to the advance system of payment, effective
December 7, 1995.

Based on the Department of Education review, the College's principal
guaranty agency, American Student Assistance Corporation ("ASA") imposed a
temporary emergency suspension on the College in April 1993. After conducting a
program review, ASA limited its guaranty to loans for students who had previous
loans guaranteed by ASA. In December 1993, after conducting a followup review,
ASA removed the limitation on the College's participation in the FFEL guaranteed
student loan programs. In August 1994, ASA advised the College that its
corrective measures and plan of action were satisfactory and the program review
was closed.

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Department of Education regulations permit an institution to enter into a
written contract with a third-party servicer for the administration of any
aspect of the institution's participation in Title IV Programs. The third-party
servicer must, among other obligations, comply with Title IV requirements and be
jointly and severally liable with the institution for any violation by the
servicer of any Title IV provision. The College has written contracts with two
third-party servicers, which it has, as required, reported to the Department of
Education. Financial Aid Management for Education, Inc., which has served the
College since 1983, certifies FFEL Program loan applications, prepares reports
from the College to the Department of Education, issues checks for the Pell and
campus-based programs, and issues and collects Perkins loans. ELP provides
training for financial aid employees, development and support for automated
systems for the administration of Title IV Programs, temporary financial aid
staff as needed, consulting and regulatory support for financial aid staff, and
compliance audits, storage, and responses to inquiries regarding inactive
student files and administration of a default management plan. ELP also serves
as liaison between the College and Unger and Associates, Inc., which provides
certain default management services to the College in connection with the FFEL
Programs, including notices to students of the commencement of their repayment
obligations, skiptracing, and preclaims assistance.

Financial Responsibility

Recent amendments to the HEA and the Department of Education's regulations
prescribe extensive standards of financial responsibility that institutions such
as the College must satisfy to participate in Title IV Programs. Among these
standards of financial responsibility are general standards requiring the
institution to provide the services described in its official publications and
statements; to provide the administrative resources necessary to comply with
Title IV requirements; and to meet all of its financial obligations, including
required refunds and any repayments to the Department of Education for debts and
liabilities incurred in programs administered by the Department. A for-profit
institution such as the College must: (i) demonstrate an "acid test" ratio
(defined as the ratio of cash, cash equivalents and current accounts receivable
to total current liabilities) of at least 1-to-1 at the end of its latest fiscal
year; (ii) not have had operating losses in either or both of its two latest
fiscal years that in sum result in a decrease in tangible net worth in excess of
10% of the tangible net worth at the beginning of the two-year period; and (iii)
have had a positive tangible net worth for its latest fiscal year. For the
fiscal year ended December 31, 1995, the College's "acid test" ratio was equal
to 1.44 to 1. Unless the institution meets specific alternative criteria, it
must submit an irrevocable letter of credit, payable to the Department of
Education, in an amount equal to 25% of the total dollar amount of refunds that
the institution paid on Title IV Programs in the previous fiscal year. The
College has obtained such a letter of credit in the amount of $500,000. An
institution will not be considered to be financially responsible if it or a
person exercising substantial control over it meets certain detailed indicators
of poor past performance, including unpaid liabilities for Title IV violations,
recent limitation, suspension or termination actions, recent audit or program
review findings resulting in repayment of more than 5% of Title IV funds
received for the relevant year, failure to submit timely and acceptable audit
reports, and failure to resolve satisfactorily program review or audit findings.
Based on its audited financial statements for 1995, as submitted to the
Department of Education, the College believes it satisfies each of the
applicable financial responsibility standards.

Student Loan Defaults

Under the HEA, an educational institution may lose its eligibility to
participate in some or all of the Title IV Programs if defaults on the repayment
of federally guaranteed student loans by its students exceed certain rates. A
rate of student defaults (known as a "cohort default rate") is calculated for
each institution annually by determining the rate at which borrowers who become
subject to their repayment obligation in one federal fiscal year default by the
end of the following federal fiscal year. For certain purposes described below,
the Department of Education calculates a weighted average cohort default rate
for the institution's students who enter repayment and default on a FFEL Program
or Direct Loan Program loan.

If the Department of Education notifies an institution that its cohort
default rate for FFEL Program loans equals or exceeds 25% for each of the three
most recent consecutive federal fiscal years, the institution's

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participation in the FFEL Program ends 30 days after the notification, unless
the institution timely appeals that determination on specified grounds and
according to specified procedures. An institution's participation in the Direct
Loan Program ends 30 days after notification that any combination of its FFEL
Program cohort default rate, its Direct Loan Program cohort default rate, or its
weighted average cohort default rate equals or exceeds 25% for each of the three
most recent federal fiscal years, unless the institution timely appeals. An
institution whose participation terminates under these provisions may not
participate in the relevant program for a period of up to three federal fiscal
years. An institution that is deemed ineligible to participate in a Title IV
Program based on a final default rate determination under the FFEL or Direct
Loan Programs after February 14, 1996 is also barred from receiving funds under
the Pell Grant program. The Department of Education also may initiate a
proceeding to limit, suspend or terminate an institution's participation the
FFEL Program if it has any combination of a FFEL Program, Direct Loan Program or
weighted average cohort default rate that is equal to or greater than 25% for
each of the three most recent consecutive federal fiscal years. The Department
of Education may initiate a proceeding to limit, suspend or terminate an
institution's participation in all Title IV Programs if it has a FFEL Program,
Direct Loan Program or weighted average cohort default rate that exceeds 40% for
any federal fiscal year.

In addition, an institution is considered to lack administrative capability
if its cohort default rate for the Stafford and SLS programs for any of the
three most recent federal fiscal years equals or exceeds 25% or if its cohort
default rate for the Perkins loan program equals or exceeds 15% in any federal
award year (provided that if fewer than 30 students enter repayment during a
given year, the default rate is calculated on a three-year basis). The College's
cohort default rates on federally guaranteed student loans for the 1991, 1992
and 1993 federal fiscal years, the most recent years for which final information
is available, were 14.1%, 10.6% and 16.6%, respectively. The average default
rates for proprietary institutions nationally were 30.2% and 23.9% in fiscal
years 1992 and 1993, respectively. The College's Perkins loan default rates in
federal award years 1994 and 1995 were 4.0% and 11.6%, respectively.

The 85/15 Rule

Under what is commonly referred to as the "85/15 Rule," the HEA provides
that proprietary institutions, such as the College, are eligible to participate
in Title IV Programs only if they derive no more than 85% of their revenues from
Title IV Programs, as determined in accordance with a formula in the
regulations. A proprietary institution that violates the 85/15 Rule loses its
eligibility to participate in Title IV Programs for at least one federal fiscal
year. During the 1995 federal fiscal year, the College derived 46% of its
revenues from tuition financed under Title IV Programs.

Incentive Compensation

As a part of an institution's program participation agreement with the
Department of Education, the institution must certify that it will neither
provide, nor contract with any entity that provides, any commission, bonus or
other incentive payment based directly or indirectly on success in securing
enrollments or financial aid to any person or entity engaged in any student
recruitment, admission or financial aid awarding activity. Although there can be
no assurance that the Department of Education will not find deficiencies in the
College's present or former compensation plans, the College believes that its
compensation plan complies with the HEA.

Potential Effect of Regulatory Violations

If the College fails to comply with the regulatory standards governing
Title IV Programs, the Department of Education could impose one or more
sanctions, including transferring the College to the reimbursement system of
payment, requiring repayment of certain Title IV funds, certifying the College's
eligibility on a provisional basis, taking emergency action, referring the
matter for criminal prosecution, or initiating proceedings to impose a fine or
to limit, suspend or terminate the participation of the College in Title IV
Programs. In addition, the College's guarantee agencies could limit, suspend or
terminate its eligibility in the event of certain regulatory violations.
Although there are no such sanctions currently in force, and the College does
not believe any such sanctions are contemplated, if such sanctions were imposed
against the College and

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resulted in a substantial curtailment of the College's participation in Title IV
Programs, the College would be materially and adversely affected.

If the College lost its eligibility to participate in Title IV Programs, or
if the amount of available federal student financial aid were reduced, the
College would seek to arrange or provide alternative sources of revenue or
financial aid for students. A number of private organizations provide loans to
students. Although the College believes that one or more private organizations
would be willing to provide financial assistance to students attending the
College, there is no assurance that this would be the case, and the interest
rate and other terms of such student financial aid might not be as favorable as
for Title IV Program funds. The College may be required to guarantee all or part
of such alternative assistance or might incur other additional costs in
connection with securing alternative sources of financial aid. Accordingly, the
loss of eligibility of the College to participate in Title IV Programs would be
expected to have a material adverse effect on the College even if it could
arrange or provide alternative sources of revenue or student financial aid.

RESTRICTIONS ON ADDING LOCATIONS AND EDUCATIONAL PROGRAMS

State requirements and accrediting agency standards may in certain
instances limit the ability of the College to establish additional locations and
programs. District of Columbia regulations require institutions to submit an
application for an amended license in order to add a new program or location.
The Virginia State Council of Higher Education requires institutions to obtain
approval prior to offering new educational programs at existing sites or
instruction for degree credit at a new site located more than 25 miles or 30
minutes' travel time from a central location. Maryland law and regulations
require institutions to obtain the approval of MHEC in order to offer an
instructional program not specified in its certificate of approval or to offer
more than one-third of the credit-bearing coursework leading toward a
certificate or degree at a location not specified in its certificate of
approval. Middle States requires institutions that it accredits to notify it in
advance of implementing new programs or locations, and upon notification may
undertake a review of the institution's accreditation. Based on its current
understanding of how these standards will be applied, the College does not
believe that these standards will have a material adverse effect on the College
or its expansion plans.

The HEA requires proprietary institutions of higher education to be in full
operation for two years before qualifying to participate in Title IV Programs.
However, the applicable regulations permit an institution that is already
qualified to participate in Title IV Programs to establish an additional
location that may immediately qualify, unless the location was acquired from
another institution that has ceased offering educational programs at that
location and has unpaid Title IV liabilities. The new location must satisfy all
other applicable requirements for institutional eligibility, including approval
of the additional location by the relevant state authorizing agency and the
institution's accrediting agency. In addition, a location that qualifies as a
"branch campus" must meet extensive regulatory requirements, including the
standards of administrative capability and financial responsibility discussed
above. The College's expansion plans assume its continued ability to establish
new campuses as additional locations of the College's main campus without
incurring the two-year delay in participation in Title IV Programs. The loss of
state authorization by the College or an existing campus, or the failure of the
College or a new campus to obtain state authorization, would render the College
ineligible to participate in Title IV programs in that state or location.

The Department of Education requires an institution to provide notice of an
additional location that offers at least 50%, but less than 100%, of an
educational program. The Department of Education may, in its discretion, require
the institution to apply to include such a new location in its eligibility
notification. The Department of Education bases its determination of whether to
require such an application on the percentage of an educational program that is
offered at the new location and on the financial and administrative capability
of the institution. An institution must apply to the Department of Education to
include in its eligibility designation a new branch campus or a new location at
which it offers 100% of an educational program.

Generally, if an institution eligible to participate in Title IV Programs
adds an educational program after it has been designated as an eligible
institution, the institution must apply to the Department of Education to have
the additional program designated as eligible. However, an institution is not
obligated to obtain the

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Department of Education's approval of an additional program that leads to an
associate, baccalaureate, professional or graduate degree or which prepares
students for gainful employment in the same or related recognized occupation as
an educational program that has previously been designated as an eligible
program at that institution and meets certain minimum length requirements. In
the event that an institution erroneously determines that an educational program
is eligible for Title IV funds without the Department of Education's express
approval, the institution will be liable for repayment of Title IV aid provided
to students in that program. The College does not believe that the Department of
Education's regulations will create significant obstacles to its plans to add
new programs.

DISTANCE LEARNING

State law and accrediting agency standards may regulate telecommunications
or correspondence courses offered by the College, which may include courses
offered through the Internet. The D.C. Commission requires that a course or
program offered by "correspondence, extension, or in summer session" be
consistent with the objectives and purposes of the institution and "consistent
with and comparable in quality" to courses offered to students regularly
enrolled on a full-time basis. If the College's courses offered through the
Internet failed to meet this standard, that failure could provide a basis for
adverse action by the D.C. Commission, including termination of the College's
license. Virginia requires out-of-state institutions such as the College to
obtain approval from the Virginia State Council of Higher Education before
offering any telecommunications activity at a site in Virginia.
Telecommunications activity includes any course for degree credit or program of
study where the primary mode of delivery to a site is television, video cassette
or disc, film, radio, computer, or other telecommunications devices. Middle
States has appointed a task force to develop guidelines for conducting distance
learning programs.

The HEA provides that an institution generally is not eligible to
participate in Title IV Programs if it offers more than 50% of its courses by
correspondence. The implementing regulations state that an institution is
ineligible for Title IV Programs if for its latest complete award year more than
50% of the institution's courses were correspondence courses or 50% or more of
the institution's students were enrolled in correspondence courses. Department
of Education regulations define a "telecommunications course" as a "course
offered in an award year principally through the use of television, audio, or
computer transmission, including open broadcast, closed circuit, cable,
microwave, or satellite, audio conferencing, computer conferencing, or video
cassette or discs." Accordingly, the courses the College currently offers
through the Internet constitute "telecommunications courses" under the
Department of Education regulations. If the combined number of correspondence
and telecommunications courses amount to greater than 50% of the institution's
course offerings that year, telecommunications courses are included among
correspondence courses for purposes of determining eligibility for participation
in Title IV Programs.

The current levels of correspondence and telecommunications course
offerings at the College are well within the regulatory guidelines for Title IV
eligibility. The College intends to expand the availability of on-line course
offerings in a manner consistent with applicable regulatory requirements. See
"Business -- Business Strategy."

CHANGE IN OWNERSHIP RESULTING IN A CHANGE OF CONTROL

Many states and accrediting agencies require institutions of higher
education to report or obtain approval of certain changes in ownership or other
aspects of institutional status, but the types of and triggers for such
reporting or approval vary among states and accrediting agencies. The D.C.
Commission may require an institution licensed by it to apply to amend its
license prior to a change in ownership. The applicable laws and regulations of
Virginia and Maryland do not specifically address reporting of changes in
ownership. The College's accrediting agency, Middle States, requires
institutions that it accredits to inform it in advance of any substantive
change, including a change that significantly alters the ownership or control of
the institution. Examples of substantive changes requiring advance notice to
Middle States include changes in the legal status, ownership or form of control
of the institution, such as the sale of a proprietary institution or the
beginning or ending of public sponsorship and control. Middle States must
approve a substantive change in advance in order to include the change in the
institution's accreditation status.

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Upon a change in ownership resulting in a change of control of the College,
as defined in the HEA and the Department of Education's regulations, the College
would lose its eligibility to participate in Title IV programs for an
indeterminate period of time while it applied to regain eligibility and would
thus be ineligible to receive Title IV funding during the reapproval period.
Department of Education regulations prevent an institution from avoiding a lapse
in its Title IV eligibility by applying to reestablish its eligibility before
the transfer of ownership and control is completed, although a transfer is
considered complete if it is otherwise final but subject to the condition of
subsequently obtaining approval from the Department of Education, the
accrediting agency or state regulatory authorities.

Based in part on advisory letters that the Department of Education, Middle
States and certain of the applicable state authorizing agencies issued in
connection with the Offering, the Company does not believe that the
Reorganization or the Offering will constitute a change in ownership resulting
in a change of control under these standards. Nevertheless, upon completion, the
Reorganization and the Offering must be reported to the Department of Education,
Middle States and applicable state licensing agencies, and the reporting could
subject the College to further review by any of those bodies.

The HEA and the Department of Education's regulations define a change in
ownership resulting in a change in control to include the transfer of a
controlling interest of common stock of an institution or its parent
corporation. For a publicly-traded corporation, such as the Company will be
after completion of the Offering, Department of Education regulations specify
that a change in ownership and control arises when the Securities and Exchange
Commission requires the corporation to report the change in control by filing a
Form 8-K.

The HEA and Department of Education regulations allow a change in ownership
upon the retirement or death of an owner to be treated as not resulting in a
change of control if it involves the sale or transfer of the owner's ownership
interest to a family member or to a person with an ownership interest who has
been involved in the management of the institution for at least two years.
District of Columbia, Virginia and Maryland law and Middle States policies do
not specifically address changes in ownership resulting from the retirement or
death of an owner. However, it is possible that one or more of these regulatory
bodies would consider such a change in ownership to be a substantive change that
must be reported by the institution and would require review or reauthorization
of the institution. Ron K. Bailey currently owns all of the College's
outstanding stock jointly with his wife, and after completion of the Offering
will continue to own his shares of the Company's outstanding Common Stock
jointly with his wife. If Mr. Bailey were to die, his wife would become the sole
owner of those shares. Although under current law the death of one or both of
Mr. and Mrs. Bailey may not be considered a change in ownership resulting in a
change of control for Department of Education reporting purposes, it is possible
that such a transfer would require reporting to, or review or reauthorization
by, one or more state licensing agencies or Middle States.

Under INS regulations, if a school that is approved to admit foreign
students changes ownership, approval will be automatically withdrawn 60 days
after the change of ownership unless the school files a new petition for school
approval within 60 days of that change of ownership. If, after conducting a
review, the INS district director finds that the school's approval should not be
continued, the district director must institute proceedings to withdraw the
school's approval.

If the College underwent a change that required reapproval by any state
authority, Middle States or any federal agency, and any required regulatory
approval were significantly delayed, limited or denied, there could be a
material adverse effect on the College's ability to offer certain educational
programs, award certain degrees or diplomas, operate one or more of its
locations, admit certain students or participate in Title IV programs, which in
turn would materially adversely affect the College's operations. A change that
required approval by a state regulatory authority, Middle States or a federal
agency could also delay the College's ability to establish new campuses or
educational programs and may have other adverse regulatory effects. Furthermore,
the disadvantage of undergoing a change of control may materially limit the
College's flexibility in future financings or acquisition transactions.

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VETERANS BENEFITS

Pursuant to federal law providing benefits for veterans and reservists, the
College is approved for education of veterans and members of the selective
reserve and their dependents by the state approving agency in each state in
which the College currently operates. The College is authorized to offer
educational programs to veterans and other eligible persons in the District of
Columbia and Virginia. The College expects to seek approval to offer educational
programs to veterans and other eligible persons in Maryland at an appropriate
time.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the executive
officers, current director and persons nominated to become directors of the
Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------------- --- ----------------------------------------------
<S> <C> <C>
Ron K. Bailey................................ 55 President, Treasurer and Director
Harry T. Wilkins............................. 39 Chief Financial Officer
Stanley G. Elmore............................ 55 Director Nominee
Todd A. Milano............................... 43 Director Nominee
Jennie D. Seaton............................. 66 Director Nominee
Roland Carey................................. 56 Director Nominee
Donald T. Benson............................. 53 Director Nominee
G. Thomas Waite, III......................... 45 Director Nominee
Donald Stoddard.............................. 59 Director Nominee
Charlotte Beason............................. 48 Director Nominee
</TABLE>

Ron K. Bailey is the President, Treasurer and a director of the Company.
Mr. Bailey has been the President and a trustee of the College since 1989 and
the President and a director of ELP since its formation in 1994. From 1980 to
1989, Mr. Bailey held a variety of administrative positions with the College,
including the position of Vice President of the College. Before assuming his
first full-time position with the College in 1980, Mr. Bailey was a part-time
faculty member of the College and served as Director of Data Processing of the
National Association of Home Builders.

Harry T. Wilkins is the Chief Financial Officer of the Company and has been
the Director of Financial Affairs of the College since 1992. Prior to joining
the College, Mr. Wilkins was a Director with the accounting firm of Wooden &
Benson, Chartered from 1984 to 1992 and a member of the consulting practice of
the accounting firm of Deloitte Touche (then Deloitte, Haskins and Sells) from
1979 to 1984. Mr. Wilkins is a Certified Public Accountant.

Stanley G. Elmore has been nominated and has agreed to serve as a director
of the Company upon the completion of the Offering. Mr. Elmore has been the
Chairman of the Board of Trustees of the College since 1989. Mr. Elmore has
served as Projects and Programs Manager, Citibank Mid-Atlantic, a position he
has held for more than five years.

Todd A. Milano has been nominated and has agreed to serve as a director of
the Company upon the completion of the Offering. Mr. Milano has been the Vice
Chairman of the Board of Trustees of the College since 1992. Mr. Milano has
served as President and Chief Executive Officer of Central Pennsylvania Business
School since 1989.

Dr. Jennie D. Seaton has been nominated and has agreed to serve as a
director of the Company upon the completion of the Offering. Dr. Seaton has been
a member of the Board of Trustees of the College since 1990. Dr. Seaton is
retired and was College Administrator of Virginia Commonwealth University from
1975 to 1994.

Roland Carey has been nominated and has agreed to serve as a director of
the Company upon the completion of the Offering. Mr. Carey has been a member of
the Board of Trustees of the College since 1990. Mr. Carey is an Instructor with
the Carl Sandburg School, a position he has held for more than five years.

Donald T. Benson has been nominated and has agreed to serve as a director
of the Company upon the completion of the Offering. Mr. Benson has been a member
of the Board of Trustees of the College since 1992. Mr. Benson has served as
Vice President, Human Resources, of Aetna Life Insurance Company since 1992.
From 1976 to 1992, Mr. Benson was Senior Vice President, Human Resources, of
Cigna Insurance Company.

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G. Thomas Waite, III has been nominated and has agreed to serve as a
director of the Company upon the completion of the Offering. Mr. Waite has been
a member of the Board of Trustees of the College since 1994. Mr. Waite has
served as Treasurer for the Humane Society of the United States since 1993. In
1992, Mr. Waite was the Director of Commercial Management of The National
Housing Partnership; from 1986 to 1991, he held the position of Senior Vice
President of Hurst Property Company. As a result of the insolvency of a real
estate partnership in which Mr. Waite served as a general partner, Mr. Waite
filed for protection from creditors under Chapter 11 of the Federal Bankruptcy
Code in 1993, which subsequently was converted to a Chapter 7 filing in 1993.

Dr. Donald Stoddard has been nominated and has agreed to serve as a
director of the Company upon the completion of the Offering. Dr. Stoddard has
been a member of the Board of Trustees of the College since 1995. Dr. Stoddard
is a Professor, Department of English, Anne Arundel Community College, a
position he has held since 1990. From 1979 to 1990, Dr. Stoddard was the
Coordinator, Collegiate Institutional Approval, of the Maryland Higher Education
Commission.

Dr. Charlotte Beason has been nominated and has agreed to serve as a
director of the Company upon the completion of the Offering. Dr. Beason has been
a member of the Board of Trustees of the College since 1995. Dr. Beason is an
Educational Consultant at the U.S. Department of Veterans Affairs/Health Care
Reform Office, a position she has held for more than five years.

Upon completion of the Offering, the director nominees shown in the table
above will begin service as directors of the Company, effective on that date.

Directors of the Company are elected at the annual meeting of stockholders
and serve until their successors are duly elected and qualified or until their
earlier resignation or removal. Executive officers serve at the discretion of
the Board of Directors.

CERTAIN SIGNIFICANT EMPLOYEES OF THE COLLEGE

The following information is supplied with respect to certain other
significant employees of the College:

Younes P. Benab, Ph.D., 59, is the Academic Dean of the College, a position
he has held since 1986.

J. Chris Toe, Ph.D., 41, is the Director, Graduate Programs of the College,
a position he has held since 1994. Dr. Toe joined the College in 1993 as an
adjunct professor, becoming a full-time professor in 1994. Prior to joining the
College, Dr. Toe was an independent consultant.

James F. McCoy, Jr., 37, is the Administrative Dean of the College, a
position he has held since 1994. Mr. McCoy previously was Finance Team Leader,
Phillips Colleges, in 1994; Vice President of Operations, Brenell Institute,
from 1992 to 1994; and Operations Manager, Phillips Colleges, from 1983 to 1992.

Marla Boulter, 41, is the College's Director of College Relations, a
position she has held since 1995. Ms. Boulter joined the College in 1990 as an
accountant and was the College's Director of Marketing from 1991 to 1995.

Don R. Anderson, 53, is the Director of Facilities of the College, a
position he has held since 1988.

Robert E. Farmer, 57, is the Director of Human Resources of the College, a
position he has held since 1995. Mr. Farmer was the Campus Coordinator of the
Arlington campus from 1992 until 1995, and was the Director of Admissions at
that campus from 1990 to 1992.

Piroj Piroolnuruk, 42, is the College's Director of Information Management,
a position he has held since 1992. Mr. Piroolnuruk was the College's coordinator
of Administrative Services from 1986 to 1992.

COMMITTEES OF THE BOARD OF DIRECTORS

Promptly following completion of the Offering, the Board of Directors will
establish an Audit Committee, an Executive Committee and a Compensation
Committee.

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<PAGE> 47

Audit Committee. The Audit Committee will consist of non-management
directors and will make recommendations concerning the engagement of independent
public accountants, review with the independent public accountants the plans and
results of the audit engagement, approve professional services provided by the
independent public accountants and review the adequacy of the Company's internal
accounting controls.

Executive Committee. The Executive Committee will consist of Mr. Bailey
and one or more non-management directors and will exercise such authority as is
delegated to it.

Compensation Committee. The Compensation Committee will consist of Mr.
Bailey and two non-management directors. The Compensation Committee will
determine the compensation of the Company's executive officers, subject to the
provisions of any employment agreements, and will administer the Company's 1996
Stock Option Plan. Mr. Bailey intends to abstain from participating in any
actions of the Compensation Committee affecting his compensation.

COMPENSATION OF THE BOARD OF DIRECTORS

Directors are reimbursed for expenses incurred in connection with their
attendance at Board and Committee meetings, but currently receive no
compensation for serving as directors.

EXECUTIVE COMPENSATION

The following table sets forth the compensation for the last completed
fiscal year paid to the College's Chief Executive Officer. No other executive
officer of the College received salary and bonus exceeding $100,000 in that
fiscal year.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
FISCAL ---------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2)
----------------------------------------- ------ -------- ---------- ---------------
<S> <C> <C> <C> <C>
Ron K. Bailey, President................. 1995 $150,000 $6,175,000 $ 3,181
</TABLE>

- ---------------
(1) The bonus was withheld for payments by Mr. Bailey in respect of income taxes
on undistributed S Corporation income. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Background and
Overview." Other compensation in the form of perquisites and other personal
benefits has been omitted because the aggregate amount of such perquisites
and other personal benefits constituted less than $50,000 or 10% of Mr.
Bailey's total annual salary and bonus.

(2) Reflects (i) $3,043 in matching contributions made by the College to the
College's 401(k) plan for Mr. Bailey and (ii) $138 in premiums paid by the
College for life insurance for Mr. Bailey.

No stock options were granted during the year ended December 31, 1995.

EXECUTIVE EMPLOYMENT AGREEMENTS

Mr. Bailey and the College have entered into an Employment Agreement,
effective as of the Offering closing date, which provides that Mr. Bailey will
serve as President and Chief Executive Officer of the College. For his services,
Mr. Bailey will receive an initial annual salary of $150,000. According to the
terms of the Employment Agreement, Mr. Bailey's salary for successive years may
be increased at the discretion of the College's Board of Trustees. The College
does not currently contemplate payment of bonuses to Mr. Bailey. Future bonuses,
if any, paid to Mr. Bailey will be awarded pursuant to guidelines approved by
the Compensation Committee of the Company's Board of Directors and will be at
levels commensurate with any bonuses paid to other executive officers. The
Employment Agreement provides that in the event that Mr. Bailey's employment is
terminated by the Board of Trustees, Mr. Bailey will be entitled to severance
benefits equal to the amount of his most recent annual salary. The agreement
contains a covenant restricting Mr. Bailey from competing with the College for
three years after the termination of employment.

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<PAGE> 48

The College also has entered into an employment agreement with Mr. Harry T.
Wilkins, Chief Financial Officer of the Company, effective as of the Offering
closing date, which provides for a severance payment equal to one year's salary
if Mr. Wilkins is terminated other than for cause (as defined in the agreement).
The employment agreement also contains a covenant restricting Mr. Wilkins from
competing with the College for three years after the termination of his
employment.

STOCK OPTION PLAN

The Company's 1996 Stock Option Plan (the "Plan") provides for the grant of
options that are intended to qualify as "incentive stock options" under Section
422 of the Internal Revenue Code of 1986, and for grant of non-qualifying
options to directors and employees of the Company. The Plan authorizes the
issuance of up to 1,000,000 Shares pursuant to options granted under the Plan
(subject to anti-dilution adjustments in the event of a stock split,
recapitalization or similar transaction). The Compensation Committee of the
Board of Directors will administer the Plan and will grant options to purchase
Shares.

It is anticipated that options to purchase 700,000 Shares at the initial
public offering price will be granted to employees eligible to participate in
the 401(k) Plan and for all Directors, except for Mr. Bailey, who will not
receive any options under the initial grant. Harry T. Wilkins, the Company's
Chief Financial Officer, will receive options to acquire 200,000 Shares under
the initial grant. All such options will be exercisable at a price equal to the
initial public offering price. Options granted will vest with respect to
one-third of the Shares subject to the option on each of the first, second and
third anniversaries of the date of grant. The options will expire on the fifth
anniversary of the date of grant.

The option exercise price for incentive stock options granted under the
Plan may not be less than 100% of the fair market value of the Shares on the
date of grant of the option (or 110% in the case of an incentive stock option
granted to an optionee beneficially owning more than 10% of the outstanding
Shares). The option exercise price for non-incentive stock options granted under
the Plan may not be less than 100% of the fair market value of the Shares on the
date of grant of the option. The maximum option term is ten years (or five years
in the case of an incentive stock option granted to an optionee beneficially
owning more than 10% of the outstanding Shares). Options may be exercised at any
time after grant, except as otherwise provided in the particular option
agreement. Options covering no more than 500,000 Shares may be granted to any
officer or other employee during the term of the Plan. There is also a $100,000
limit on the value of Shares (determined at the time of grant) covered by
incentive stock options that first become exercisable by an optionee in any
calendar year.

Options granted under the Plan are not transferable and may be exercised
only by the optionee during his or her lifetime. If any optionee's employment
with the Company terminates by reason of death or permanent and total
disability, the optionee's options, whether or not then exercisable, may be
exercised within one year after such death or disability unless otherwise
provided in the option agreement (but not later than the date the option would
otherwise expire). If the optionee's employment terminates for any reason other
than death or disability, options held by such optionee terminate upon such
termination unless otherwise provided in the option agreement or approved by the
Compensation Committee (but not later than the date the option would otherwise
expire). The Compensation Committee may extend the period during which the
option may be exercised (but not later than the date the option would otherwise
expire) by so providing in the option agreement. The options will terminate
within a specified time after the optionee's termination of employment with the
Company.

The Plan provides for formula grants of options to non-employee directors
(an "Eligible Director"). Each Eligible Director at the time of the initial
public offering will be granted an initial option to purchase a number of shares
of Common Stock equal to 1,000 times the number of years the Eligible Director
has served as a director of the Company. Each Eligible Director will also be
granted an additional option to purchase 1,000 shares of Common Stock
immediately after each of the subsequent annual meetings of the Company's
stockholders if the Eligible Director continues to be an Eligible Director.
Options granted to Eligible Directors under the Plan may be exercised with
respect to the shares subject to such option one year after the option is
granted. All options expire five years after the date of grant.

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<PAGE> 49

Upon any dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon the sale of all or substantially all of the
assets of the Company to another corporation, or upon any transaction approved
by the Board of Directors which results in any person or entity owning 80% or
more of the total combined voting power of all classes of stock of the Company,
the Plan and the options issued thereunder will terminate, unless provision is
made in connection with such transaction for the continuation of the Plan and/or
the assumption of the options or for the substitution for such options of new
options covering the stock of a successor corporation or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of Shares and
the per Share exercise price. In the event of such termination, all outstanding
options will be exercisable in full during such period immediately prior to the
occurrence of such termination as the Board of Directors in its discretion will
determine.

The Board of Directors may amend the Plan with respect to Shares as to
which options have not been granted. However, the Company's stockholders must
approve any amendment that would: (i) change the requirements as to eligibility
to receive options; (ii) materially increase the benefits accruing to
participants under the Plan; or (iii) materially increase the number of Shares
that may be sold pursuant to options granted under the Plan (except for
adjustments upon changes in capitalization).

401(k) PLAN

The College maintains a retirement plan (the "401(k) Plan") intended to
qualify under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986.
The 401(k) Plan is a defined contribution plan that covers all full-time
employees of the College of at least 21 years of age, employed by the College
for at least one year. Employees may contribute up to 10% of their annual wages
(subject to an annual limit prescribed by the Code) as pretax, salary deferral
contributions. The College may, in its discretion, match employee contributions
up to a maximum of 15% of annual wages. The College's contributions to the
401(k) Plan for the year ended December 31, 1995 and the three months ended
March 31, 1996 were $94,000 and $0, respectively. As of March 31, 1996, 147 of
the College's current employees were participants in the 401(k) Plan.

CERTAIN TRANSACTIONS

LEASE OF CAMPUS FACILITIES

The College currently leases the facilities of five of its eight campuses
from corporations of which Ron K. Bailey, President and a director of the
Company, is the sole stockholder, a director and an executive officer. The
College from time to time has made distributions to the Current Stockholders in
amounts sufficient to provide the equity necessary for campus acquisitions by
Mr. Bailey. See "Dividend Policy." Such distributions totaled $2.0 million in
1993, $2.8 million in 1994, $3.4 million in 1995 and $650,000 in the three
months ended March 31, 1996. Prior to the Offering, Mr. Bailey pursued a
strategy of purchasing campus facilities in order to avoid the incurrence of
debt by the College. Generally, Mr. Bailey obtained mortgage financing for
acquisition of the facilities and the College entered into long-term leases
obligating it to make monthly rent payments approximately equal to the mortgage
payments and other property-specific expenses. Each lease provided that the
College would have the right to purchase the applicable campus, at the fair
value of such facility as determined by an independent appraisal, in the event
of Mr. Bailey's death. In contemplation of the Offering, and effective as of the
Offering closing date, the parties amended the terms of the leases to reflect
current market conditions. Management believes these terms are at least as
favorable to the College as the

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<PAGE> 50

College could obtain from unaffiliated parties. The following table sets forth
certain information regarding the leases as amended.

<TABLE>
<CAPTION>
GROSS ANNUAL
LEASABLE BASE
CAMPUS LANDLORD AREA(1) RENT(2)
----------------------------------- --------------------------------- -------- --------
<S> <C> <C> <C>
Fredericksburg..................... Fredericksburg Investments, Inc. 17,500 $297,840
Manassas........................... Battleview Investments, Inc. 20,800 353,600
Takoma Park........................ Beacon Investments, Inc. 21,800 370,900
Washington, D.C. .................. Central Investments, Inc. 30,000 750,000
Woodbridge......................... Potomac Investments, Inc. 20,800 353,600
</TABLE>

- ---------------
(1) Square feet.

(2) Subject to annual adjustment based on increases in the Consumer Price Index.

Each of the foregoing leases as amended has a ten-year term expiring in
2006, with three five-year renewal terms. The College has the option under each
lease to purchase the related campus facility at any time during the term of the
lease at the fair market value of such facility as determined by an independent
appraiser. No proceeds of the Offering will be used to purchase any such campus
facility.

The following table sets forth information regarding total annual payments
by the College under the foregoing leases during the periods indicated.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
------------------------------------ ENDED
CAMPUS 1993 1994 1995 MARCH 31, 1996
-------------------------------------- -------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
Fredericksburg........................ $336,000 $ 420,000 $ 474,000 $118,000
Manassas.............................. -- 49,000 396,000 99,000
Takoma Park........................... 160,000 240,000 240,000 60,000
Washington, D.C. ..................... -- 310,000 744,000 187,000
Woodbridge............................ -- -- 42,000 126,000
-------- ---------- ---------- -----------
Total....................... $496,000 $1,019,000 $1,896,000 $590,000
======== ========= ========= ===========
</TABLE>

Prior to entering into its current lease for the Washington, D.C. campus,
the College leased that facility from 817 Fourteenth Street Associates Limited
Partnership. Mr. Bailey owned a 10% limited partnership interest in such entity.
The College made lease payments to such entity of $550,000 and $320,000 in 1993
and 1994, respectively.

The College may lease additional campus facilities from entities owned or
controlled by Mr. Bailey. Any such leases will have market terms based on an
independent appraisal and will be subject to approval by a majority of the
Company's independent directors.

TRANSACTIONS WITH ELP

Educational loans under the SEL Program are purchased from the College and
serviced by ELP. See "Business -- SEL Program." Ron K. Bailey, President and a
director of the Company, has been the sole stockholder, a director and an
executive officer of ELP. In the year ended December 31, 1995 and the three
months ended March 31, 1996, ELP purchased loans from the College at a discount
(reflecting ELP's future loan servicing costs) to their carrying amounts of
approximately $1.4 million and $650,000, respectively. The College provided ELP
office space on a rent-free basis in 1995 and the three months ended March 31,
1996. Upon completion of the Offering, ELP will become a wholly-owned subsidiary
of the Company.

ELP carries its loan receivables at the stated amount of unpaid principal,
reduced by unamortized purchase discount and an allowance for loan losses. The
allowance, which approximated $80,000 as of March 31, 1996, is an amount that
management believes will be adequate to absorb probable losses on existing loans
that may become uncollectible, based on evaluation of the existing loan
portfolio and prior experience.

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<PAGE> 51

The evaluation takes into account such factors as changes in nature and volume
of the portfolio, overall portfolio quality, review of specific problem
receivables, and current economic conditions that may affect the borrowers'
ability to pay. ELP has not incurred significant losses from uncollectible loans
receivable since it commenced operations.

At March 31, 1996, the outstanding principal amount of student loans
receivable was $1.6 million.

A portion of the distributions made by the College to the Current
Stockholders has been applied to fund ELP's operations. See "Dividend Policy."
In March 1996, ELP paid Mr. Bailey $958,000 as a return of capital previously
contributed by Mr. Bailey to fund ELP's purchase of loans under the SEL Program.
This amount was not required by ELP because the volume of loan originations
under the SEL Program was less than the College originally had budgeted.

In 1995, ELP made automobile loans to Mr. Bailey and his two children
totalling $28,000. The loans bore interest at an annual rate of 7.5%. In the
three months ended March 31, 1996, ELP sold the loans to an unrelated third
party at a discount.

TRANSACTIONS WITH PRK INVESTMENTS, INC.

The College retained PRK Investments, Inc. ("PRK") to provide it with a
variety of services, including services related to computer equipment purchasing
and the College's compliance with the HEA and Department of Education
regulations applicable to Title IV Programs. See "Licensing, Accreditation and
Financial Aid Regulation -- Financial Aid Regulation -- Administrative
Capacity." Two-thirds of the PRK common stock is owned by children of Ron K.
Bailey, President and a director of the Company. The College paid PRK
approximately $70,000 and $94,000 for computer equipment purchasing and related
services in 1995 and the three months ended March 31, 1996, respectively. In
addition, pursuant to a contract with PRK, the College made monthly payments of
$20,000 to PRK for Title IV services from January 1, 1996 through May 15, 1996.
Beginning May 16, 1996, the computer equipment purchasing and related services
performed by PRK for the College are performed by employees of ELP, and the
College entered into a contract with ELP for the provision of Title IV services
for a monthly fee of approximately $28,000. The College provided PRK office
space on a rent-free basis in 1995 and the three months ended March 31, 1996.

TRANSACTIONS WITH CAREER TRAINING INSTITUTE, INC.

College faculty and other employees have received computer-related
instruction and training in other occupational skills from Career Training
Institute, Inc. ("CTI"). Eighty percent of the CTI common stock is owned by
children of Ron K. Bailey, President and a director of the Company. The College
paid CTI approximately $8,000, $75,000 and $17,000 for its services in 1994,
1995 and the three months ended March 31, 1996, respectively. Management
believes that CTI has provided such services to the College on terms at least as
favorable to the College as the College could obtain from unaffiliated parties.
The Company believes that the instruction provided by CTI is not competitive
with the current programs of the College.

ELP purchased loans from CTI totalling approximately $76,000 and
approximately $110,000 in 1995 and the three months ended March 31, 1996,
respectively.

REORGANIZATION TRANSACTIONS

In connection with the Offering, the Company will effect the Reorganization
pursuant to which, among other things, the Company will acquire the College and
ELP. See "Reorganization" and "Use of Proceeds."

Prior to completion of the Offering, the Company will enter into a Tax
Indemnification Agreement with the Current Stockholders in consideration of
their consent to the termination of the College's election to be treated as an S
Corporation and to the use of the closing of the books method. See
"Reorganization -- Termination of S Corporation Status." Pursuant to the Tax
Indemnification Agreement, the Company will agree to make additional payments to
the Current Stockholders equal to approximately 43% of any amount by which the
actual taxable income allocable to the Current Stockholders for the 1996 S
Corporation period (as determined for federal income tax purposes) exceeds the
amount previously estimated to be allocable to the

50
<PAGE> 52

Current Stockholders for such period (and the Current Stockholders will agree to
reimburse the Company if they receive payments in excess of approximately 43% of
such actual taxable income). Management does not believe any payments which
would likely be made under the Tax Indemnification Agreement would have a
material effect on the Company's financial condition.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of Common Stock prior to and upon completion of the Offering of each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock. Except as set forth below, no director, director
nominee or executive officer of the Company beneficially owns any of the
outstanding Common Stock.

<TABLE>
<CAPTION>
PERCENT OF CLASS
AMOUNT OF --------------------
NAME OF BENEFICIAL BEFORE AFTER
BENEFICIAL OWNERS OWNERSHIP OFFERING OFFERING
--------------------------------------------------------- ---------- -------- --------
<S> <C> <C> <C>
Ron K. Bailey and Beverly W. Bailey(1)................... 6,000,000 100% 66.7%
</TABLE>

- ---------------
(1) Prior to the Reorganization, which will be consummated upon completion of
the Offering, Mr. and Mrs. Bailey owned 100% (1,000 shares) of the Common
Stock, as joint tenants with a right of survivorship. In connection with
the Reorganization, Mr. and Mrs. Bailey will acquire 5,999,000 shares of
Common Stock in exchange for 100% of the outstanding capital stock of the
College. See "Reorganization -- Formation of Holding Company."

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<PAGE> 53

DESCRIPTION OF CAPITAL STOCK

The Company's Certificate of Incorporation (the "Charter") authorizes the
Company to issue 20,000,000 shares of Common Stock, $.01 par value, and
5,000,000 shares of Preferred Stock, $.01 par value. On the date of this
Prospectus, the Company has 1,000 shares of Common Stock and no shares of
Preferred Stock outstanding. Upon completion of the Offering and the
Reorganization, there will be 9,000,000 shares of Common Stock outstanding,
including an additional 5,999,000 Shares issued to the Current Stockholders,
plus options to acquire up to 700,000 Shares.

COMMON STOCK

Each holder of Common Stock is entitled to one vote per share on all
matters to be voted upon by the stockholders. Stockholders do not have
cumulative voting rights in the election of directors. Subject to preferences
that may be applicable to any outstanding Preferred Stock, the holders of Common
Stock are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the Board of Directors out of funds legally available
therefor. The Company presently intends to pay regular cash dividends on its
Common Stock. See "Dividend Policy." In the event of a liquidation, dissolution
or winding up of the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities, subject to prior
distribution rights of Preferred Stock, if any, then outstanding. The Common
Stock has no preemptive or conversion rights or other subscription rights. All
outstanding shares of Common Stock are, and the Shares of Common Stock offered
hereby will be, when issued and paid for, duly authorized, validly issued, fully
paid and non-assessable. As of the date of this Prospectus, the Current
Stockholders hold all of the outstanding Common Stock.

PREFERRED STOCK

The Company is authorized to issue 5,000,000 shares of undesignated
Preferred Stock. The Board of Directors has the authority to issue the
undesignated Preferred Stock from time to time in one or more series and to
establish the rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued shares of undesignated Preferred Stock and to
fix the number of shares constituting any series and the designation of such
series, without any further vote or action by the stockholders. Any future
issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
stockholders and may adversely affect the voting and other rights of the holders
of Common Stock. At present, the Company has no plans to issue any Preferred
Stock.

CERTAIN CHARTER AND BYLAW PROVISIONS

Stockholders' rights and related matters are governed by Maryland law, the
Company's Charter and its bylaws. Certain provisions of the Charter and bylaws
of the Company, which are summarized below, may make it more difficult to change
the composition of the Company's Board of Directors and may discourage or make
more difficult any attempt by a person or group to obtain control of the
Company.

Voting Requirements. The Company's Charter may not be amended without the
affirmative vote of a majority of the shares entitled to vote generally in the
election of directors, voting as a single voting group. The Company's bylaws may
be amended either by the affirmative vote of a majority of all shares
outstanding and entitled to vote generally in the election of directors, voting
as a single group, or by an affirmative vote of a majority of the Company's
directors then holding office, unless the stockholders prescribe that any such
bylaw may not be amended or repealed by the Board of Directors.

Special Meetings. Under the Company's bylaws, special meetings of the
stockholders may be called by stockholders only if such stockholders hold
outstanding shares representing at least 25% of all votes entitled to be cast on
any issue proposed to be considered at any such special meeting.

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<PAGE> 54

LIMITATION OF LIABILITY

Under Maryland law a corporation formed in Maryland is permitted to limit,
by provision in its charter, the liability of directors and officers so that no
director or officer of the Company shall be liable to the Company or to any
stockholder for money damages except to the extent that (i) the director or
officer actually received an improper benefit in money, property or services,
for the amount of the benefit or profit in money, property or services actually
received, or (ii) a judgment or other final adjudication adverse to the director
or officer is entered in a proceeding based on a finding in a proceeding that
the director's or officer's action was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. The Company's Charter has incorporated the provisions of this law
limiting the liability of directors and officers.

The Company's bylaws require it to indemnify (a) any present or former
director or officer who has been successful, on the merits or otherwise, in the
defense of a proceeding to which he was made a party by reason of his service in
that capacity, against reasonable expenses incurred by him in connection with
the proceeding and (b) any present or former director or officer against any
claim or liability unless it is established that (i) his act or omission was
committed in bad faith or was the result of active or deliberate dishonesty,
(ii) he actually received an improper personal benefit in money, property or
services or (iii) in the case of a criminal proceeding, he had reasonable cause
to believe that his act or omission was unlawful. In addition, the Company's
bylaws require it to pay or reimburse, in advance of final disposition of a
proceeding, reasonable expenses incurred by a present or former director or
officer made a party to a proceeding by reason of his service as a director or
officer provided that the Company shall have received (1) a written affirmation
by the director or officer of his good faith belief that he has met the standard
of conduct necessary for indemnification by the Company as authorized by the
bylaws and (2) a written understanding by or on his behalf to repay the amount
paid or reimbursed by the Company if it shall ultimately be determined that the
standard of conduct was not met. The Company's bylaws also (i) provide that any
indemnification or payment or reimbursement of the expenses permitted by the
bylaws shall be furnished in accordance with the procedures provided for
indemnification and payment of expenses under Section 2-418 of the Maryland
General Corporation Law for directors of Maryland corporations and (ii) permit
the Company such other and further indemnification or payment or reimbursement
of expenses as may be permitted under Section 2-418 of the Maryland General
Corporation Law for directors of Maryland corporations.

CORPORATE ANTI-TAKEOVER PROVISIONS

The Company has elected to include in its Charter provisions exempting it
from the application of the Maryland business combination statute and control
share acquisition statute.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is American
Securities Transfer, Incorporated.

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<PAGE> 55

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for the Common Stock. Sales
of substantial amounts of Common Stock in the public market after the Offering
could adversely affect the market price of the Common Stock.

Upon completion of the Offering, the Company will have 9,000,000 shares of
Common Stock outstanding (9,450,000 if the Underwriters' over-allotment option
is exercised in full), excluding 700,000 shares issuable upon exercise of
options held by employees of the Company. Of these shares, the 3,000,000 shares
of Common Stock offered hereby will be freely transferable without restriction
or further registration under the Securities Act, unless purchased by
"affiliates" of the College as that term is defined in Rule 144 under the
Securities Act. All the remaining shares of Common Stock, consisting of the
6,000,000 shares which will be held by the Current Stockholders upon completion
of the Offering, are "restricted securities" within the meaning of Rule 144. The
Company and the Current Stockholders have agreed with Legg Mason Wood Walker,
Incorporated, the Representative of the Underwriters, not to sell or otherwise
dispose of any shares of Common Stock, or any securities convertible into or
exercisable or exchangeable for shares of Common Stock (subject, in the case of
the Company, to an exception for the grant of options under the Company's stock
option plan), for a period of 180 days after the date of this Prospectus without
the consent of the Representative. With the consent of the Representative, such
shares may be sold before expiration of the 180-day period without prior notice
to the Company's other stockholders or to any public market in which the Common
Stock trades. Commencing 90 days after the date of this Prospectus, and subject
to such consent, all but 1,000 of the 6,000,000 shares owned by the Current
Stockholders will be immediately eligible for sale in the public market subject
to compliance with the volume and other restrictions of Rule 144.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including persons deemed to be affiliates of the
Company, who has beneficially owned shares for at least a two-year period (as
computed under Rule 144) is entitled to sell within any three-month period
commencing 90 days from the date of this Prospectus a number of shares that does
not exceed the greater of (i) 1% of the then outstanding Common Stock (90,000
shares after giving effect to the Offering) or (ii) the average weekly trading
volume in the Common Stock during the four calendar weeks preceding filing of
notice of such sale, and may only sell such shares through unsolicited brokers'
transactions or transactions with a market maker. Sales under Rule 144 are also
subject to certain requirements as to the manner of sale, notice and the
availability of current public information about the Company. However, a person
who is not an affiliate of the issuer for at least 90 days and who has
beneficially owned such shares for at least three years is entitled under Rule
144(k) to sell such shares without regard to the volume or other resale
requirements described above. In addition, Rule 144A under the Securities Act
permits, subject to certain conditions, the sale by the current holders of
restricted securities of all or a portion of their shares to certain "qualified
institutional buyers" as defined in Rule 144A.

The Company is unable to estimate the number of shares of Common Stock that
will be sold under Rule 144 or otherwise because this will depend in part on the
market price for the Common Stock, the personal circumstances of the sellers and
other factors.

54
<PAGE> 56

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, a copy
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part, the Underwriters named below have agreed, severally
and not jointly, through Legg Mason Wood Walker, Incorporated, the
Representative of the Underwriters, to purchase from the Company, and the
Company has agreed to sell to the Underwriters, the numbers of Shares set forth
opposite the name of the respective Underwriter at the Price to Public less the
Underwriting Discount set forth on the cover page of this Prospectus:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
--------------------------------------------------------------- ------------
<S> <C>
Legg Mason Wood Walker, Incorporated...........................
------------
Total.....................................................
==========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the Shares offered hereby if any of the Shares
are purchased.

The Underwriters have advised the Company that they propose to offer all or
a part of the Shares offered hereby directly to the public at the Price to
Public set forth on the cover page of this Prospectus, that they may offer
Shares to certain dealers at a price which represents a concession of per
Share, and that they may allow, and such dealers may reallow, a concession of
not more than per Share to certain other dealers. After the commencement
of the Offering, the Price to Public and the concessions may be changed.

The Company has granted the Underwriters a 30-day option to purchase up to
450,000 additional number of Shares at the Price to Public less the Underwriting
Discount set forth on the cover page of this Prospectus. The Underwriters may
exercise the option only to cover over-allotments, if any, in connection with
the offering of the Shares made hereby. To the extent the Underwriters exercise
the option, each of the Underwriters will have a firm commitment, subject to
certain conditions, to purchase approximately the same percentage of additional
Shares of Common Stock as the number of Shares set forth opposite that
Underwriter's name in the preceding table bears to the total number of Shares
listed in such table.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof.

The Current Stockholders and the Company each have agreed with the
Representative of the Underwriters not to sell or otherwise dispose of any
shares of Common Stock, or any securities convertible into or exercisable or
exchangeable for shares of Common Stock (subject, in the case of the Company, to
an exception for the grant of options under the Company's stock option plan),
for a period of 180 days after the date of this Prospectus without the written
consent of the Representative. See "Shares Eligible for Future Sale."

The Representative of the Underwriters has advised the Company that the
Underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price for the Common Stock will be determined
by negotiation between the Company and the Representative of the Underwriters.
Among the factors to be considered in such negotiations are prevailing market
conditions, the results of operations of the Company in recent periods, the
market capitalizations and stages of

55
<PAGE> 57

development of other companies which the Company and the Representative of the
Underwriters believe to be comparable to the Company, estimates of the business
potential of the Company, the present state of the Company's development and
other factors deemed relevant. The anticipated initial public offering price set
forth on the cover of this Prospectus is subject to change as a result of market
conditions and other factors.

Legg Mason Wood Walker, Incorporated may perform financial services for the
Company or the College from time to time.

LEGAL MATTERS

The legal validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Hogan & Hartson L.L.P., Baltimore, Maryland.
Certain legal matters will be passed upon for the Underwriters by Shaw, Pittman,
Potts & Trowbridge (a partnership including professional corporations),
Washington, D.C.

EXPERTS

The balance sheet of Strayer Education, Inc. as of May 15, 1996, and the
combined balance sheets of Strayer College, Inc. and Affiliate as of December
31, 1995 and 1994, and the related combined statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1995, included in this Prospectus have been included herein in reliance upon
the reports of Coopers & Lybrand L.L.P., independent public accountants, given
upon the authority of that firm as experts in accounting and auditing. The
report for Strayer College, Inc. and Affiliate includes an explanatory paragraph
relating to the restatement of certain payments to the Current Stockholders.

ADDITIONAL INFORMATION

A Registration Statement on Form S-1, including amendments thereto,
relating to the Common Stock offered hereby has been filed by the Company with
the Securities and Exchange Commission (the "Commission"). This Prospectus does
not contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which are omitted pursuant to
the rules and regulations of the Commission. Statements contained in this
Prospectus as to the contents of any contract or any other document referred to
are not necessarily complete and in each instance reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information with respect to the Company and the Common
Stock offered hereby, reference is hereby made to the Registration Statement and
the exhibits and schedules thereto. A copy of the Registration Statement may be
inspected by anyone without charge and may be obtained at prescribed rates at
the Commission at the Public Reference Section of the Commission, maintained by
the Commission at its principal office located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, the Northeast Regional Office located at Seven World
Trade Center, Suite 1300, New York, New York 10048, and the Midwest Regional
Office located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
The Commission also maintains a Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants such as the Company that file electronically with the Commission.

56
<PAGE> 58

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STRAYER EDUCATION, INC.
Report of Independent Accountants.................................................. F- 2
Balance Sheet as of May 15, 1996................................................... F- 3
Notes to Financial Statement....................................................... F- 4
STRAYER COLLEGE, INC. AND AFFILIATE
Report of Independent Accountants.................................................. F- 5
Combined Balance Sheets as of December 31, 1994 and 1995 and March 31, 1996
(unaudited)..................................................................... F- 6
Combined Statements of Income for each of the three years in the period ended
December 31, 1995 and for the three months ended March 31, 1995 and 1996
(unaudited)..................................................................... F- 7
Combined Statements of Stockholders' Equity for each of the three years in the
period ended December 31, 1995 and for the three months ended March 31, 1996
(unaudited)..................................................................... F- 8
Combined Statements of Cash Flows for each of the three years in the period ended
December 31, 1995 and for the three months ended March 31, 1995 and 1996
(unaudited)..................................................................... F- 9
Notes to Combined Financial Statements............................................. F-10
</TABLE>

F-1
<PAGE> 59

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Strayer Education, Inc.

We have audited the accompanying balance sheet of Strayer Education, Inc.
as of May 15, 1996. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Strayer Education, Inc. as
of May 15, 1996, in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Washington, D.C.
May 15, 1996

F-2
<PAGE> 60

STRAYER EDUCATION, INC.
BALANCE SHEET
MAY 15, 1996

<TABLE>
<S> <C>
ASSETS
Cash................................................................................ $1,000
------
Total Assets.............................................................. $1,000
======
STOCKHOLDERS' EQUITY
Stockholders' Equity:
Preferred stock, 5,000,000 shares authorized; no shares issued or outstanding..... $ --
Common stock, par value $.01, 20,000,000 shares authorized; 1,000 shares issued
and outstanding................................................................ 10
Additional paid-in capital.......................................................... 990
------
Total stockholders' equity................................................ $1,000
======
</TABLE>

The accompanying notes are an integral part of this statement.

F-3
<PAGE> 61

STRAYER EDUCATION, INC.
NOTES TO FINANCIAL STATEMENT
MAY 15, 1996

1. ORGANIZATION

Strayer Education, Inc. (Company) was formed on May 10, 1996, as a Maryland
corporation, and was capitalized on May 15, 1996 with cash of $1,000. The
Company has not yet commenced operations.

2. INITIAL PUBLIC OFFERING AND PENDING ACQUISITION

The Company is currently undertaking an initial public offering of its
common stock. Pursuant to the offering, the Company will offer 3,000,000 shares
of its common stock for sale to the public. Prior to the closing of the
offering, the Company will exchange 5,999,000 shares of its common stock for
100% of the outstanding common stock of Strayer College, Inc. (the College). The
College is a proprietary accredited institution of higher education that
provides undergraduate and graduate degrees in various fields of study through
its eight campuses in the District of Columbia and Virginia. The Company will
set aside an additional 1,000,000 shares of common stock for the establishment
of a stock option plan.

3. SUBSEQUENT EVENT

Contemporaneously with the closing of the initial public offering, the
Company intends to acquire Education Loan Processing Inc. (ELP) at a purchase
price equal to ELP's net book value ($1,200,000 as of March 31, 1996) at the
date of acquisition. ELP is wholly owned by a stockholder of the Company and was
established to purchase and service student loans from the College. Under
generally accepted accounting principles, ELP's basis in its assets and
liabilities will be carried over to the Company and the operations of ELP and
the Company will be retroactively combined in a manner similar to a pooling of
interests, because this acquisition is a combination of entities under common
control.

F-4
<PAGE> 62

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees and Stockholders
Strayer College, Inc.

We have audited the accompanying combined balance sheets of Strayer
College, Inc. and Affiliate as of December 31, 1994 and 1995, and the related
combined statements of income, stockholders' equity and cash flows for each of
the three years in the period ended December 31, 1995. These combined financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Strayer
College, Inc. and Affiliate as of December 31, 1994 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

As discussed in Note 12 to the combined financial statements, the
accompanying combined statements of income, stockholders' equity and cash flows
for the years ended December 31, 1993 and 1994 have been restated.

COOPERS & LYBRAND L.L.P.

Washington, D.C.
May 14, 1996

F-5
<PAGE> 63

STRAYER COLLEGE, INC. AND AFFILIATE
COMBINED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, PRO FORMA
------------------ MARCH 31, MARCH 31,
1994 1995 1996 1996
------- ------- ----------- -----------
(UNAUDITED) (UNAUDITED
NOTE 3)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................... $ 5,564 $ 8,992 $11,905 $ 9,806
Investments in marketable securities available for
sale, at market................................ 898 1,742 725 725
Short-term investments -- restricted.............. 403 720 778 778
Tuition receivable, net of allowances for doubtful
accounts of $135, $155, $189 and $189,
respectively................................... 8,813 7,873 7,861 7,861
Inventories....................................... 546 725 718 718
Other current assets.............................. 197 58 -- --
------ ------ ------ ------
Total current assets...................... 16,421 20,110 21,987 19,888
Student loans receivable, net of allowances for
losses......................................... -- 932 1,190 1,190
Property and equipment, net....................... 2,400 2,874 2,867 2,867
Investments in marketable securities available for
sale, at market................................ 925 1,890 3,491 3,491
Other assets...................................... 78 72 72 72
------ ------ ------ ------
Total assets.............................. $19,824 $25,878 $29,607 $27,508
====== ====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable............................ $ 580 $ 360 $ 603 $ 603
Accrued expenses.................................. 458 542 710 710
Unearned tuition.................................. 9,391 9,504 9,423 9,423
Other current liabilities......................... 58 133 307 307
Distribution payable to stockholders.............. -- -- -- 14,042
------ ------ ------ ------
Total current liabilities................. 10,487 10,539 11,043 25,085
------ ------ ------ ------
Commitments and contingencies
Stockholders' Equity:
Common stock...................................... 4 4 4 60
Additional paid-in capital........................ -- 2,100 1,142 1,142
Retained earnings................................. 9,376 13,077 17,163 966
Net unrealized (losses) gains on investments...... (43) 158 255 255
------ ------ ------ ------
Total stockholders' equity................ 9,337 15,339 18,564 2,423
------ ------ ------ ------
Total liabilities and stockholders'
equity.................................. $19,824 $25,878 $29,607 $27,508
====== ====== ====== ======
</TABLE>

The accompanying notes to these combined financial statements
are an integral part of these combined statements.

F-6
<PAGE> 64

STRAYER COLLEGE, INC. AND AFFILIATE
COMBINED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The accompanying notes to these combined financial statements
are an integral part of these combined statements.

F-7
<PAGE> 65

STRAYER COLLEGE, INC. AND AFFILIATE
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
ELP ADDITIONAL COLLEGE UNREALIZED
COMMON STOCK PAID-IN COMMON STOCK GAINS
--------------- CAPITAL --------------- RETAINED (LOSSES) ON
SHARES AMOUNT OF ELP, INC. SHARES AMOUNT EARNINGS INVESTMENTS TOTAL
------ ------ ------------ ------ ------ -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992..... -- $-- $-- 375.5 $4 $ 4,246 $ -- $ 4,250
Distributions to
stockholders............... -- -- -- -- -- (2,046) -- (2,046)
Net income................... -- -- -- -- -- 4,424 -- 4,424
--
------ ------ ------------ ------ -------- ----- -----------
Balance, December 31, 1993..... -- -- -- 375.5 4 6,624 -- 6,628
Distributions to
stockholders............... -- -- -- -- -- (2,800) -- (2,800)
Net unrealized losses on
investments................ -- -- -- -- -- -- (43) (43)
Net income................... -- -- -- -- -- 5,552 -- 5,552
--
------ ------ ------------ ------ -------- ----- -----------
Balance, December 31, 1994..... -- -- -- 375.5 4 9,376 (43) 9,337
Distributions to
stockholders............... -- -- -- -- -- (3,350) -- (3,350)
Issuance of common stock and
additional capital
contributions by ELP
stockholder................ 100 -- 2,100 -- -- -- -- 2,100
Net unrealized gains on
investments................ -- -- -- -- -- -- 201 201
Net income................... -- -- -- -- -- 7,051 -- 7,051
--
------ ------ ------------ ------ -------- ----- -----------
Balance, December 31, 1995..... 100 -- 2,100 375.5 4 13,077 158 15,339
Distributions to
stockholders............... -- -- (958) -- -- (650) -- (1,608)
Net unrealized gains on
investments................ -- -- -- -- -- -- 97 97
Net income................... -- -- -- -- -- 4,736 -- 4,736
--
------ ------ ------------ ------ -------- ----- -----------
Balance, March 31, 1996
(unaudited).................. 100 $-- $1,142 375.5 $4 $17,163 $ 255 $ 18,564
====== ======= =========== ====== ======= ======== ========= ========
</TABLE>

The accompanying notes to these combined financial statements
are an integral part of these combined statements.

F-8
<PAGE> 66

STRAYER COLLEGE, INC. AND AFFILIATE
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEAR ENDED DECEMBER MONTHS ENDED MARCH
31, 31,
----------------------------- ------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income................................... $ 4,424 $ 5,552 $ 7,051 $ 3,092 $ 4,736
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization............. 369 448 688 151 195
Provision for student loan losses......... -- -- 49 3 31
Changes in assets and liabilities:
Short-term investments -- restricted...... -- -- (317) (50) (58)
Tuition receivable, net................... (2,943) 2,230 940 367 12
Inventories............................... (124) 13 (179) (159) 7
Other current assets...................... 31 (65) 167 37 30
Trade accounts payable.................... 419 (18) (220) (103) 243
Accrued expenses.......................... 25 153 83 1,444 169
Unearned tuition.......................... (733) 776 113 10 (81)
Other current liabilities................. (132) (14) 75 92 174
------- ------- ------- ------- -------
Net cash provided by operating
activities......................... 1,336 9,075 8,450 4,884 5,458
------- ------- ------- ------- -------
Cash flows used in investing activities:
Purchases of property and equipment.......... (532) (1,500) (1,162) (467) (188)
Purchases of marketable securities........... (4,386) (6,586) (7,993) (1,422) (1,313)
Sales of marketable securities............... 4,305 5,238 6,386 779 825
Student loans originated or acquired......... -- -- (1,481) (281) (795)
Collections on student loans receivable...... -- -- 500 71 322
Proceeds from sale of loans.................. -- -- -- -- 212
Other........................................ (21) 8 (22) -- --
------- ------- ------- ------- -------
Net cash used in investing
activities......................... (634) (2,840) (3,772) (1,320) (937)
------- ------- ------- ------- -------
Cash flows used in financing activities:
Distributions to stockholders................ (2,046) (2,800) (3,350) (725) (1,608)
Proceeds from issuance of common stock and
additional capital contributions by ELP
stockholder............................... -- -- 2,100 500 --
Other........................................ (74) (62) -- -- --
------- ------- ------- ------- -------
Net cash used in financing
activities......................... (2,120) (2,862) (1,250) (225) (1,608)
------- ------- ------- ------- -------
Net (decrease) increase in cash...... (1,418) 3,373 3,428 3,339 2,913
Cash and cash equivalents -- beginning of
period....................................... 3,609 2,191 5,564 5,564 8,992
------- ------- ------- ------- -------
Cash and cash equivalents -- end of period..... $ 2,191 $ 5,564 $ 8,992 $ 8,903 $11,905
======= ======= ======= ======= =======
</TABLE>

The accompanying notes to these combined financial statements
are an integral part of these combined statements.

F-9
<PAGE> 67

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

1. BASIS OF PRESENTATION

The combined financial statements include the accounts of Strayer College,
Inc. and Education Loan Processing, Inc. (collectively the Companies), both of
which are under the common control of Mr. and Mrs. Ron K. Bailey. All
significant intercompany accounts and transactions have been eliminated.

2. NATURE OF OPERATIONS

Strayer College, Inc. (the College) is a proprietary accredited institution
of higher education that provides undergraduate and graduate degrees in various
fields of study. The College has eight campuses located in the District of
Columbia and Virginia.

Education Loan Processing, Inc. (ELP) is a finance company that purchases
and services student loans, principally for the College. ELP was incorporated in
December 1994 and began operations in January 1995.

The significant components of ELP's balance sheets at December 31, 1995 and
March 31, 1996 were as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
------------ ---------
<S> <C> <C>
Cash and cash equivalents............................. $ 909 $ 361
Investments in marketable securities.................. 498 --
Students loans receivable, net........................ 932 1,190
Due to Strayer College, Inc. ......................... 189 326
Stockholder's equity.................................. 2,126 1,150
</TABLE>

For purposes of the Companies' combined balance sheets, all of ELP's assets
and liabilities have been classified as current assets and liabilities with the
exception of student loans receivable, which have been classified as noncurrent
consistent with industry practice. See Note 5. ELP's revenues and expenses for
the year ended December 31, 1995 and three months ended March 31, 1996 were not
significant.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash and cash equivalents consist of operating cash and cash invested in
short-term certificates of deposit, commercial paper, and U.S. government
obligations. The Companies consider all highly liquid instruments purchased with
an original maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

The Companies place their cash and temporary cash investments with high
credit quality institutions. At times cash and cash equivalent balances may be
in excess of the FDIC insurance limit. The Companies have not experienced any
losses on their cash and cash equivalents.

Tuition receivables are not collateralized, however, credit risk is
minimized as a result of the diverse nature of the College's student base in the
Washington, D.C. area. The College establishes an allowance for doubtful tuition
accounts based upon factors surrounding historical trends and other information.

Student loans are receivable from the College's students. The Companies
perform credit evaluations and require cosigners in some instances to minimize
credit risk. Allowances for loan losses are established as discussed below.

F-10
<PAGE> 68

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

Student Loans Receivable

Student loans receivable are stated at the amount of unpaid principal,
reduced by an allowance for loan losses. Interest income from student loans is
recognized using the interest method.

Provisions for estimated losses on student loans are charged to income in
amounts sufficient to maintain the allowance at a level considered adequate to
cover the losses of principal and interest in the existing loan portfolio, based
upon historical trends, economic conditions and other information. ELP's
charge-off policy is based on a loan-by-loan review; however, any loan more than
120 days past due is written off against the allowance.

Investments

The Companies' investments are considered "available-for-sale," and, as
such, are stated at market value. The net unrealized gains and losses are
reported as a component of stockholders' equity. Realized gains or losses from
the sale of marketable securities are based on the specific identification
method.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and
equipment is calculated using the straight-line method over the estimated useful
lives ranging from 3 to 10 years. Depreciation amounted to $369,000, $448,000
and $688,000 for the years ended December 31, 1993, 1994 and 1995, respectively
and $151,000 and $195,000 for the three months ended March 31, 1995 and 1996,
respectively.

Tuition Revenues

Tuition income is deferred at the time of registration and is recognized as
income, net of any refunds or withdrawals, ratably throughout each respective
quarter session. Advance registrations for the next quarter are shown as
unearned tuition.

Inventories

Inventories, which consist of books and supplies held in campus bookstores,
are valued at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles 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. Actual results could differ from those estimates.

Income Taxes and Pro Forma Information (unaudited)

The financial statements of the Companies do not include a provision for
income taxes because the taxable income of the Companies was included in the
income tax returns of the stockholders under the S Corporation election.

In connection with the formation of Strayer Education, Inc. (Company), the
initial public offering of the Company's common stock (Offering), and the
proposed acquisition of the Companies by the Company, the Companies will no
longer be treated as S Corporations for tax purposes. The Company will be
subject to

F-11
<PAGE> 69

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

federal and state income taxes and will recognize deferred taxes in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"). SFAS No. 109 requires companies subject to income taxes
to adjust their deferred tax assets and liabilities based on temporary
differences between financial statement and tax bases of assets and liabilities
using enacted tax rates in effect in the year in which the differences are
expected to reverse. Based upon temporary differences existing as of December
31, 1995 and March 31, 1996, the net deferred income tax assets are
insignificant individually and in total.

The components of the pro forma income tax provisions are as follows (in
thousands):

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1995 MARCH 31, 1996
----------------- --------------
<S> <C> <C>
Current
Federal................................... $ 4,435 $1,574
State..................................... 605 221
------- -------
5,040 1,795
Deferred....................................... 29 57
------- -------
$ 5,069 $1,852
============= ===========
</TABLE>

The effective pro forma income tax rate differs from the 34% statutory
federal rate principally as a result of state income taxes.

For informational purposes, the combined statements of income for the year
ended December 31, 1995 and the three-month period ended March 31, 1996 include
pro forma information reflecting the following adjustments:

- Pro forma net income gives effect to the reduction of costs and expenses
for the year ended December 31, 1995 by $6,175,000, which represents
payments to a stockholder of the College who also serves as President of
the College, for payment of 1995 income taxes on undistributed S
Corporation income. This adjustment is made solely as a result of the
change in the income tax status of the College that will become effective
subsequent to the proposed acquisition of the College by the Company. As
President and Chief Executive Officer of the College after the
acquisition, the stockholder's duties and responsibilities will not
diminish. However, the taxable income of the College will no longer be
included in the income tax return of the stockholders, but will be paid
directly by the College or the Company, as C Corporation tax payors. The
College believes this adjustment is necessary for investors to
realistically assess the impact of the acquisition and related change in
income tax status on the results of operations of the College.

- Pro forma income taxes reflect the application of statutory corporate
income tax rates to the net income of the Companies as if the termination
of the S Corporation status of the Companies had occurred on January 1,
1995. The effective derived income tax rates for the year ended December
31, 1995 and for the three-month period ended March 31, 1996 were 38.3%
and 39.1%, respectively.

- Pro forma net income per share and weighted average shares outstanding
reflect the acquisition of the College by the Company in exchange for
5,999,000 shares of common stock, and the net proceeds from the issuance
of 1,548,181 shares of common stock in connection with the Offering
necessary to pay the $14,042,000 S Corporation distribution based on the
estimated amount of previously recognized and

F-12
<PAGE> 70

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

undistributed College S Corporation income through March 31, 1996, as if
those events had occurred on January 1, 1995. Historical earnings per share of
the Companies have not been presented because such amounts are not
meaningful in light of the pending transactions described above.

The pro forma combined balance sheet as of March 31, 1996 reflects the
following adjustments as if those adjustments occurred March 31, 1996:

- The April 1996 distributions by the College of $2,100,000 discussed in
Note 11.

- The recognition of a liability for the estimated S Corporation
distribution of $14,042,000 (which is subject to adjustment) to be paid
from the proceeds of the Offering.

- The acquisition of the College by the Company in exchange for 5,999,000
shares of common stock.

The remaining retained earnings after the application of the pro forma
adjustments consist of the following (in thousands):

<TABLE>
<S> <C>
College C Corporation retained earnings at the date of the
acquisition by Ron K. Bailey............................... $938
ELP retained earnings at March 31, 1996...................... 8
Adjustment of College retained earnings in connection with
acquisition of the College by the Company for 5,999,000
shares of common stock..................................... (56)
Common stock of the Company.................................. 1
Effect of combining entries.................................. 75
----
$966
====
</TABLE>

Interim Financial Statements

The results of operations for the three months ended March 31, 1995 and
1996 are not necessarily indicative of the results to be expected for the full
fiscal year. All information as of March 31, 1996 and for the three months ended
March 31, 1995 and 1996 is unaudited but, in the opinion of management, contains
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the combined financial position, results of operations and cash
flows of the Companies.

4. INVESTMENTS

Short-Term Investments -- Restricted

The U.S. Department of Education requires Title IV Program loan funds
collected in excess of amounts due for tuition to be kept in a separate cash or
cash equivalent account until such amounts can be remitted to students. These
funds are invested in short-term U.S. Treasury Notes with maturities of three
months or less.

Investments in Marketable Securities

Effective January 1, 1994, the Companies adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" (SFAS 115). The effect of adopting SFAS No. 115 was not
material. Under SFAS 115, the marketable securities of the Companies have been
classified as available for sale and are carried at market.

F-13
<PAGE> 71

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

4. INVESTMENTS -- (CONTINUED)

The cost and market value for each class of investments at December 31,
1994 and 1995 are as follows (in thousands):

<TABLE>
<CAPTION>
1994 1995
----------------------------------------- -----------------------------------------
GROSS GROSS GROSS GROSS
UNREALIZED UNREALIZED MARKET UNREALIZED UNREALIZED MARKET
COST GAINS LOSS VALUE COST GAINS LOSS VALUE
------ ---------- ---------- ------ ------ ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government
obligations.............. $ 934 $-- $(10) $ 924 $2,499 $ 80 $-- $2,579
Equity securities.......... 932 -- (33) 899 975 78 -- 1,053
------ --- ----- ------ ------ ---- --- ------
Total................. $1,866 $-- $(43) $1,823 $3,474 $158 $-- $3,632
====== === ===== ====== ====== ==== === ======
</TABLE>

The cost and market value for each class of investment at March 31, 1996 is
as follows (in thousands):

<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
------ ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Government obligations..................... $1,640 $ 31 $-- $1,671
Equity securities............................... 2,468 77 -- 2,545
------ ---- --- ------
Total...................................... $4,108 $108 $-- $4,216
====== ==== === ======
</TABLE>

The contractual maturities of U.S. Government obligations at December 31,
1995 are as follows (in thousands):

<TABLE>
<CAPTION>
MARKET
COST VALUE
------ ------
<S> <C> <C>
Due in one year or less..................................... $ 678 $ 689
Due after one year through five years....................... 1,351 1,402
Due after five years through 10 years....................... 470 488
------ ------
Total.................................................. $2,499 $2,579
====== ======
</TABLE>

Included in investment income for the years ended December 31, 1994 and
1995 and for the three months ended March 31, 1995 and 1996, were the following
proceeds from the sale of securities:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
---------------- ------------
1994 1995 1995 1996
------ ------ ---- ----
<S> <C> <C> <C> <C>
Gross realized gains................................... $ -- $ -- $ -- $ 14
Gross realized losses.................................. 29 -- -- --
Proceeds............................................... 5,238 6,386 779 825
</TABLE>

F-14
<PAGE> 72

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

5. STUDENT LOANS RECEIVABLE

Student loans receivable are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
------------ ---------
<S> <C> <C>
Student loans receivable outstanding, including
accrued interest.................................... $981 $ 1,270
Allowance for loan losses............................. (49) (80)
------ ---------
Student loans receivable, net.................... $932 $ 1,190
========== =======
</TABLE>

The interest rate on student loans is generally 7.5%.

The Companies believe the carrying value of the student loans approximates
their fair value.

Annual principal payments due under the student loans outstanding at
December 31, 1995 are as follows (in thousands):

<TABLE>
<S> <C>
1996................................................................. $641
1997................................................................. 222
1998................................................................. 64
1999 through 2001.................................................... 54
----
Total........................................................... $981
====
</TABLE>

As of December 31, 1995 and for the three months ended March 31, 1996, the
Companies do not have any student loans receivable which have been identified as
impaired.

6. PROPERTY AND EQUIPMENT

The composition of property and equipment is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- MARCH 31,
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Furniture and equipment............... $ 2,965,000 $ 3,910,000 $ 4,097,000
Leasehold improvements................ 894,000 1,092,000 1,093,000
Vehicles.............................. 44,000 63,000 63,000
----------- ----------- -----------
3,903,000 5,065,000 5,253,000
Less -- accumulated depreciation.... (1,503,000) (2,191,000) (2,386,000)
----------- ----------- -----------
$ 2,400,000 $ 2,874,000 $ 2,867,000
========== ========== ==========
</TABLE>

F-15
<PAGE> 73

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

7. STOCKHOLDERS' EQUITY

The Companies' outstanding common stock at December 31, 1995 is summarized
below:

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES ISSUED
PAR VALUE SHARES AND
PER SHARE AUTHORIZED OUTSTANDING
--------- ---------- -------------
<S> <C> <C> <C>
Strayer College, Inc. ...................... $ 10.00 500 375.5
Education Loan Processing, Inc. ............ $ 1.00 5,000 100
</TABLE>

The Companies' individual retained earnings as of December 31, 1995 and
March 31, 1996 were as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, 1995 MARCH 31, 1996
----------------- --------------
<S> <C> <C>
Strayer College, Inc. ......................... $13,002 $ 17,080
Education Loan Processing, Inc. ............... 15 8
Effect of combining entries.................... 60 75
----------------- --------------
Total..................................... $13,077 $ 17,163
============= ===========
</TABLE>

8. COMMITMENTS AND CONTINGENCIES

Federal Financial Assistance Programs

The College participates in various federal student financial assistance
programs which are subject to audit. Management believes that the potential
effects of audit adjustments, if any, for the periods currently under audit and
for the periods not yet audited will not have a material adverse effect on the
Companies' financial position, results of operations or cash flows.

Lease Commitments

The College has long-term noncancelable operating leases for its various
campus locations. Rent expense was $2,406,000, $3,309,000 and $3,227,000 for the
years ended December 31, 1993, 1994 and 1995, respectively, and $787,000 and
$826,000 for the three months ended March 31, 1995 and 1996, respectively. The
College has the option to buy certain of these campus properties at their fair
market value as determined by independent appraisal. The Washington D.C.
campuses and three of the Virginia campuses are leased from a stockholder of the
College. Rent paid to the stockholder was $1,046,000, $1,339,000 and $1,896,000
for the years ended December 31, 1993, 1994 and 1995, respectively, and $464,000
and $590,000 for the three months ended March 31, 1995 and 1996, respectively.

F-16
<PAGE> 74

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

8. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)

The rents on these leases are subject to an annual increase based on a
stipulated price index. The minimum rental commitments for the College as of
December 31, 1995 are as follows:

<TABLE>
<CAPTION>
AMOUNT PAYABLE
TO STOCKHOLDER
TOTAL INCLUDED IN TOTAL
----------- -----------------
<S> <C> <C>
1996............................................. $ 3,328,000 $ 2,118,000
1997............................................. 3,312,000 2,118,000
1998............................................. 3,173,000 2,118,000
1999............................................. 2,904,000 2,118,000
2000............................................. 2,730,000 2,118,000
Thereafter....................................... 12,291,000 11,265,000
----------- -----------------
Total....................................... $27,738,000 $21,855,000
========== ============
</TABLE>

In connection with the Offering, the College is negotiating with a
stockholder to modify the terms of the leases beginning in 1996.

9. RETIREMENT BENEFIT PLANS

The College has a 401(k) profit sharing trust covering all eligible
employees. Participants may defer a percentage of their salaries or make
contributions up to 10% of their total compensation. Employee contributions are
voluntary. Discretionary contributions are made by the College in the fourth
quarter of each year, and were $44,000, $88,000 and $94,000 for the years ended
December 31, 1993, 1994 and 1995, respectively.

ELP sponsors a Salary Reduction Simplified Employee Pension Plan under
Section 408(k) of the Internal Revenue Code. Qualified employees may defer up to
$9,240 (for 1995) per year in earnings, subject to certain participation
requirements and limitations. ELP may not make contributions to an employee's
pension account.

10. RELATED PARTY TRANSACTIONS

Beginning in 1995, the College retained PRK Investments, Inc. ("PRK") to
provide it with a variety of services including services related to computer
equipment purchasing and the College's compliance with the HEA and Department of
Education regulations applicable to Title IV Programs. Two thirds of the PRK
common stock is owned by children of the stockholders of the College. The
College paid PRK $70,000 and $94,000 for computer equipment purchasing and
related services for the year ended December 31, 1995 and the three months ended
March 31, 1996, respectively. In addition, pursuant to a contract with PRK, the
College made monthly payments of $20,000 to PRK for Title IV services from
January 1, 1996 through May 15, 1996. Beginning May 16, 1996, the computer
equipment purchasing and related services performed by PRK for the College are
performed by employees of ELP. The College provided PRK office space at its old
Huntington Campus location at no cost in 1995 and the first quarter of 1996 at
an estimated cost to the College of $18,000 and $5,000 for the year ended
December 31, 1995 and the three months ended March 31, 1996, respectively.

Beginning in 1994, College faculty and other employees have received
computer-related instruction and training in other occupational skills from
Career Training Institute, Inc. ("CTI"). Eighty percent of the CTI common stock
is owned by children of the stockholders of the College. The College paid CTI
$8,000, $75,000

F-17
<PAGE> 75

STRAYER COLLEGE, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF MARCH 31, 1995 AND 1996 IS UNAUDITED)

10. RELATED PARTY TRANSACTIONS -- (CONTINUED)

and $17,000 for its services for the years ended December 31, 1994 and 1995 and
for the three months ended March 31, 1996, respectively. ELP purchased loans
from CTI totalling $76,000 and $110,000 in 1995 and the three months ended March
31, 1996, respectively.

ELP has made loans to Mr. Bailey and his two children aggregating $28,000
and $0 at December 31, 1995 and March 31, 1996, respectively. Such loans bear
interest at 7.5%. Interest income and accrued interest on the loans was
insignificant.

See Note 8 for additional related party transactions.

11. SUBSEQUENT EVENT

In April 1996, the College distributed $2.1 million to its stockholders for
expected tax liabilities in respect to estimated income earned by the College
during the period January 1, 1996 to May 31, 1996.

12. PRIOR PERIOD ADJUSTMENTS

Historically, the College has made distributions to the stockholders which
the stockholders used to fund the acquisition of campus facilities later leased
to the College (See Note 5). In 1995, the College's stockholders also used a
portion of the distributions to establish and capitalize ELP. Total
distributions during the years ended December 31, 1993, 1994 and 1995 were
$2,046,000, $2,800,000 and $3,350,000, respectively.

Previously, the distributions for the years ended December 31, 1993 and
1994 were reported as general and administrative expenses, however these
distributions were not paid and reported on Form W-2 as compensation to a
stockholder. Such distributions have been reported as distributions to
stockholders in the accompanying statements of income, stockholders equity and
cash flows, so that the classification is consistent with the nature of the
transactions.

F-18
<PAGE> 76
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 7
The Company............................ 12
Reorganization......................... 12
Use of Proceeds........................ 14
Capitalization......................... 15
Dividend Policy........................ 15
Dilution............................... 16
Selected Financial Data................ 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 19
Business............................... 24
Licensing, Accreditation and Financial
Aid Regulation....................... 33
Management............................. 44
Certain Transactions................... 48
Principal Stockholders................. 51
Description of Capital Stock........... 52
Shares Eligible for Future Sale........ 54
Underwriting........................... 55
Legal Matters.......................... 56
Experts................................ 56
Additional Information................. 56
Index to Financial Statements.......... F-1
</TABLE>

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

3,000,000 SHARES

[STRAYER LOGO]

STRAYER EDUCATION, INC.

COMMON STOCK
------------------------

PROSPECTUS

------------------------
LEGG MASON WOOD WALKER
INCORPORATED
, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 77

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee and NASD filing fee, all amounts are estimates.

<TABLE>
<S> <C>
SEC registration fee.............................................. $ 13,086
NASD filing fee................................................... 5,000
Nasdaq National Market Listing Fee................................ 40,000
Accounting fees and expenses...................................... 200,000
Legal fees and expenses........................................... 275,000
Blue Sky fees and expenses (including counsel fees)............... 20,000
Printing and Engraving expenses................................... 125,000
Transfer Agent and Registrar fees and expenses.................... 4,000
Miscellaneous Expenses............................................ 17,914
--------
Total................................................... $700,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Charter provides that, to the fullest extent that limitations
on the liability of directors and officers are permitted by the Maryland General
Corporation Law, no director or officer of the College shall have any liability
to the College or its stockholders for monetary damages. The Maryland General
Corporation Law provides that a corporation's charter may include a provision
which restricts or limits the liability of its directors or officers to the
corporation or its stockholders for money damages except: (1) to the extent that
it is provided that the person actually received an improper benefit or profit
in money, property or services, for the amount of the benefit or profit in
money, property or services actually received, or (2) to the extent that a
judgment or other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The Company's
Charter and By-laws provide that the Company shall indemnify and advance
expenses to its currently acting and its former directors to the fullest extent
permitted by the Maryland General Corporation Law and that the Company shall
indemnify and advance expenses to its officers to the same extent as its
directors and to such further extent as is consistent with law.

The Charter and By-laws provide that the Company will indemnify its
directors and officers and may indemnify employees or agents of the Company to
the fullest extent permitted by law against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Company. In addition, the Company's Charter provides that its
directors and officers will not be liable to stockholders for money damages,
except in limited instances. However, nothing in the Charter or By-laws of the
Company protects or indemnifies a director, officer, employee or agent against
any liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. To the extent that a director has been
successful in defense of any proceeding, the Maryland General Corporation Law
provides that he shall be indemnified against reasonable expenses incurred in
connection therewith.

The form of underwriting agreement, filed as Exhibit 1.1 hereto, contains
provisions by which the Underwriters agree to indemnify the Registrant and each
officer, director and controlling person of the Registrant against certain
liabilities.

II-1
<PAGE> 78

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On May 15, 1996, the Company issued 1,000 shares of Common Stock to Mr. and
Mrs. Ron K. Bailey, as joint tenants with a right of survivorship for $1,000 in
cash. No underwriting discount or commission was paid in connection with the
sale. The sale was effected without registration under the Securities Act in
reliance on the exemption provided by Section 4(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -------------------------------------------------------------------------
<C> <C> <S>
1.01 ** -- Proposed form of Underwriting Agreement.
3.01 ** -- Certificate of Incorporation of the Company.
3.02 -- Amended and Restated Bylaws of the Company.
4.01 -- Specimen Stock Certificate.
5.01 -- Opinion of Hogan & Hartson L.L.P. as to the legality of the Common Stock
being registered.
10.01 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College, Inc.
and Fredericksburg Investments, Inc.
10.02 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College, Inc.
and Beacon Investments, Inc.
10.03 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College, Inc.
and Battleview Investments, Inc.
10.04 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College, Inc.
and Central Investments, Inc.
10.05 ** -- Lease Agreement, dated as of June 1, 1996, between Strayer College, Inc.
and Potomac Investments, Inc.
10.06 -- Lease Agreement, dated as of April 22, 1991, between Strayer College,
Inc. and Cross Creek Associates Limited Partnership.
10.07 -- Lease Agreement, dated as of October 1, 1991, between Strayer College,
Inc. and GLM-Highland Building Limited Partnership.
10.08 -- Lease Agreement, dated as of June 15, 1993, between Strayer College, Inc.
and Alexandria Tech Center I.
10.09 ** -- Employment Agreement, dated as of June 1, 1996, between Strayer
Education, Inc. and Ron K. Bailey.
10.10 ** -- Employment Agreement, dated as of June 1, 1996, between Strayer College,
Inc. and Harry T. Wilkins.
10.11 ** -- 1996 Stock Option Plan
10.12 ** -- Form of Tax Indemnification Agreement
10.13 -- First Amendment to Agreement of Lease for Office Condominium Space, dated
July 25, 1994, between Strayer College, Inc. and Cross Creek Associates
Limited Partnership.
23.01 -- Consent of Hogan & Hartson L.L.P. (contained in Exhibit 5.01).
23.02 -- Consent of Coopers & Lybrand L.L.P.
24.01 -- Power of Attorney (contained in signature page).
27 **+ -- Financial Data Schedule.
99.01 ** -- Consents of Stanley G. Elmore, Todd A. Milano, Dr. Jennie D. Seaton,
Roland Carey, Donald T. Benson, G. Thomas Waite, III, Dr. Donald Stoddard
and Dr. Charlotte Beason.
</TABLE>

- ---------------

** Previously filed.

+ Included in electronic filing via EDGAR.

II-2
<PAGE> 79

(b)Financial Statement Schedules:

Schedule II -- Valuation and Qualifying Accounts and report thereon

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being,
made, a post-effective amendment to this registration statement; (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933 (the "Securities Act"); (ii) to reflect in the prospectus any facts
or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set
forth in the registration statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of this chapter at the start of
any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3) of the
Securities Act need not be furnished, provided, that the registrant
includes in the prospectus, by means of a post effective amendment,
financial statements required pursuant to this paragraph (a) (4) and other
information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial
statements.

The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 80

SIGNATURES AND POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Washington, District of Columbia, on July 15, 1996.

STRAYER EDUCATION, INC.

By: /s/ RON K. BAILEY
----------------------------------
Ron K. Bailey
Chief Executive Officer and
President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.

<TABLE>
<C> <S> <C>
Chief Executive Officer, President July 15, 1996
/s/ RON K. BAILEY and Director (Principal Executive
- ------------------------------------- Officer)
Ron K. Bailey

/s/ HARRY T. WILKINS Chief Financial Officer (Principal July 15, 1996
- ------------------------------------- Financial Officer and Principal
Harry T. Wilkins Accounting Officer)
</TABLE>

II-4
<PAGE> 81

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees and Stockholders

Strayer College, Inc.

In connection with our audits of the combined financial statements of
Strayer College, Inc., and Affiliate as of December 31, 1994 and 1995, and for
each of the three years in the period ended December 31, 1995, which financial
statements are included in the Prospectus, we have also audited the combined
financial statement schedule listed in Item 16 of Part II of the Registration
Statement herein.

In our opinion, this combined financial statement schedule, when considered
in relation to the basic combined financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

Coopers & Lybrand L.L.P.

Washington, D.C.

May 14, 1996

<PAGE> 82

STRAYER COLLEGE, INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
BALANCE ADDITIONS BALANCE
BEGINNING OF CHARGED TO END OF
DESCRIPTION PERIOD EXPENSE DEDUCTIONS PERIOD
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deduction from asset account:
Allowance for doubtful accounts:
Three months ended March 31, 1996 (unaudited)... $155 $101 $ (67) $ 189
Year ended December 31, 1995.................... 135 655 (635) 155
Year ended December 31, 1994.................... 453 665 (983) 135
Year ended December 31, 1993.................... 210 853 (610) 453
Allowance for loan loss:
Three months ended March 31, 1996 (unaudited)... 49 31 -- 80
Year ended December 31, 1995.................... -- 49 -- 49
</TABLE>

S-1
<PAGE> 83

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ---------------------------------------------------------------------- ------------
<C> <C> <S> <C>
1.01 ** -- Proposed form of Underwriting Agreement...............................
3.01 ** -- Certificate of Incorporation of the Company...........................
3.02 -- Amended and Restated Bylaws of the Company............................
4.01 -- Specimen Stock Certificate............................................
5.01 -- Opinion of Hogan & Hartson L.L.P. as to the legality of the Common
Stock being registered................................................
10.01 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College,
Inc. and Fredericksburg Investments, Inc. ............................
10.02 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College,
Inc. and Beacon Investments, Inc. ....................................
10.03 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College,
Inc. and Battleview Investments, Inc. ................................
10.04 ** -- Lease Agreement, dated as of June 1, 1996 between Strayer College,
Inc. and Central Investments, Inc. ...................................
10.05 ** -- Lease Agreement, dated as of June 1, 1996, between Strayer College,
Inc. and Potomac Investments, Inc. ...................................
10.06 -- Lease Agreement, dated as of April 22, 1991, between Strayer College,
Inc. and Cross Creek Associates Limited Partnership...................
10.07 -- Lease Agreement, dated as of October 1, 1991, between Strayer College,
Inc. and GLM-Highland Building Limited Partnership....................
10.08 -- Lease Agreement, dated as of June 15, 1993, between Strayer College,
Inc. and Alexandria Tech Center I.....................................
10.09 ** -- Employment Agreement, dated as of June 1, 1996, between Strayer
Education, Inc. and Ron K. Bailey.....................................
10.10 ** -- Employment Agreement, dated as of June 1, 1996, between Strayer
College, Inc. and Harry T. Wilkins....................................
10.11 ** -- 1996 Stock Option Plan................................................
10.12 ** -- Form of Tax Indemnification Agreement.................................
10.13 -- First Amendment to Agreement of Lease for Office Condominium Space,
dated July 25, 1994, between Strayer College, Inc. and Cross Creek
Associates Limited Partnership........................................
23.01 -- Consent of Hogan & Hartson L.L.P. (contained in Exhibit 5.01).........
23.02 -- Consent of Coopers & Lybrand L.L.P. ..................................
24.01 -- Power of Attorney (contained in signature page).......................
27 **+ -- Financial Data Schedule...............................................
99.01 ** -- Consents of Stanley G. Elmore, Todd A. Milano, Dr. Jennie D. Seaton,
Roland Carey, Donald T. Benson, G. Thomas Waite, III, Dr. Donald
Stoddard and Dr. Charlotte Beason.....................................
</TABLE>

- ---------------

** Previously filed.

+ Included in electronic filing via EDGAR.

<PAGE> 1
Exhibit 3.02

AMENDED AND RESTATED

BYLAWS

STRAYER EDUCATION, INC.

ARTICLE I. OFFICES

SECTION 1. PRINCIPAL OFFICE

The address of the principal office of the Corporation in the
State of Maryland shall be 32 South Street, Baltimore, Maryland 21202, c/o the
Corporation Trust Incorporated. The name of the resident agent of the
Corporation in the State of Maryland is the Corporation Trust Incorporated, a
resident of the State of Maryland whose address is 32 South Street, Baltimore,
Maryland 21202.

SECTION 2. OTHER OFFICES

The Corporation may also have other offices at locations both
within and without the State of Maryland as the Board of Directors may
determine or as the business of the Corporation may require.

ARTICLE II. MEETINGS OF STOCKHOLDERS

SECTION 1. PLACE OF MEETINGS

All meetings of the stockholders of the Corporation shall be
held at the principal office of the Corporation or at any other place in the
United States as may be designated by the Board of Directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.

SECTION 2. ANNUAL MEETINGS

The annual meeting of stockholders of the Corporation for the
election of directors and the transaction of other business as may properly be
brought before the meeting shall be held in the month of May commencing with
the year 1997 on a day and beginning at a time as shall be set by the Board of
Directors. Any business of the Corporation may be transacted at the annual
meeting without being specified in the notice thereof, except as otherwise
provided by law.

SECTION 3. SPECIAL MEETINGS

Special meetings of stockholders of the Corporation for any
purpose or purposes may be called at any time by the President or the Board of
Directors, and
<PAGE> 2
shall be called by the Secretary upon the written request of stockholders
entitled to cast at least 25 percent of all votes entitled to be cast at the
meeting. The request shall state the purpose or purposes of the meeting and
the matters proposed to be acted on thereat. Upon receipt of the request, the
Secretary shall inform the stockholders of the reasonably estimated cost of
preparing and mailing a notice of the meeting and, upon payment of the costs to
the Corporation, the Secretary shall give notice to each stockholder entitled
to notice of the meeting. No special meeting need be called upon the request
of stockholders entitled to cast less than a majority of all votes entitled to
be cast at a meeting to consider any matter which is substantially the same as
a matter voted on at any special meeting of stockholders held during the
preceding 12 months.

SECTION 4. CONDUCT OF MEETINGS

All meetings of stockholders shall be conducted in accordance
with the most current edition of Robert's Rules of Order, unless otherwise
provided by law or these Bylaws.

SECTION 5. NOTICE OF MEETINGS; WAIVER OF NOTICE

Written notice of the time and place of each meeting of
stockholders, and the purpose of any special meeting, shall be given to each
stockholder entitled to vote at or to notice of the meeting not less than 10
nor more than 90 days before the date of the meeting, either personally
delivered to him, left at his residence or usual place of business, or mailed
to him, postage prepaid, at his address as it appears on the records of the
Corporation. No notice of the time, place, or purpose of any meeting of
stockholders need be given to any stockholder entitled to the notice who is
present in person or is represented by proxy at the meeting, or who, either
before or after the meeting, executes a written waiver of notice which shall be
filed by the Secretary with the records of meetings of stockholders, as
provided by these Bylaws.

SECTION 6. RECORD DATE AND CLOSING OF TRANSFER BOOKS

For the purpose of determining the stockholders entitled to
notice of or to vote at any meeting of stockholders, or any adjournment
thereof, or entitled to receive dividends or be allotted any other right, or
for any other proper purpose, the Board of Directors may fix, in advance, a
record date, which shall be not more than 90 days before the date on which the
action requiring the determination will be taken, or the Board of Directors may
direct that the stock transfer books be closed for a stated period, not to
exceed 20 days. In the case of a meeting of stockholders, the record date or
the closing of the transfer books shall be at least 10 days before the date of
the meeting. Except as otherwise provided by law, the record date may not be
prior to the close of business on the day the record date is fixed.

-2-
<PAGE> 3
SECTION 7. QUORUM

Unless otherwise provided by law or the Articles of
Incorporation of the Corporation, the presence in person or by proxy of
stockholders entitled to cast a majority of all votes entitled to be cast at a
meeting shall constitute a quorum at all meetings of stockholders. The
stockholders entitled to cast a majority of the votes so represented may
adjourn the meeting from time to time without further notice other than
announcement at the meeting to a date not more than 120 days after the original
record date. At the adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. The stockholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding any absence or withdrawal of any stockholder or stockholders
during the meeting that has or have the effect of reducing the number of
stockholders remaining in attendance at the meeting to less than a quorum.

SECTION 8. PROXIES

At all meetings of stockholders of the corporation, a
stockholder may vote either in person or by written proxy signed by the
stockholder or by his duly authorized attorney in fact. No proxy shall be
valid for more than eleven (11) months after its date, unless the proxy
otherwise provides.

SECTION 9. VOTING

At all meetings of stockholders of the Corporation, each
outstanding share of Common Stock as of the record date of the meeting shall be
entitled to one vote on each matter submitted to a vote. A majority of all the
votes cast at a meeting at which a quorum is present is sufficient to approve
any matter which properly comes before the meeting unless otherwise provided by
law or the Articles of Incorporation of the Corporation. Candidates for
election as members of the Board of Directors who receive the highest number of
votes at a meeting at which a quorum is present, up to the number of directors
to be chosen, shall stand elected, and an absolute majority of the votes cast
shall not be a prerequisite to the election of any candidate to the Board of
Directors.

SECTION 10. LIST OF STOCKHOLDERS

The Secretary of the Corporation shall prepare a list of the
stockholders entitled to vote at any meeting of stockholders, arranged in
alphabetical order, and indicating the number of shares of stock held by each
stockholder as of the record date for the meeting. The list of stockholders
shall be kept at the place of the meeting of stockholders during the meeting.

-3-
<PAGE> 4
SECTION 11. INFORMAL ACTION

Any action required or permitted to be taken at a meeting of
stockholders may be taken without a meeting if the following documents are
filed with the records of stockholder meetings: (a) a written consent which
sets forth the action and is signed by each stockholder entitled to vote on the
matter, and (b) a written waiver of any right to dissent signed by each
stockholder entitled to notice of the meeting, but not entitled to vote at the
meeting.

ARTICLE III. BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS

The business and affairs of the Corporation shall be managed
under the direction of the Board of Directors, which shall have and exercise
all powers of the Corporation, except as conferred upon or reserved to the
stockholders by law, the Articles of Incorporation of the Corporation or these
Bylaws.

SECTION 2. NUMBER AND TERM

The Board of Directors of the Corporation shall consist of
nine (9) directors, or any other number as a majority of the entire Board of
Directors shall determine from time to time; provided, however, that so long as
the Corporation has less than three stockholders, the number of directors may
be less than three but, in that case, shall not be less than the number of
stockholders. Directors shall be elected at the annual meeting of stockholders
and shall hold office until the next annual meeting of stockholders and until
their respective successors are elected and qualify.

SECTION 3. QUALIFICATIONS

Unless otherwise provided by law, the Articles of
Incorporation of the Corporation, or these Bylaws, directors need not be
stockholders of the Corporation.

SECTION 4. REGULAR MEETINGS

The regular annual meeting of the Board of Directors shall be
held without notice immediately after and at the same place as the annual
meeting of stockholders. Other regular meetings of the Board of Directors may
be held without notice at a time and place as shall from time to time be
determined by resolution of Directors.

SECTION 5. SPECIAL MEETINGS

Special meetings of the Board of Directors may be called by
the President and shall be called by the Secretary upon the written request of
the

-4-
<PAGE> 5
directors. Special meetings of the Board of Directors shall be held at any
place in or out of the State of Maryland as the Board may from time to time
determine by resolution or as shall be specified in any notice or waiver of
notice of the meeting.

SECTION 6. NOTICE; WAIVER OF NOTICE

Written notice of any special meeting of the Board of
Directors shall be given to each director at least one day prior thereto either
personally or by telegram, or at least five days prior thereto by mail,
addressed to the director at his address as it appears in the records of the
Corporation. The notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid, or when
delivered to the telegraph company if sent by telegram. Any director may waive
notice of any meeting, either before or after the meeting, by signing a waiver
of notice which is filed with the records of the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of the meeting,
except where the director attends the meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at nor the purpose of any meeting of the Board of Directors
need be specified in the notice or waiver of notice of the meeting.

SECTION 7. QUORUM; MANNER OF ACTING

A majority of the entire Board of Directors shall constitute a
quorum for transaction of business at any meeting of the Board of Directors.
If a quorum is not present at any meeting, the directors present may adjourn
the meeting. Notice of any adjourned meeting shall be given in the same manner
as prescribed by Section 6 of this Article III. Unless a greater proportion is
required by law, the Articles of Incorporation of the Corporation or these
Bylaws, the action of a majority of the directors present at a meeting at which
a quorum is present shall be the action of the Board of Directors.

SECTION 8. ACTION WITHOUT A MEETING; TELEPHONE MEETING

Any action required or permitted to be taken at a meeting of
the Board of Directors, or any committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so taken, is signed
by each member of the Board or committee and filed with the minutes of
proceedings of the Board or committee. Members of the Board of Directors, or
any committee thereof, may participate in meetings by means of a conference
telephone or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. The
participation shall constitute presence in person at the meeting.

SECTION 9. RESIGNATION AND REMOVAL

-5-
<PAGE> 6
Any director may resign at any time by giving written notice
of the resignation to the President or the Secretary at the principal office of
the Corporation. Unless otherwise specified therein, the resignation shall
take effect upon receipt thereof. The stockholders of the Corporation may
remove any director, with or without cause, by the affirmative vote of a
majority of all votes entitled to be cast for the election of directors.

SECTION 10. VACANCIES

The stockholders may elect a successor to fill a vacancy on
the Board of Directors which results from the removal of a director. A vacancy
occurring on the Board of Directors other than by reason of an increase in the
number of directors may be filled by the affirmative vote of a majority of the
remaining directors, although less than a quorum. Any directorship to be
filled by reason of an increase in the number of directors may be filled by a
majority of the entire Board of Directors. A director elected by the Board of
Directors to fill a vacancy shall serve until the next annual meeting of
stockholders and until his successor is elected and qualifies. A director
elected by the stockholders to fill a vacancy which results from the removal of
a director shall serve for the balance of the term of the removed director.

SECTION 11. PRESUMPTION OF ASSENT

A director of the Corporation who is present at a meeting of
the Board of Directors at which action on any corporate matter is taken shall
be assumed to have assented to the action unless he announces his dissent at
the meeting and (a) his dissent is entered in the minutes of the meeting, (b)
he files his written dissent to the action with the secretary of the meeting
before the adjournment thereof, or (c) he forwards his written dissent, by
certified mail, return receipt requested, bearing a postmark from the United
States Postal Service, to the secretary of the meeting or the Secretary of the
Corporation within 24 hours after the meeting is adjourned. The right to
dissent shall not apply to a director who voted in favor of the action or
failed to make his dissent known at the meeting.

SECTION 12. COMPENSATION OF DIRECTORS

The directors may be paid their expenses of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be paid like compensation for attending committee meetings.

-6-
<PAGE> 7
ARTICLE IV. COMMITTEES

SECTION 1. APPOINTMENT

The Board of Directors may appoint from among its members an
Executive Committee and other committees composed of two or more directors for
those purposes and with powers as the Board may determine, subject to Section 2
of this Article IV. The members of any committee present at any meeting of the
committee, whether or not they constitute a quorum, may appoint another
director to act in the place of an absent member of the committee. The Board
of Directors shall by majority vote appoint a chairman of each committee. The
appointment of any committee pursuant to this Article IV, the delegation of
authority thereto, or any action by a committee pursuant to this Article IV
shall not constitute, of itself, compliance by any director, not a member of
the committee, with the standard of care established by law for the performance
of duties of directors.

SECTION 2. EXECUTIVE COMMITTEE; AUTHORITY

The Board of Directors may, by resolution adopted by a
majority of the directors present at any meeting, establish an Executive
Committee to consist of two or more directors. When the Board of Directors is
not in session, the Executive Committee shall have and may exercise all of the
powers of the Board of Directors, except to the extent, if any, that the
authority shall be limited by resolution of the entire Board of Directors;
provided, however, that neither the Executive Committee nor any other committee
shall have the power to amend the Bylaws of the Corporation, to declare
dividends or distributions on stock, to issue stock (except as permitted by law
pursuant to a duly authorized stock option or similar plan), to recommend to
the stockholders any action which requires stockholder approval, or to approve
any merger or share exchange which does not require stockholder approval.

SECTION 3. TENURE

Subject to the provisions of Section 8 of this Article IV,
each member of the Executive Committee or any other committee shall hold office
until the next regular annual meeting of the Board of Directors following his
appointment and until his successor is designated by the Board of Directors.

SECTION 4. MEETINGS AND NOTICES

Regular meetings of committees of the Board of Directors may
be held without notice at times and places as the committees may determine from
time to time by resolution. Special meetings of committees may be called by
any member thereof upon not less than one day's notice stating the place, date,
and hour of the meeting, which notice may be written or by telephone or
telegram. The notice of a meeting of a committee need not state the business
proposed to be transacted at the

-7-
<PAGE> 8
meeting. Any member of a committee may waive notice of any meeting thereof,
either before or after the meeting, by signing a waiver of notice which shall
be filed with the records of the meeting, or by attendance at the meeting.

SECTION 5. QUORUM

Except as provided otherwise in Section 1 of this Article IV,
a majority of the members of a committee shall constitute a quorum for the
transaction of business at any meeting thereof. The vote of a majority of the
members of a committee present at a meeting at which a quorum is present shall
constitute action of the committee.

SECTION 6. ACTION WITHOUT A MEETING; TELEPHONE MEETINGS

Any action required or permitted to be taken at a meeting of a
committee may be taken without a meeting if a written consent, setting forth
the action so taken, is signed by all of the members of the committee and filed
with the minutes of proceedings of the committee. Members of committees may
participate in meetings by means of a conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other at the same time. The participation shall constitute presence
in person at the meeting.

SECTION 7. VACANCIES

Any vacancy on a committee may be filled by a resolution
adopted by a majority of the Board of Directors.

SECTION 8. REMOVAL AND RESIGNATIONS

Any member of a committee may be removed at any time, with or
without cause, by resolution of the Board of Directors. Any member of a
committee may resign from the committee at any time by giving written notice to
the President or Secretary of the Corporation otherwise specified therein, the
resignation shall take effect upon receipt thereof.

SECTION 9. PROCEDURE

All committees established by the Board of Directors shall
keep correct and complete minutes of their proceedings which minutes shall be
recorded in written form but may be maintained in the form of a reproduction,
and the Chairman of each committee shall report any actions taken to the Board
of Directors at the next meeting thereof held after the committee meeting. The
minutes of committee meetings shall be distributed to all members of the Board
of Directors.

-8-
<PAGE> 9
ARTICLE V. OFFICERS

SECTION 1. POSITIONS

The officers of the Corporation shall be the President, the
Secretary, and the Treasurer, and other officers as the Board of Directors may
appoint, including a Chairman of the Board, and one or more Vice Presidents,
who shall exercise the powers and perform the duties as are provided in these
Bylaws and as may be determined from time to time by resolution of the Board of
Directors. Any two or more offices may be held by the same person, except that
(a) one person may not serve concurrently as both President and Vice President,
and (b) any person who holds more than one office may not act in more than one
capacity to execute, acknowledge, or verify any instrument required by law to
be executed, acknowledged or verified by more than one officer.

SECTION 2. PRESIDENT

The President shall be the chief executive officer of the
Corporation, shall have general and active supervision over the business and
affairs of the Corporation, shall insure that all lawful orders and resolutions
of the Board of Directors are carried into effect, and, unless otherwise
provided by the Board of Directors, shall preside at all meetings of the Board
of Directors and of the stockholders. The President shall execute bonds,
mortgages, and other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed, and except where the execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent of the
Corporation.

SECTION 3. VICE PRESIDENT

In the absence of the President or in the event of the
President's inability or refusal to act, the Vice President (or in the event
there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting shall
have all the powers of, and be subject to all the restrictions upon, the
President. The Vice President shall perform other duties and have other powers
as the Board of Directors may from time to time prescribe.

SECTION 4. CHAIRMAN OF THE BOARD

If the directors shall appoint a Chairman of the Board, the
Chairman shall, when present, preside at all meetings of the Board of Directors
and shall perform other duties and have other powers as may be vested in the
Chairman by the Board of Directors.

-9-
<PAGE> 10
SECTION 5. SECRETARY

The Secretary shall attend all meetings of the stockholders
and the Board of Directors, shall record or cause to be recorded all the
proceedings of the meetings of the stockholders and of the Board of Directors
in a book or books to be kept for that purpose, and shall perform like duties
for the Executive Committee or other committees, when required. The Secretary
shall give, or cause to be given, notices as are required to be given in
accordance with the provisions of these Bylaws or as required by law or the
Articles of Incorporation of the Corporation. The Secretary shall have custody
of the seal of the Corporation, and shall have the authority to affix the same
to any instrument or document the execution of which in the name or on behalf
of the Corporation is duly authorized, and when so affixed it may be attested
by the signature of the Secretary. The Secretary shall see that the books,
records, and other documents required by law (including the stock ledger and
the records of the issue, transfer and registration of certificates for shares
of Common Stock) are properly kept and filed. The Secretary shall perform all
other duties incident to the office of Secretary and other duties as from time
to time may be prescribed by these Bylaws or may be assigned to him or her by
the Board of Directors or the President.

SECTION 6. ASSISTANT SECRETARY

The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Board of Directors (or if
there shall have been no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of the
Secretary's inability or refusal to act, perform the duties and have other
powers as the Board of Directors may from time to time prescribe.

SECTION 7. TREASURER

The Treasurer shall have the custody of the corporate funds
and securities, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation, and shall deposit all
monies and valuable effects in the name and to the credit of the Corporation in
depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as directed by the Board of
Directors, taking proper vouchers for the disbursements, and shall render to
the President, and to the Board of Directors at its regular meetings, or when
the Board of Directors so requires, an account as to all transactions as
Treasurer and of the financial condition of the Corporation. The Treasurer
shall also perform all other duties incident to the office of Treasurer and
other duties as from time to time may be assigned to him or her by the Board of
Directors or the President, or as may be prescribed by these Bylaws. If
required by the Board of Directors, the Treasurer shall give the Corporation a
bond and with surety or sureties as shall be satisfactory to the Board of
Directors for the faithful

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<PAGE> 11
performance of the duties of the Treasurer's office and for the restoration to
the Corporation, in case of the Treasurer's death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property
of whatever kind, in the Treasurer's possession or under the Treasurer's
control and belonging to the Corporation.

SECTION 8. ASSISTANT TREASURER

The Assistant Treasurer, or if there shall be more than one,
the Assistant Treasurers in the order determined by the Board of Directors (or
if there shall have been no such determination, then in the order of their
election), shall, in the absence of the Treasurer or in the event of the
Treasurer's inability or refusal to act, perform the duties and exercise the
powers of the Treasurer, and shall perform other duties and have other powers
as the Board of Directors may from time to time prescribe.

SECTION 9. ELECTION AND TERM OF OFFICE

The officers of the Corporation shall be elected at the
regular annual meeting of the Board of Directors, or as soon thereafter as
possible, to hold office until the next regular annual meeting of the Board and
until their respective successors are elected and qualified, or until their
earlier death, resignation, or removal.

SECTION 10. COMPENSATION

The compensation of all officers of the Corporation shall be
fixed from time to time by the Board of Directors.

SECTION 11. RESIGNATION AND REMOVAL

Any officer may at any time resign in the same manner provided
for directors in Section 9 of Article III of these Bylaws. Any officer may be
removed by the Board of Directors whenever, in its judgment, the best interests
of the Corporation will be served thereby, but the removal shall be without
prejudice to the contract rights, if any, of the person so removed.

SECTION 12. VACANCIES

A vacancy in any office because of death, resignation,
removal, disqualification, or otherwise may be filled by the Board of Directors
for the unexpired portion of the term of the office and until a successor is
elected and qualifies.

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<PAGE> 12
SECTION 13. FIDELITY BONDS

The Corporation may secure the fidelity of any or all of its
officers or agents by bond or otherwise.

ARTICLE VI. INDEMNIFICATION

To the maximum extent permitted by Maryland law in effect from
time to time, the Company, without requiring a preliminary determination of the
ultimate entitlement to indemnification, shall indemnify (a) any Director or
officer or any former Director or officer (including among the foregoing, for
all purposes of this Article VI and without limitation, any individual who,
while a Director and at the request of the Company, serves or has served
another corporation, partnership, joint venture, Company, employee benefit plan
or any other enterprise as a director, officer, partner or Director of such
corporation, partnership, joint venture, Company, employee benefit plan or
other enterprise), who has been successful, on the merits or otherwise, in the
defense of a proceeding to which he was made a party by reason of such status,
against reasonable expenses incurred by him in connection with the proceeding,
and (b) any Director or officer or any former Director or officer against any
claim or liability to which he may become subject by reason of such status
unless it is established that (i) his act or omission was committed in bad
faith or was the result of active and deliberate dishonesty, (ii) he actually
received an improper personal benefit in money, property or services or (iii)
in the case of a criminal proceeding, he had reasonable cause to believe that
his act or omission was unlawful. In addition, the Company shall pay or
reimburse, in advance of final disposition of a proceeding, reasonable expenses
incurred by a Director or officer or former Director or officer made a party
to a proceeding by reason of his status as a Director or officer; provided,
that the Company shall have received (i) a written affirmation by the Director
or officer of his good faith belief that he has met the applicable standard of
conduct necessary for indemnification by the Company as authorized by these
Bylaws and (ii) a written undertaking by or on his behalf to repay the amount
paid or reimbursed by the Company if it shall ultimately be determined that the
applicable standard of conduct was not met. The Company may, with the approval
of its Directors, provide such indemnification and payment or reimbursement of
expenses to any employee or agent of the Company. Neither the amendment nor
repeal of this Article VI, nor the adoption or amendment of any other
provision of the Articles of Incorporation or these Bylaws inconsistent with
this Article VI, shall apply to or affect in any respect the applicability of
this paragraph with respect to any act or failure to act which occurred prior to
such amendment, repeal or adoption. Any indemnification or payment or
reimbursement

-12-
<PAGE> 13
of the expenses permitted by these Bylaws shall be furnished in accordance with
the procedures provided for indemnification and payment or reimbursement of
expenses under Section 2-418 of the Maryland General Corporation Law (the
"MGCL") for directors of Maryland corporations. The Company may provide to
Directors, officers and stockholders such other and further indemnification or
payment or reimbursement of expenses as may be permitted by the MGCL, as in
effect from time to time, for directors of Maryland corporations.

ARTICLE VII. CAPITAL STOCK

SECTION 1. STOCK CERTIFICATES

Each stockholder is entitled to a certificate which represents
and certifies the shares of Common Stock he holds in the Corporation. A
certificate may not be issued until the stock represented by it is fully paid.
Certificates representing shares of Common Stock of the Corporation shall be
signed by the President, Vice President or the Chairman of the Board, and
countersigned by the Secretary, an Assistant Secretary, the Treasurer, or an
Assistant Treasurer, and sealed with the corporate seal or a facsimile thereof.
The signatures of the officers upon a stock certificate may be either manual or
facsimile. Any stock certificate so signed shall be valid and may be issued
whether or not the officer who signed it is still an officer when it is issued.
Stock certificates shall be consecutively numbered or otherwise identified, and
each certificate shall state on its face the name of the Corporation, the class
of stock and the number of shares it represents, and the name of the
stockholder or other person to whom it is issued. The name and address of each
stockholder, with the number of shares held and the date of issue, shall be
entered on the stock ledger of the Corporation.

SECTION 2. TRANSFER OF SHARES

Transfer of shares of Common Stock of the Corporation shall be
made only on its stock ledger, and only upon surrender for cancellation of the
certificate for the shares, properly endorsed. Authority for the transfer
shall be given only by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of the authority, or by his
attorney thereunto authorized by power of attorney duly executed and filed with
the Corporation. In case of a lost, stolen, or destroyed certificate, a new
certificate may be issued upon those conditions and indemnity to the
Corporation as the Board of Directors in its discretion may prescribe.

SECTION 3. ISSUANCE OF SHARES

The Board of Directors may from time to time authorize the
issuance of additional shares of Common Stock or securities convertible into
Common Stock. Prior to each issuance the Board of Directors shall adopt a
resolution which authorizes the issuance and sets the minimum price or value of
consideration for

-13-
<PAGE> 14
which the shares of stock or convertible securities are to be issued, or a
formula or method pursuant to which the same is to be determined, including a
fair description of any consideration other than money and a statement of the
actual value of the consideration as then determined by the Board of Directors
or a statement that the Board of Directors has determined that the actual value
is or will not be less than a certain sum. In the absence of actual fraud in
the transaction, any valuation so fixed by the Board of Directors shall be
conclusive for all purposes. The actual value of consideration to be received
by the Corporation, as determined by the Board of Directors, upon the issuance
of additional shares of Common Stock shall be not less than the par value
thereof. For the purposes of this Section, the consideration for which Common
Stock is issued as a stock dividend shall be deemed to be the par value
thereof, and, at the time the dividend is paid, the Corporation shall transfer
from surplus to stated capital an amount at least equal to the aggregate par
value of the shares to be issued. Unless otherwise required by law, no vote of
the stockholders of the Corporation shall be required for the issuance of
additional shares of Common Stock or securities convertible into Common Stock.

SECTION 4. BOOKS AND RECORDS; STOCK LEDGERS

The Corporation shall keep correct and complete books and
records of its accounts and transactions and minutes of the proceedings of its
stockholders and Board of Directors and of any executive or other committee
when exercising any of the powers of the Board of Directors. The Corporation
shall maintain a stock ledger, containing the names and addresses of the
stockholders of the Corporation and the number of shares of stock of each class
held by each stockholder, which shall be kept at the principal office of the
Corporation, or at another place as the Board of Directors may determine.

SECTION 5. DIVIDENDS

The Board of Directors may declare dividends on the stock of
the Corporation, which may be paid in cash, property, or the Corporation's
stock in accordance with applicable law. No dividends may be declared or paid
if the Corporation is insolvent or the payment would cause the Corporation to
become insolvent, or if the Corporation's stated capital is impaired or the
payment would impair its stated capital. If a dividend is paid from any source
other than earned surplus, the source of the dividend shall be disclosed to the
stockholders receiving the dividend not later than the time of payment.

SECTION 6. REGISTERED STOCKHOLDERS

The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, to receive notifications, to vote as the owner, and to exercise the
rights and powers of an owner. The Corporation shall not be bound to recognize
any equitable or other claim to or interest in the share or shares on the part
of any other person, whether

-14-
<PAGE> 15
or not it shall have express or other notice thereof, except as expressly
provided by the laws of the State of Maryland.

ARTICLE VIII. MISCELLANEOUS PROVISIONS

SECTION 1. FISCAL YEAR

The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.

SECTION 2. FINANCIAL STATEMENTS

The President, Treasurer, or any other officer as may be
designated by the Board of Directors of the Corporation, shall prepare or cause
to be prepared annually a full and correct statement of the affairs of the
Corporation, including a balance sheet and a financial statement of operations
for the preceding fiscal year, which shall be submitted at the annual meeting
of stockholders of the Corporation and filed within 20 days thereafter at the
principal office of the Corporation.

SECTION 3. SEAL

The corporate seal of the Corporation shall have inscribed
thereon the name of the Corporation, the year of its organization, and the
words "Corporate Seal" and "Maryland," and shall be in the form as shall be
approved from time to time by the Board of Directors. The seal may be used by
causing it, or a facsimile thereof, to be impressed, affixed, or otherwise
reproduced.

SECTION 4. AMENDMENTS

These Bylaws may be amended or repealed by either the
affirmative vote of a majority of all shares outstanding and entitled to vote
generally in the election of Directors, voting as a single group, or by an
affirmative vote of a majority of the Board of Directors, unless the
stockholders prescribe that any such Bylaw may not be amended or repealed by
the Board of Directors.

* * * * *

-15-

<PAGE> 1

EXHIBIT 4.01

<TABLE>
<S> <C> <C>
NUMBER SHARES

STRAYER EDUCATION, INC.
INCORPORATED UNDER THE LAWS OF MARYLAND

COMMON STOCK CUSIP
(Par Value $.01 Per Share) SEE REVERSE FOR CERTAIN DEFINITIONS
-----------------------------------------------------------------------------------------------------------

THIS CERTIFIES THAT

is the registered holder of

-----------------------------------------------------------------------------------------------------------
</TABLE>

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01 PER
SHARE, OF STRAYER EDUCATION, INC.

Transferable on the books of the Corporation by the holder hereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed.

This Certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.

WITNESS, the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

GLENDA HARDISON RON K. BAILEY
Secretary President and Chief Executive Officer

Countersigned and Registered:
American Stock Transfer & Trust Corp.
Tranfer Agent
and Registrar

Authorized Signature

<PAGE> 2

The corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative, participating, optional, or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right
of survivorship and not as
tenants in common

UNIF GIFT MIN ACT - _______________Custodian_______________
(Cust) (Minor)
under Uniform Gifts to Minors

Act___________________________________
(State)

Additional abbreviations may also be used though not in the above list.

For Value Received, ____________________________________hereby sell, assign
and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
( )
( )
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE)

- -------------------------------------------------------------------------------

Shares
- -------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

- -------------------------------------------------------------------------------

Attorney
- -----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated
-------------------------------------------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular, without alteration
or enlargement or any change whatever.

<PAGE> 1
Exhibit 5.01

[HOGAN & HARTSON L.L.P. LETTERHEAD]

July 15, 1996

Board of Directors
Strayer Education, Inc.
1025 15th Street, N.W.
Washington, D.C. 20005

Ladies and Gentlemen:

We are acting as special counsel to Strayer Education, Inc., a Maryland
corporation (the "COMPANY"), in connection with its registration statement on
Form S-1, as amended (the "REGISTRATION STATEMENT") filed with the Securities
and Exchange Commission relating to the proposed public offering of up to
3,450,000 shares of the Company's common stock, par value $.01 per share, all
of which shares (the "SHARES") are to be sold by the Company. This opinion
letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section
229.601(b)(5), in connection with the Registration Statement.

For purposes of this opinion letter, we have examined copies of the
following documents:

1. An executed copy of the Registration Statement.

2. The Articles of Incorporation of the Company, as certified by
the Secretary of the Company on the date hereof as then
being complete, accurate and in effect.

3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as then being complete,
accurate and in effect.
<PAGE> 2
HOGAN & HARTSON L.L.P.

4. The proposed form of Underwriting Agreement among the Company
and the several Underwriters to be named therein, for
whom Legg Mason Wood Walker Incorporated will act as
representative, filed as Exhibit 1.01 to the Registration
Statement (the "UNDERWRITING AGREEMENT").

5. Resolutions of the Sole Director of the Company adopted on May
10, 1996, as certified by the Secretary of the Company
on the date hereof as then being complete, accurate and in
effect, relating to the issuance and sale of the Shares and
arrangements in connection therewith.

In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, and
the conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic, or reproduced copies. This opinion letter
is given, and all statements herein are made, in the context of the foregoing.

This opinion letter is based as to matters of law solely on the General
Corporation Law of the State of Maryland. We express no opinion herein as to
any other laws, statutes, regulations, or ordinances.

Based upon, subject to and limited by the foregoing, we are of the
opinion that following (i) final action of the Sole Director of the Company
approving the price of the Shares, (ii) execution and delivery by the Company
of the Underwriting Agreement, (iii) effectiveness of the Registration
Statement, (iv) issuance of the Shares pursuant to the terms of the
Underwriting Agreement and (v) receipt by the Company of the consideration for
the Shares specified in the resolutions of the Sole Director referred to above,
the Shares will be validly issued, fully paid and nonassessable under the
General Corporation Law of the State of Maryland.

We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has
been prepared solely for your use in connection with the filing of the
Registration Statement on the date of this opinion letter and should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.

<PAGE> 3
HOGAN & HARTSON L.L.P.

We hereby consent to the filing of this opinion letter as Exhibit 5.01
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that
we are an "expert" within the meaning of the Securities Act of 1933, as
amended.

Very truly yours,

/s/ HOGAN & HARTSON L.L.P.
--------------------------
HOGAN & HARTSON L.L.P.

<PAGE> 1
Exhibit 10.06

AGREEMENT OF LEASE
FOR
OFFICE CONDOMINIUM SPACE

TABLE OF CONTENTS

ARTICLE PAGE

1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. WORK AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . . 8
6. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. CARE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . 10
8. ALTERATIONS BY TENANT . . . . . . . . . . . . . . . . . . . . . 10
9. EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. OWNERSHIP AND REMOVAL OF PROPERTY . . . . . . . . . . . . . . . 13
11. ACCESS TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . 13
12. SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . . . . . 14
13. INFECTIOUS WASTE . . . . . . . . . . . . . . . . . . . . . . . . 15
14. REPAIR OF DAMAGE CAUSED BY TENANT: INDEMNIFICATION . . . . . . . 15
15. LIMITATION ON LANDLORD LIABILITY . . . . . . . . . . . . . . . . 16
16. FIRE AND OTHER CASUALTY . . . . . . . . . . . . . . . . . . . . 17
17. TENANT INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 18
18. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . 20
19. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
20. NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
21. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . 25

April 15, 1991
<PAGE> 2
OFFICE CONDOMINIUM LEASE

THIS LEASE AGREEMENT ("Lease") is made and entered into this 22nd day of
April, 1991 by and between CROSS CREEK ASSOCIATES LIMITED PARTNERSHIP, a
Virginia limited partnership ("Landlord"), and STRAYER COLLEGE, a Maryland
corporation ("Tenant").

In consideration of the Rent hereinafter reserved and the agreements
hereinafter set forth, Landlord and Tenant mutually agree as follows:

1. DEFINITIONS.

Except as otherwise expressly provided or unless the context otherwise
requires, the following terms shall have the meanings assigned to them in this
Section:

A. Alterations: Any improvements, alterations, fixed decorations or
modifications, structural or otherwise, to the Premises or any portion of the
Condominium, including but not limited to the installation or modification of
carpeting, partitions, counters, doors, air conditioning ducts, plumbing,
piping, lighting fixtures, wiring, hardware, locks, ceilings and window and
wall coverings.

B. Association: The unit owners association of the Condominium.

C. Building: The Building in which the Premises are located, which
Building is located at 45150 Russell Branch Parkway in Loudoun County,
Virginia.

D. Condominium: Cross Creek Office Condominium, located on Russell
Branch Parkway, in Ashburn, Virginia 22011, as established by the Condominium
Instruments.

E. Condominium Assessment: All assessments, including, without
limitation, special assessments, against the Premises due and payable to the
Association during the course of a Fiscal Year for payment of any expenses
incurred by the Association pursuant to the Condominium Instruments.
Condominium Assessments shall not include (i) interest or penalties arising
by reason of Landlord's failure to pay any Condominium Assessments or (ii)
assessments levied against the Premises pursuant to the Association's power to
assess expenses benefitting less than all the units against specific units if
(a) such expenses are due to the request of the Landlord and are incurred
despite the Tenant's objection or (b) such expenses are the result of the
willful misconduct or gross negligence of the Landlord, its agents or
employees. The

April 15, 1991 1
<PAGE> 3

Condominium Assessment shall not include any costs associated with or included
in Management and Operating Expenses.

F. Common Expenses: The amount by which the Condominium Assessment and
the Management and Operating Expenses for each Fiscal Year exceed Twenty Nine
Thousand Forty Dollars ($29,040) per Fiscal Year.

G. Condominium Instruments: The Declaration for Cross Creek Office
Condominium, and exhibits attached thereto, recorded on July 19, 1990 in Deed
Book 1094, at page 553, among the land records of Loudoun County, Virginia, as
amended from time to time, including the Rules and Regulations of Cross Creek
Office Condominium as the same may be amended from time to time. A copy of
the Condominium Instruments has previously been provided to
Tenant.

H. Consumer Price Index (Regular and Base): The revised
monthly Consumer Price Index for Wage Earners and Clerical Workers
for the Metropolitan Washington, D.C. Area (All items, 1982-1984 = 100)
promulgated by the Bureau of Labor Statistics of the United
States Department of Labor. If said Index is discontinued, the Consumer Price
Index shall be the successor index adopted by the Bureau of Labor Statistics
or, if none, any similar index adopted by Landlord. The "Base Consumer Price
Index" shall be the Consumer Price Index most recently published prior to the
Lease Commencement Date.

I. Declarant: The Declarant of the Condominium as defined in the
Condominium Instruments.

J. Default Rate: That rate of interest which is three (3) percentage
points above the base or prime rate of interest announced from time to time by
Citibank, N.A. of New York, New York. In the event that Citibank, N.A. ceases
to announce a base rate of interest, Landlord, at Landlord's reasonable
discretion, shall designate the base or prime rate of interest announced by
another bank located in the Washington, D.C. metropolitan area, which shall be
the base or prime rate of interest used to calculate the Default Rate.

K. Effective Date: The rights and obligations set forth in this Lease,
except for the obligation to pay Rent and as otherwise specifically provided
herein to the contrary, shall become effective on the date of the final
execution of this Lease.

L. Fiscal Year: Each consecutive twelve (12) month period or portion
thereof during the Term of this Lease that falls between January 1 and
December 31, inclusive.

M. Ground Leases: All ground and other underlying leases from which
Landlord's title to the Land and/or the Building is or

April 15, 1991 2
<PAGE> 4
may in the future be derived. "Ground Lessors" shall denote those persons and
entities holding such ground or underlying leases.

N. Land: The real estate that supports the Building, and all associated
easements.

0. Landlord's Work: All work to be performed by Landlord under the Work
Agreement.

P. Lease Commencement Date: The date this Lease commences, as
determined pursuant to Subsection 2A below.

Q. Lease Year: That period of twelve (12) consecutive calendar months
that commences on the first day of the calendar month in which the Lease
Commencement Date occurs, and each consecutive twelve (12) month period, or
portion thereof, thereafter. The earliest such twelve (12) month period shall
be referred to as the "first Lease Year," and each of the following Lease
Years shall similarly be numbered for identification purposes.

R. Management and Operating Expenses: All costs and expenses incurred
by Landlord each Fiscal Year in connection with ownership and operation of the
Premises, including, without limitation: (a) wages, salaries and other labor
costs, including taxes, insurance, retirement, medical and other employee
benefits; (b) rent loss and such other insurance as Landlord may elect to
carry; (c) fees, charges, and other costs, including management fees,
consulting fees, legal fees, accounting fees and fees of all independent
contractors engaged by Landlord or reasonably charged by Landlord if Landlord
performs management services in connection with the Premises; and (d) any
other expenses of any kind whatsoever reasonably incurred by Landlord in
managing, operating, maintaining and repairing the Premises. If these amounts
are not separately charged against the Premises, then the term "Management and
Operating Expenses" shall mean and refer to Tenant's Share (as defined below)
of the Management and Operating Expenses for all condominium units,
convertible space or convertible land in the Building for which Landlord is
incurring such costs and expenses. Tenant's Share shall be determined by
dividing the net rentable square feet of the Premises by the net rentable
square feet of all condominium units, convertible space or convertible land in
the Building for which Landlord is incurring the costs and expenses described
in this Subsection. Management and Operating Expenses shall not include: (i)
Real Estate Taxes, (ii) payments of principal and interest on any mortgages
and any other costs associated with any mortgages, (iii) costs of preparing,
improving or altering any space in preparation for occupancy of any new or
renewal tenant, (iv) expenses for which Landlord is reimbursed or indemnified
(either by an insurer, condemnor, tenant, warrantor or otherwise) to the
extent of funds received by Landlord, (v) expenses incurred in leasing or
procuring tenants (including lease commissions, advertising expenses and
expenses of renovating space

April 15, 1991 3
<PAGE> 5
for tenants), (vi) costs representing an amount paid to an affiliate of
Landlord which is in excess of the amount which would have been paid in the
absence of such relationship, (vii) amounts paid to any partner, shareholder,
officer, director or executive of Landlord for salary or other compensation,
(viii) costs of services furnished to other tenants in the Building but not
made available to Tenant, (ix) costs or expenses relating to any Ground Lease,
(x) costs or expenses incurred in connection with a transfer of any interest
in Landlord or the Condominium, or (xi) attorneys' fees relating to any
leasing or sale of the Building, financing of the Building or enforcement of
any lease in the Building except as otherwise provided herein with respect to
defaults by Tenant under this Lease. There shall be no duplication of costs
or reimbursement. It is understood that other buildings may be developed in
the Condominium and such other buildings may share facilities and services
with the Building. Management and Operating Costs shall include that portion
of all costs, expenses and disbursements relating to such shared facilities
and services which is allocated to the Building by Landlord. Management and
Operating Expenses shall not include any costs associated with or included in
the Condominium Assessment.

S. Mortgages: All mortgages, deeds of trust and similar security
instruments which may now or in the future encumber or otherwise affect the
Premises (regardless of whether such instrument affects other real property),
including mortgages related to both construction and permanent financing.
"Mortgagees" shall denote those persons and entities holding such mortgages,
deeds of trust and similar security instruments.

T. Premises: Condominium Unit Nos. 200, 201, 202, 203, 204 and 205
located in the Condominium, consisting of 12,000 square feet of rentable area,
as shown on the floor plan attached hereto as Exhibit A.

U. Premises' Standard Electrical Capacity: The electrical capacity
sufficient to support Tenant's balanced consumption of two and one half (2.5)
watts per square foot of rentable area. Landlord hereby acknowledges that
Tenant's electrical requirements as depicted on Exhibit A-2 do not exceed the
Premises' Standard Electrical Capacity.

V. Real Estate Taxes: All real estate taxes and assessments, general or
special, ordinary or extraordinary, foreseen or unforeseen, that are assessed,
levied or imposed upon the Premises (regardless of whether such tax or
assessment affects other real property) under any current or future taxation
or assessment system or modification of, supplement to, or substitute for such
system, whether or not based on or measured by the receipts or revenues from
the Premises, including, without limitation, all taxes and assessments for
public improvements or any other purpose, any gross receipts or similar taxes,
any sales taxes, use taxes, business

April 15, 1991 4
<PAGE> 6
taxes and license fees imposed upon the Landlord as owner of the Premises
(regardless of whether the same affects other real property) or upon the rents
payable hereunder, and all reasonable expenses incurred by Landlord in
obtaining or attempting to obtain a reduction of any taxes, rates or
assessments described above, including but not limited to legal fees. Real
Estate Taxes shall not include: (i) any taxes on Tenant's Personal Property or
other tenants' personal property, which taxes are the sole obligation of each
tenant, (ii) franchise, corporation, income or net profits tax, unless
substituted for real estate taxes or imposed as additional charges in
connection with the ownership of the Premises, which may be assessed against
Landlord or the Premises or both, (iii) transfer taxes assessed against
Landlord or the Premises, or both, and (iv) penalties or interest on any late
payments of Landlord. If the Premises are not separately assessed from the
rest of the Condominium, then the Real Estate Taxes shall mean and refer to
34.37734 percent of the Real Estate Taxes for Phase One of the Condominium (as
described in the Condominium Instruments) for each Fiscal Year.

W. Tax Expenses: The amount by which the Real Estate Taxes for each
Fiscal Year exceed Eleven Thousand One Hundred Sixty Dollars ($11,160) per
Fiscal Year.

X. Rent: All Base Rent and Additional Rent.

(1) Base Rent: The amount payable by Tenant pursuant to Subsection
4A below.

(2) Additional Rent: All sums of money payable by Tenant pursuant
to this Lease other than Base Rent.

(3) Monthly Rent: A monthly installment of Base Rent and Additional
Rent, if any, which shall equal one-twelfth (1/12th) of Base
Rent and Additional Rent then in effect.

Y. Tenant's Personal Property: All equipment, improvements, furnishings
and/or other property now or hereafter installed or placed in or on the
Premises by and at the sole expense of Tenant or with Tenant's permission
(other than any property of Landlord), with respect to which Tenant has not
been granted any credit or allowance by Landlord, and which: (i) is removable
without damage to the Premises or the Condominium, the Building, and (ii) is
not a replacement of any property of Landlord, whether such replacement is
made at Tenant's expense or otherwise. Notwithstanding any other provision of
this Lease, Tenant's Personal Property shall not include any improvements or
other property installed or placed in or on the Premises as part of Landlord's
Work, whether or not any such property was purchased or installed at Tenant's
expense.

Z. Unavoidable Delay: Any delays due to strikes, labor disputes,
shortages of material, labor or energy, acts of God,

April 15, 1991 5
<PAGE> 7
governmental restrictions, enemy action, civil commotion, fire, unavoidable
casualty or any other causes beyond the control of Landlord.

AA. Virginia Condominium Act: Chapter 4.2 of Title 55 of the Code of
Virginia, as amended. Terms regarding the condominium form of ownership which
are used herein but not defined shall have the meanings set forth in the
Virginia Condominium Act.

BB. Work Agreement: Exhibit C, which terms are hereby expressly
incorporated into this Lease.

2. TERM.

A. Term of Lease: The term of this Lease ("Term") shall commence on a
date ("Lease Commencement Date"), as defined below, and shall terminate on the
date which is five (5) full years after the Lease Commencement Date, or such
earlier date on which this Lease is terminated pursuant to the provisions
hereof ("Lease Expiration Date"). The Lease Commencement Date shall be the
earliest of (i) the date Tenant commences occupancy of any part of the
Premises or (ii) that date which is five (5) days after Landlord notifies
Tenant that Landlord's Work is "substantially complete," as defined in Section
6 of the Work Agreement, or (iii) one hundred twenty (120) days after receipt
by Landlord of a Building permit from the local governing authority
authorizing Landlord to commence Landlord's Work, the application of which
shall be subject to receiving a special exception from the local governing
authority for the use of the Premises for a college, but in no event more than
one hundred eighty (180) days from receipt of a building permit as aforesaid,
subject to Unavoidable Delays. In the event Landlord's Work is not completed
within one hundred eighty (180) days as aforesaid and subject to the
conditions stated hereinbefore for reasons not due to an Unavoidable Delay,
Tenant may terminate this Lease by providing Landlord with written notice no
later than the one hundred eighty-first (181st) day. Notwithstanding the
foregoing, Landlord shall use best efforts to give Tenant thirty (30) days
prior written notice of the date on which the Premises will be substantially
complete. Landlord hereby leases and demises the Premises to Tenant and
Tenant hereby leases the Premises from Landlord for the Term, subject to the
terms and conditions of this Lease.

B. Declarations: If requested by Landlord at any time during the Term,
Tenant promptly will execute a declaration in the form attached hereto as
Exhibit B.

3. WORK AGREEMENT.

Landlord agrees to improve the Premises in accordance with the Work
Agreement, but shall have no other obligation to make any improvements or
alterations to the Premises.

April 15, 1991 6
<PAGE> 8
4. RENT

From and after the Lease Commencement Date and throughout the entire
Term of this Lease, Tenant shall pay to Landlord such Base Rent and Additional
Rent as are set forth in this Section 4 and in Section 5 below.

A. Base Rent: Base Rent shall equal One Hundred Ninety-Five Thousand
Dollars ($195,000) per annum. Tenant shall pay Base Rent to Landlord in equal
monthly installments of Sixteen Thousand Two Hundred Fifty Dollars ($16,250)
("Monthly Base Rent") in advance on the first day of each calendar month
during the Term, without notice, except that the first monthly installment of
Base Rent shall be paid upon execution of this Lease, and shall accrue
interest to the benefit of Tenant at the standard money market rate then in
effect until the expiration of the abatement period as defined in Section 1
of the Rider attached hereto and made a part hereof. If the Lease
Commencement Date occurs on a date other than the first day of a calendar
month, Tenant shall receive a credit equal to the Monthly Base Rent multiplied
by the number of days in said calendar month prior to the Lease Commencement
Date and divided by the number of days in such month, which credit shall be
applied toward the installment of Monthly Base Rent next due hereunder.

B. Payment: All Base Rent and Additional Rent due and payable to
Landlord under this Lease shall be made payable to JBG Properties, Inc. and
delivered in care of JBG Properties, Inc., at the address set forth in Section
31. Payments of Rent, if initially dishonored, shall not be considered
rendered until ultimately honored as cash by Landlord's depository. Except as
expressly set forth otherwise in this Lease, Tenant will pay all Rent to
Landlord without demand, deduction, set-off or counterclaim.

C. Late Fee: If Tenant fails to make any payment of Rent when due and
such failure shall continue for five (5) days after written notice from
Landlord, then Tenant also shall pay to Landlord a late fee equal to five
percent (5%) of the amount that is past due for each month or part thereof
until such Rent is fully paid. Said late fee shall be deemed reimbursement to
Landlord for its costs of carrying and processing Tenant's delinquent account.
Acceptance by Landlord of said late fee shall not waive or release any other
rights or remedies to which Landlord may be entitled on account of such late
payment.

D. Arbitration: Any statement provided to Tenant by Landlord pursuant
to Section 5 below shall be conclusive and binding upon Tenant unless, within
thirty (30) days after receipt thereof, Tenant notifies Landlord of the
respects in which the statement is claimed to be incorrect. Unless otherwise
mutually agreed, any such dispute shall be determined by arbitration in the

April 15, 1991 7
<PAGE> 9
jurisdiction in which the Premises are located, in accordance with the then
current commercial rules of the American Arbitration Association. The costs
of the arbitration shall be paid as follows: (i) if the arbitration results in
a determination that Landlord's statement contained a discrepancy of three
percent (3%) or less in Landlord's favor, then Tenant shall bear all costs
incurred in connection with such arbitration, including, without limitation,
legal fees or (ii) if the arbitration results in a determination that
Landlord's statement contained a discrepancy of greater than three percent
(3%) in Landlord's favor, then Landlord shall bear all costs incurred in
connection with such arbitration, including, without limitation, legal fees.
Pending determination of any dispute, Tenant shall pay all amounts due
pursuant to the disputed statement, but such payments shall be without
prejudice to Tenant's position. Upon at least fifteen (15) days notice to
Landlord, Tenant shall have reasonable access, during normal business hours
and at Tenant's expense, to appropriate books and records of Landlord relating
to the amount of expenses covered by the disputed statement, for the purpose
of verifying the statement.

5. ADDITIONAL RENT.

A. Base Rent Increases: For the second Lease Year and for each Lease
Year or portion thereof thereafter (each such Lease Year being referred to
herein as the "Adjustment Year"), in addition to all other Rent set forth
herein, Tenant shall pay an amount equal to the greater of (i) two percent
(2%) of the Base Rent for the preceding Lease Year as escalated pursuant to
this Section 5A, or (ii) thirty percent (30%) of the product obtained by
multiplying Base Rent by a fraction whose numerator shall be the difference
between the Consumer Price Index most recently published prior to the first
day of the Adjustment Year and the Base Consumer Price Index, and whose
denominator shall be the Base Consumer Price Index.

B. Payment of Common Expenses and Tax Expenses: In addition to all
other Rent set forth herein, for each Fiscal Year or portion thereof during
the Term, Tenant shall pay to Landlord as Additional Rent an amount equal to
the sum of the Common Expenses and Tax Expenses; provided, however, that for
the Fiscal Years during which the Term begins and ends, the annual sum shall
be prorated based upon the greater of: (i) the number of days during such
Fiscal Year that this Lease is in effect, or (ii) the number of days during
such Fiscal Year that Tenant actually occupies the Premises or any portion
thereof.

C. Statements:

(1) Beginning with the second Lease Year and for every Lease Year
and portion thereof thereafter, Landlord shall deliver to Tenant a
statement setting forth the Additional Rent described in Subsection A
above. Said Additional Rent

April 15, 1991 8
<PAGE> 10
shall be payable by Tenant in equal monthly installments in advance on
the first day of each calendar month during the Term ("Monthly Additional
Rent"). Tenant shall pay the Monthly Additional Rent specified in
Landlord's most recent statement until the first payment of Monthly Base
Rent due at least fifteen (15) days after Tenant receives the next such
statement from Landlord, at which time Tenant shall commence making
Monthly Additional Rent payments pursuant to Landlord's new statement.
With the first payment of Monthly Base Rent which is due at least fifteen
(15) days after Tenant's receipt of a statement from Landlord specifying
Additional Rent payable during the Lease Year, Tenant shall pay the
difference between the Monthly Additional Rent so specified for the
preceding months of the Lease Year and the amount which Tenant has
actually paid for said preceding months.

(2) For each Fiscal Year or portion thereof during the Term,
Landlord shall deliver to Tenant a statement estimating the Common
Expenses and Tax Expenses for such Fiscal Year, which Tenant shall pay in
equal monthly installments in advance on the first day of each calendar
month during each Fiscal Year. Tenant shall continue to pay such
estimated Common Expenses and Tax Expenses until Tenant receives the next
such statement from Landlord, at which time Tenant shall commence making
monthly payments pursuant to Landlord's new statement. With the first
payment of such Additional Rent herein which is due at least fifteen (15)
days after Tenant's receipt of a statement from Landlord specifying the
Common Expenses and Tax Expenses payable during the Fiscal Year, Tenant
shall pay the difference between its monthly share of such sums for the
preceding months of the Fiscal Year and the monthly installments which
Tenant has actually paid for said preceding months.

D. Retroactive Adjustments: Within one hundred twenty (120) days after
the end of each Fiscal Year, Landlord shall determine the actual Common
Expenses and Tax Expenses for such Fiscal Year and shall provide to Tenant a
statement of the Common Expenses and Tax Expenses for the Fiscal Year. Within
thirty (30) days after delivery of any such statement, Tenant shall pay to
Landlord any deficiency between the amount shown as actual Common Expenses and
Tax Expenses for the Fiscal Year and the estimated payments made by Tenant.
Tenant shall be credited with any excess estimated payments toward subsequent
Rent payments by Tenant, except that if the Term has expired, then so long as
Tenant is not in default hereunder, the excess estimated payments shall be
refunded to Tenant within thirty (30) days after Landlord delivers such
statement to Tenant. The provisions of this Subsection D shall survive
termination and expiration of the Lease.

E. Change In or Contest of Taxes: In the event of any change by any
taxing body in the period or manner in which any of

April 15, 1991 9
<PAGE> 11
the Real Estate Taxes are levied, assessed or imposed, Landlord shall have the
right, in its sole discretion, to make equitable adjustments with respect to
computing increases in Tax Expenses. Any such Real Estate Taxes being
contested by Landlord shall be included in computing the Tax Expenses under
this Section, but if Tenant shall have paid Rent on account of the contested
Real Estate Taxes and Landlord thereafter receives a refund of such Real
Estate Taxes, Tenant shall receive a credit toward subsequent Rent payments in
an amount equal to Tenant's pro rata share of such refund.

6. USE.

A. Permitted Use: Tenant shall use and occupy the Premises solely for
classroom instruction on a college level and for office and administrative
activities directly related thereto and for no other purpose.

B. Legal and Other Restrictions of Tenant's Use: In its use of the
Premises and the Condominium, Tenant shall comply with all present and future
laws, regulations (including but not limited to fire and zoning regulations)
and ordinances of all public and quasi-public agencies having jurisdiction
over the Condominium. Tenant shall not use any portion of the Condominium or
use or occupy the Premises for any unlawful, disorderly or hazardous purposes
or in a manner which will interfere with the rights of Landlord, other tenants
or occupants or their invitees, or which will in any way injure or annoy any
of them.

C. Bookstore: Tenant may use a portion of the Premises as a bookstore
provided said use does not conflict with any present or future laws,
regulations or ordinances of all public and quasi-public agencies having
jurisdiction over the Condominium. In the event the bookstore requires
additional floor load, Landlord shall bear one-third (1/3) of the costs
associated with creating and/or constructing the floor load necessitated by
such use.

7. CARE OF PREMISES.

Tenant shall at its expense keep the Premises (including all improvements,
fixtures and other property located therein) in a neat and clean condition and
in good order and repair, and will suffer no waste or injury thereto. Tenant
shall surrender the Premises at the end of the Term in as good order and
condition as they were in on the Lease Commencement Date, ordinary wear and
tear excepted, as well as casualty which was not caused by the negligence of
Tenant.

8. ALTERATIONS BY TENANT.

A. Making of Alterations; Landlord's Consent: Tenant shall not make or
permit to be made any Alterations without the prior

April 15, 1991 10
<PAGE> 12
written consent of Landlord both as to whether the Alterations may be made and
as to how and when they will be made. Landlord's consent to Tenant's
Alterations shall not be unreasonably withheld; provided, however, that
Landlord shall not be deemed unreasonable by refusing to consent to any
Alterations which are visible from the exterior of the Building, which will or
are likely to cause any weakening of any part of the structure of the
Premises or the Building, which will or are likely to cause damage or
disruption to the central Building systems, or which are prohibited by any
underlying Ground Lease or Mortgage or by the Condominium Instruments. Any
Alterations shall be made at Tenant's expense, by its contractors and
subcontractors and in accordance with complete plans and specifications
approved in advance in writing by Landlord, and only after Tenant: (i) has
obtained all necessary permits from the appropriate governmental authorities
and has furnished copies thereof to Landlord, (ii) has submitted to Landlord a
copy of the document evidencing the Association's consent to the Alterations
(if such consent is required under the Condominium Instruments), (iii) has
submitted to Landlord an architect's certificate that the Alterations will
conform to all applicable laws and regulations, and (iv) has complied with all
other requirements reasonably imposed by Landlord, including without
limitation any requirements due to the underwriting guidelines of Landlord's
insurance carriers. Landlord's consent to any Alterations and approval of any
plans and specifications constitutes approval of no more than the concept of
these Alterations and does not constitute a representation or warranty with
respect to the quality or functioning of such Alterations, plans and
specifications. Tenant shall be and is solely responsible for the Alterations
and for the proper integration thereof with the Building, the Building's
systems and existing conditions. Landlord shall have the right, but not the
obligation, to supervise the making of any Alterations. If any Alterations
are made without the prior written consent of Landlord, or which do not
conform to plans and specifications approved by Landlord or to other
conditions imposed by Landlord pursuant to this Section or any other provision
of this Lease, Landlord may, in its sole discretion, correct or remove such
Alterations at Tenant's expense. Following completion of any Alterations, at
Landlord's request, Tenant either shall deliver to Landlord a complete set of
"as built" plans showing the Alterations or shall reimburse Landlord for any
expense incurred by Landlord in causing the Building plans to be modified to
reflect the Alterations. Except as set forth in Section 6.C., any structural
Alterations required to be made to the Building shall be performed by Landlord
at its expense.

B. No Liens: Tenant shall take all necessary steps to ensure that no
mechanic's or materialmen's liens are filed against the Premises or the
Condominium as a result of any Alterations made by the Tenant. If any
mechanic's or materialmen's lien is filed, Tenant shall discharge the lien
within ten (10) days thereafter, at Tenant's expense, by paying off or bonding
the lien.

April 15, 1991 11
<PAGE> 13
C. Removal of Alterations: At the time that Tenant requests Landlord to
approve any Alterations, Tenant may also request that Landlord notify Tenant
as to whether Landlord will require Tenant to remove such Alterations,
pursuant to Section 10A; otherwise, Landlord shall have no duty to so notify
Tenant.

9. EQUIPMENT.

A. Permitted Equipment: Tenant shall not install or operate in the
Premises any equipment or other machinery that, in the aggregate, will cause
Tenant to use more than the Premises' Standard Electrical Capacity, without:
(i) obtaining the prior written consent of Landlord, who may condition its
consent upon the payment by Tenant of Additional Rent for additional wiring or
other expenses resulting therefrom, including, without limitation, any charges
by the Association, (ii) obtaining prior written consent of the Association
(if required under the Condominium Instruments) and submitting a copy of the
document evidencing the Association's consent to Landlord, (iii) securing all
necessary permits from governmental authorities and utility companies and
furnishing copies thereof to Landlord, and (iv) complying with all other
requirements reasonably imposed by Landlord. Prior to the Lease Commencement
Date, Tenant shall provide Landlord with a list of all equipment that Tenant
intends to install or operate in the Premises which operate on more than one
hundred twenty (120) volts, and Tenant shall provide Landlord with an updated
list of such equipment prior to the installation or use of any additional
equipment which operates on more than one hundred twenty (120) volts. Tenant
shall not install any equipment or machinery which may necessitate any
changes, replacements or additions to or material changes in the use of water,
heating, plumbing, air conditioning or electrical systems of the Building
without obtaining the prior written consent of Landlord and (if required by
the Condominium Instruments) the Association, either of whom may withhold
their consent in their absolute discretion.

B. Payment For Excess Utility Usage: If Tenant's equipment shall result
in electrical demand in excess of the Premises' Standard Electrical Capacity,
Landlord shall have the right, but not the obligation, to install or have
installed additional transformers, distribution panels, wiring and other
applicable equipment at the expense of Tenant. None of the equipment so
installed shall be deemed to be Tenant's Personal Property. Tenant shall
reimburse Landlord for the cost of the installation of such equipment within
ten (10) days after receipt of any bill therefor from Landlord.

C. Noise; Vibration; Floor Load: Business machines and equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
any part of the Building to such a degree as to be objectionable to Landlord
or to any tenant or occupant of the Building, shall be installed and
maintained by Tenant at Tenant's expense on devices that eliminate the noise
and vibration. Tenant

April 15, 1991 12
<PAGE> 14
shall not place any load upon the floor of the Premises which exceeds the per
square foot load the floor was designed to carry (i.e., sixty (60) pounds live
and twenty (20) pounds dead per square foot).

10. OWNERSHIP AND REMOVAL OF PROPERTY.

A. Landlord's Property. Any Alterations and other improvements and any
equipment, machinery, furnishings and other property, installed or located in
the Premises or the Condominium by or on behalf of Landlord or Tenant, except
for Tenant's Personal Property: (i) shall immediately become the property of
Landlord, and (ii) shall be surrendered to Landlord with the Premises as a
part thereof at the end of the Term; provided, however, that if Landlord
requests Tenant to remove any Alterations (including, without limitation, any
signage) installed by or on behalf of Tenant, Tenant shall cause the same to
be removed at Tenant's expense on or before the Lease Expiration Date, or
shall reimburse Landlord for the cost of such removal, as elected by Landlord
(unless Landlord expressly waives in writing the right to require such removal
at the time Landlord makes or gives its consent to the making of such
Alterations, pursuant to Section 8C).

B. Removal of Property At End of Term: Tenant shall remove all of
Tenant's Personal Property from the Premises on or before the Lease Expiration
Date. Any personal property belonging to Tenant or to any other person or
entity which is left in the Premises after the date this Lease is terminated
for any reason shall be deemed to have been abandoned. In such event,
Landlord shall have the right to store such property at Tenant's sole cost
and/or to dispose of it in whatever manner Landlord considers appropriate,
without waiving its right to claim from Tenant all expenses and damages caused
by Tenant's failure to remove such property, and Tenant and any other person
or entity shall have no right to compensation from or any other claim against
Landlord as a result.

11. ACCESS TO PREMISES.

A. Access by Landlord: Landlord may, upon 24 hours prior notice, which
may be oral or written, enter the Premises at any reasonable time to examine
them, to make alterations or repairs thereto or for any other purposes which
Landlord considers necessary or advisable; provided, however, that in the case
of any emergency, Landlord and its agents may enter the Premises at any time
without notice and in any manner. Notwithstanding the foregoing, Landlord
shall use its best efforts not to disrupt Tenant's classes when entering the
Premises. Tenant shall allow the Premises to be exhibited by Landlord: (i) at
any reasonable time to representatives of lending institutions or to
prospective purchasers of the Premises, and (ii) at any reasonable time within
six (6) months prior to the end of the Term to persons who may be

April 15, 1991 13
<PAGE> 15
interested in leasing the Premises. Landlord reserves the right and shall be
permitted reasonable access to the Premises to install facilities within and
through the Premises and to install and service any systems deemed advisable
by Landlord to provide services or utilities to any tenant or occupant of the
Building; provided however, that whenever possible, any equipment installed
pursuant to this Section shall be done so that the same runs through the
plenum or other concealed portions of the Premises. In the event Landlord
exercises its rights under this Subsection, Landlord shall use all reasonable
efforts to minimize disruption to Tenant.

B. Access by Association and the Declarant: The Association and the
Declarant shall have the right to enter the Premises for the purposes set
forth in and in compliance with the Condominium Instruments.

12. SERVICES AND UTILITIES.

A. Services Obtained by Tenant: All gas, electric, heat, light,
telephone services and other utilities and services supplied to the Premises
which are not supplied by the Association shall be obtained by Tenant directly
from the providers thereof and Tenant shall pay all deposits, charges, costs
and expenses relating to the foregoing utility connections and services
directly to the providers thereof. Tenant shall have complete control over
the hours of operation and use of gas, electric, heat, light, telephone
services and all other utilities supplied to the Premises which are not
supplied by Landlord or the Association, and shall pay all costs associated
therewith. Tenant hereby indemnifies and holds Landlord harmless from any
damages, losses, costs, expenses, liabilities and claims that may be made by
such companies or utilities which may arise from Tenant's use of such
utilities and services or failure to pay any charges for such use.

B. Failure to Provide Services: Landlord's failure to provide, to any
extent, the foregoing services due to Unavoidable Delays shall not render
Landlord liable for damages to either person or property, nor be construed as
an eviction of Tenant, nor work as an abatement of any portion of Rent, nor
relieve Tenant from fulfillment of any covenant or agreement hereof, provided
that (i) Landlord shall use reasonable diligence to promptly cure any such
failure, and (ii) where such failure to provide such services causes the
Premises to be not reasonably usable for Tenant's business for more than ten
(10) days, then commencing on the date which is eleven (11) days after the
commencement of such failure and continuing until the date on which the
Premises are again reasonably usable for the operation of Tenant's business,
Tenant shall be entitled to an abatement of Rent. In the event Landlord
denies Tenant access to the Premises after such ten (10) day period, such
abatement shall also apply to the period during which Tenant has been denied
access by Landlord. In the event Landlord's

April 15, 1991 14
<PAGE> 16
failure to provide any of the foregoing services is not due to Unavoidable
Delays, such failure shall not render Landlord liable for damages to either
person or property, nor be construed as an eviction of Tenant, nor work as an
abatement of any portion of Rent, nor relieve Tenant from fulfillment of any
covenant or agreement hereof, provided that (a) Landlord uses reasonable
diligence to promptly cure any such failure, and (b) where such failure to
provide services causes the Premises to be not reasonably usable for Tenant's
business for more than five (5) days, then commencing on the date which is six
(6) days after the commencement of such failure and continuing until the date
on which the Premises are again reasonably usable for the operation of
Tenant's business, Tenant shall be entitled to an abatement of Rent. In the
event Landlord denies Tenant access to the Premises after such five (5) day
period, such abatement shall also apply to the period during which Tenant has
been denied access by Landlord.

C. Conservation: Tenant hereby agrees to comply with all energy
conservation procedures, controls and requirements instituted by Landlord
pursuant to any government regulations. Institution by Landlord of such
controls and requirements shall not entitle Tenant to terminate this Lease or
to an abatement of any Rent payable hereunder.

13. INFECTIOUS WASTE.

Tenant shall indemnify and hold Landlord harmless from and against any
costs, damages, losses, claims, injuries, liabilities or expenses, including
attorneys' fees, to Landlord, Landlord's employees or agents, or to third
parties, arising out of the handling, generation, packaging, labelling,
storage, treatment, transportation or disposal of Infectious Waste (as
hereinafter defined) by the Tenant, its employees, contractors or agents.
Tenant further represents and warrants that Tenant and its employees,
contractors and agents will conduct any and all activity involving the
handling, generation, packaging, labelling, recordkeeping, storage, treatment,
transportation or disposal of Infectious Waste in compliance with the Virginia
Infectious Waste Management Regulations. As used herein, the term "Infectious
Waste" shall have the meaning set forth in the Virginia Department of Waste
Management Infectious Waste Management Regulations, VR 672-40-01, or in any
subsequent amendments or revisions thereto.

14. REPAIR OF DAMAGE CAUSED BY TENANT: INDEMNIFICATION.

A. Repairs: Except as otherwise expressly provided in this Lease, all
injury, breakage and damage to the Premises or Condominium caused by any act
or omission of Tenant shall be repaired by and at the sole expense of Tenant,
except Landlord shall have the right, at its option, to make such repairs or
cause such repairs to

April 15, 1991 15
<PAGE> 17
be made and to charge Tenant for all costs and expenses incurred in connection
therewith as Additional Rent payable within ten (10) days after the rendering
of a bill therefor. Tenant shall notify Landlord promptly of any injury,
breakage or damage to the Premises or Condominium caused by Tenant.

B. Indemnification: [INTENTIONALLY DELETED]

15. LIMITATION ON LANDLORD LIABILITY.

A. Liability Standard. [INTENTIONALLY DELETED]

B. Limitation on Total Liability. Notwithstanding any other provision
of this Lease, it is expressly understood and agreed that the total liability
of Landlord arising out of or in connection with this Lease, the relationship
of Landlord and Tenant hereunder and/or Tenant's use of the Premises, shall be
limited to the estate of Landlord in the Premises. No other property or
assets of Landlord or any partner or owner of Landlord shall be subject to
levy, execution or other enforcement proceedings or other judicial process for
the satisfaction of any judgment or any other right or remedy of Tenant
arising out of or in connection with this Lease, the relationship of Landlord
and Tenant hereunder and/or Tenant's use of the Premises.

April 15, 1991 16
<PAGE> 18
16. FIRE AND OTHER CASUALTY.

If the Premises shall be damaged by fire or other casualty, this Lease
shall not terminate and, upon adjustment of insurance claims, the Association
shall repair the damage to the Premises that the Association is required to
repair under the Condominium Instruments and the remainder of the damage not
repaired by the Association shall, at Landlord's option, either: (i) be
repaired by Tenant, at Tenant's sole cost and expense (regardless of the
adequacy or inadequacy of insurance proceeds received by Tenant) or (ii) be
repaired by Landlord, at Tenant's sole cost and expense (regardless of the
adequacy or inadequacy of insurance proceeds received by Tenant), provided
that Landlord shall have no obligation to commence any such repair until all
funds estimated by Landlord to be necessary for such repair, including,
without limitation, the proceeds of Tenant's insurance described in Section
17A(1) below, have been deposited with Landlord. Tenant shall have the sole
obligation to repair damage to or replace Tenant's Personal Property. Except
as otherwise provided herein, if any part of the Premises are rendered
untenantable by reason of any such damage, Rent shall abate from the date of
the damage to the date the damage is repaired (or, if Tenant is performing the
repair work, to the date on which the Premises should have been repaired by
Tenant using prompt and diligent efforts), as determined by Landlord, in the
proportion that the area of the untenantable part bears from time to time to
the total area of the Premises. No compensation or reduction of Rent shall be
paid or allowed for inconvenience, annoyance or injury to Tenant or Tenant's
business arising from any damage to or repair of the Premises or any portion
of the Condominium.

Notwithstanding the foregoing, if prior to or during the Term of this
Lease, the Premises are so damaged that, in the opinion of an independent
architect who is mutually acceptable to both Landlord and Tenant, the Premises
cannot be fully repaired within one hundred fifty (150) days from the date the
damage occurred, or the Building is so damaged that, in the opinion of such
independent architect, substantial repair or reconstruction of the Building
shall be required (whether or not the Premises are damaged or rendered
untenantable), then, in any such events:

(1) Landlord, at its option, may give to Tenant within sixty (60)
days after such fire or other casualty, thirty (30) days' notice of
termination of this Lease and, in the event such notice is given, this
Lease shall terminate (whether or not the Term shall have commenced) upon
the expiration of such thirty (30) days, with the same effect as if the
date of expiration of such thirty (30) days were the date definitely
fixed for expiration of the Term of the Lease, and the then applicable
monthly Rent shall be apportioned as of such date; and

April 15, 1991 17
<PAGE> 19
(2) Provided Landlord, under the terms of the construction and/or
permanent financing documents applicable to the Building then in effect,
is not deprived of the use of insurance proceeds as a result of granting
a tenant the right to terminate its Lease in case of a fire or other
casualty, Tenant shall have the right to terminate this Lease upon thirty
(30) days' written notice to Landlord, said notice to be given within
sixty (60) days after such fire or other casualty. In the event such
notice is given, this Lease shall terminate (whether or not the Term
shall have commenced) upon the expiration of such thirty (30) days with
the same effect as if the date of expiration of such thirty (30) days
were the date definitely fixed for expiration of the Term of the Lease,
and the then applicable monthly Rent shall be apportioned as of such
date, including any Rent abatement provided above. Tenant may cancel
this Lease in the event the Premises are not substantially restored to
the extent of Landlord's obligations hereunder within two hundred forty
(240) days from the date the damage occurred. To exercise this right
Tenant shall deliver written notice to Landlord delivered no later than
five (5) business days after the expiration of that period.

For the purposes of this Section of the Lease the term "untenantable"
means not reasonably usable by Tenant for its business purposes.

17. TENANT INSURANCE.

A. Types of Insurance Required: Tenant, at Tenant's expenses, shall
obtain and maintain in effect, at all times during the Term, insurance
policies providing at least the following coverage:

(1) A policy of fire and extended coverage insurance (i.e., an "all
risk" policy) for not less than full replacement value, covering all
Alterations made to the Premises by Tenant except those that are insured
by the Association. All proceeds of such insurance shall be used to
repair or replace the items so insured. Notwithstanding anything
contained herein, Tenant shall not be required to insure the improvements
associated with the initial buildout of the Premises which is defined as
Landlord's Work in Exhibit C attached hereto and made a part hereof.
Tenant hereby agrees that no lack or inadequacy of insurance by Tenant
shall in any event make Landlord subject to any claim by virtue of any
theft or loss or damage to any uninsured or inadequately insured
property. The insurance policy referenced above and the certificate
thereof shall name Tenant as named insured thereunder and shall name
Landlord and all mortgagee's and Ground Lessors of Landlord as additional
named insureds, of which Tenant has been notified, all as their
respective interest may appear.

April 15, 1991 18
<PAGE> 20
(2) A comprehensive general liability insurance policy, with broad
form property damage endorsement, naming Landlord, the Mortgagees and
Ground Lessors as additional insureds and protecting Landlord, Tenant,
the Mortgagees and Ground Lessors against any liability for bodily
injury, personal injury, death or property damage occurring upon, in or
about the Premises or the Condominium or arising out of or relating to
any of the risks against which Tenant is required to indemnify Landlord,
with such policy to afford protection with a combined single limit of not
less that One Million Dollars ($1,000,000.00). From time to time during
the Term, Landlord may require Tenant to increase the limits of said
insurance to the limits of liability insurance then customarily required
of tenants of other first-class office buildings in the Loudoun County,
Virginia area.

B. Required Provisions of Policies: All insurance policies required to
be maintained by Tenant under this Lease must: (i) be issued by insurance
companies approved by Landlord which approval will not be unreasonably
withheld; (ii) be in form and have content reasonably satisfactory to
Landlord, which approval shall not be unreasonably withheld (iii) be written
as primary policy coverage and not contributing to or in excess of any
coverage which Landlord or the Mortgagees may carry; (iv) contain an express
waiver of any right of subrogation by the insurance company against Landlord,
the Mortgagees, the Ground Lessors, and their respective employees and agents;
(v) comply with all requirements of the Condominium Instruments; and (vi)
provide that the policy may not be canceled or permitted to lapse unless
Landlord shall have received at least fifteen (15) days prior written notice
of cancellation or non-renewal. Tenant shall deliver to Landlord certified
copies or duplicate originals of each such policy and any renewal policy,
together with evidence of payment of all applicable premiums, at least ten
(10) days before the Lease Commencement Date and at least thirty (30) days
before the renewal of any policies. Any insurance required of Tenant under
this Section may be carried under a blanket policy, provided that said policy
shall specifically set forth the amount of insurance allocated to this Lease.

C. Effect of Tenant's Activities on Insurance: Tenant shall not conduct
or permit to be conducted any activity, or place any equipment in or about the
Premises or the Condominium which will increase the rate of, or make void or
voidable, any fire or other insurance maintained or required to be maintained
by Landlord, any Mortgagee, any Ground Lessor or the Association on the
Premises, the Condominium or property kept thereon or therein, which will
conflict with the provisions of any such insurance policy or which will make
it impracticable for Landlord or the Association to obtain insurance covering
any risks against which Landlord or the Association reasonably deems it
advisable to obtain insurance. In the event any increases in the rates of
such insurance are due to (i) the Tenant's presence in the Building, (ii) any
activity

April 15, 1991 19
<PAGE> 21
conducted or property installed or placed by Tenant on or about the Premises
or the Condominium or (iii) Alterations installed by Tenant or at Tenant's
request (other than Building Standard Work, as defined in the Work Agreement),
Tenant shall reimburse Landlord for the amount of such increases promptly upon
demand therefor. Statements by the applicable insurance company or insurance
rating bureau that such increases are due to any such activity, property or
improvements shall be conclusive for the purposes of determining Tenant's
liability hereunder.

D. Waiver: Landlord and Tenant hereby each waive and release each other
from any and all liabilities, claims and losses for which Landlord or Tenant
is or may be held liable, to the extent either party: (i) receives insurance
proceeds on account thereof, or (ii) is required to maintain insurance
pursuant to this Section, whichever is greater.

E. Landlord's Insurance: Landlord at Landlord's expense, shall obtain
and maintain in effect, at all times during the Term, fire and extended
coverage or all risk property insurance upon the Building and Landlord's Work
in an amount equal to at least eighty percent (80%) of their insurable value,
and, upon request, shall make copies of certificates thereof available for
Tenant's inspection. Such property policy shall contain an express waiver of
any right of subrogation by the insurance company against Tenant. Further,
Landlord shall obtain and maintain in effect at all times during the Term,
policies of fire, and boiler (if any exist in the Building) insurance, on
forms prepared and issued by insurance companies approved by Mortgagee(s), and
in form and amount satisfactory to such Mortgagee(s). Landlord shall also
maintain in effect commercial general liability insurance with coverage of at
least $1,000,000.00 combined single limit annual aggregate.

18. CONDEMNATION.

A. Right to Terminate: If a substantial part of the Premises or the
Condominium is taken or condemned by any governmental authority for any
purpose or is granted to any authority in lieu of condemnation (collectively,
a "taking"), then either Landlord or Tenant shall have the right to terminate
this Lease by written notice to the other, and upon the giving of such notice,
the Term shall terminate as of the date title vests in the authority, and Rent
shall be abated as of that date. For purposes of this Section, a substantial
part of the Premises or the Condominium shall be thirty percent (30%) or more
of the Premises or the Condominium.

B. Adjustment of Rent: If a portion of the Premises is taken and
neither Landlord nor Tenant elects to terminate this Lease pursuant to
Subsection A above, then Rent shall be equitably

April 15, 1991 20
<PAGE> 22
adjusted as of the date title vests in the authority and this Lease shall
otherwise continue in full force and effect.

C. Division of Award: Tenant shall have no claim against Landlord
arising out of or related to any taking, or for any portion of the amount that
may be awarded as a result, and Tenant hereby assigns to Landlord all its
rights, title and interest in and to any such award; provided, however, that
Tenant may assert any claim it may have against the authority for compensation
for Tenant's Personal Property and for any relocation expenses compensable by
statute, as long as such awards shall be made in addition to and stated
separately from the award made for the Premises and the Condominium.

19. DEFAULT.

A. Default of Tenant: The following events shall be a default by Tenant
("Default") under this Lease:

(1) Failure of Tenant to pay Rent as and when due, if the failure
continues for five (5) days after notice from Landlord specifying the
failure.

(2) Failure of Tenant to comply with or perform any covenant or
obligation of Tenant under this Lease, other than those concerning the
payment of Rent, or under the Condominium Instruments, if the failure
continues for thirty (30) days after notice from Landlord to Tenant
specifying the failure; provided, however, that if such failure cannot,
with due diligence and in good faith, be cured within such thirty (30)
day period, Tenant shall have an additional period as may be reasonably
required to cure such default with due diligence and in good faith,
provided that Tenant commences such cure within the aforementioned thirty
(30) day period.

(3) If Tenant, shall file a voluntary petition in bankruptcy or
insolvency, shall be adjudicated bankrupt or insolvent or shall file a
petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future federal, state or other law, or shall make an
assignment for the benefit of creditors, or shall seek or acquiesce in
the appointment of any trustees receiver or liquidator of Tenant of all
or any part of the property of Tenant.

(4) If, within thirty (30) days after the commencement of any
proceeding against Tenant or a Guarantor or Partner, whether by the
filing of a petition or otherwise, seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future applicable federal, state or
other law, such

April 15, 1991 21
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proceeding shall not have been dismissed or if, within thirty (30) days
after the appointment of any trustee, receiver or liquidator of Tenant or
any Guarantor or Partner, or of all or any part of the property of Tenant
or of any Guarantor or Partner, without the acquiescence of such
individual or entity, such appointment shall not have been vacated or
otherwise discharged, or if any execution or attachment shall have been
issued against the property of Tenant or of any Guarantor or Partner,
pursuant to which the Premises shall be taken or occupied or attempted to
be taken or occupied.

(5) If Tenant fails to take possession of the Premises ten (10)
days after the Lease Commencement Date or vacates or abandons the
Premises prior to the Lease Expiration Date. Notwithstanding the
foregoing, provided that Tenant is not (i) delinquent in the payment of
any Rent at the time of the vacation or abandonment, (ii) continues to
pay Rent as and when it is due, and (iii) leaves the vacated or abandoned
Premises in a manner and condition suitable to Landlord, then Tenant
shall not be considered in Default under the Lease. In the event that
Landlord wishes to take-back the Premises due to a vacation or
abandonment of the Premises by Tenant, then Tenant shall enter into good
faith negotiations with Landlord to terminate this Lease.

B. Remedies Upon Default: Upon the occurrence of a Default, Landlord
shall have the right, then or at any time thereafter:

(1) Without demand or notice, to reenter and take possession of all
or any part of the Premises, to expel Tenant and those claiming through
Tenant and to remove any property therein, either by summary proceedings
or by any other action at law, in equity or otherwise, with or without
terminating this Lease, without being deemed guilty of trespass and
without prejudice to any other remedies of Landlord for breach of this
Lease, and/or

(2) To give Tenant written notice of Landlord's intent to terminate
this Lease, and on the date specified in Landlord's notice, Tenant's
right to possession of the Premises shall cease and this Lease shall
terminate.

If Landlord elects to terminate this Lease, everything contained in this
Lease on the part of Landlord to be done shall cease, without prejudice to
Landlord's right to recover from Tenant all Rent, as set forth in Subsections
C and D below. If Landlord elects to reenter pursuant to Subsection B(1)
above, Landlord may terminate this Lease, or, from time to time without
terminating this Lease, may relet all or any part of the Premises as the agent
of Tenant, for such term, at such rental and in accordance with such other
provisions as Landlord deems acceptable, with the right to make any
alterations and repairs to the Premises that Landlord

April 15, 1991 22
<PAGE> 24
deems appropriate, at Tenant's expense. No such reentry or taking of
possession of the Premises shall be construed as an election to terminate this
Lease, unless notice of such intention is given pursuant to subsection B(2)
above, or unless termination be decreed by a court of competent jurisdiction
at the insistence of Landlord. Landlord shall in no event be under any
obligation to relet any part of the Premises.

C. Liability of Tenant: If Landlord terminates this Lease or reenters
the Premises (with or without terminating this Lease), Tenant shall remain
liable (in addition to all other liabilities of Tenant accrued at the time of
the Default) for the sum of (i) any unpaid Rent accrued prior to the time of
termination and/or reentry, as the case may be, plus interest thereon from the
due date at the Default Rate, (ii) all Base Rent and Additional Rent provided
for in this Lease from the time of termination and/or reentry, as the case may
be, until the date this Lease would have expired had a Default not occurred,
plus interest thereon from the due date at the Default Rate, (iii) any and all
expenses (including but not limited to reasonable attorneys' and reasonable
brokerage fees) incurred by Landlord in reentering and repossessing the
Premises, in correcting any default, in painting, altering or repairing the
Premises in order to place the Premises in the same condition it was in on the
Lease Commencement Date (whether or not the Premises are relet), in protecting
and preserving the Premises and in reletting or attempting to relet the
Premises, and (iv) any other amounts necessary to compensate Landlord for any
other injury or detriment caused by the Default, minus the net proceeds (after
deducting any actual and commercially reasonable rental abatements, tenant
improvement allowances and other concessions and inducements) actually
received by Landlord, if any, from any reletting to the extent attributable to
the period prior to the date this Lease would have expired had a Default not
occurred. Landlord shall have the option to recover any damages sustained by
Landlord either at the time of reletting, if any, or in separate actions from
time to time as said damages shall have been made more easily ascertainable by
successive relettings or, at Landlord's option, to defer any such recovery
until the date this Lease would have expired in the absence of a Default, in
which event Tenant hereby agrees that the cause of action shall be deemed to
have accrued on the aforesaid date. The provisions of this Section shall be
in addition to and shall not prevent the enforcement of any claim Landlord may
have for anticipatory breach of this Lease. Landlord shall use reasonable
efforts to relet the Premises in the event of a Default which results in the
eviction or other vacation of the Premises by Tenant.

D. Waiver: Tenant, on its own behalf and on behalf of all persons and
entities claiming through Tenant, including but not limited to creditors of
Tenant, hereby waives any and all rights and privileges which Tenant and such
other persons and entities might otherwise have under any present or future
law: (i) to redeem

April 15, 1991 23
<PAGE> 25
the Premises, (ii) to renter or repossess the Premises, or (iii) to restore
the operation of this Lease, with respect to any dispossession of Tenant by
judgment or warrant of any court, any reentry by Landlord or any expiration or
termination of this Lease, whether by operation of law or pursuant to the
provisions of this Lease.

E. Right of Distress: Landlord shall, to the extent permitted by law,
have a right of distress for Rent.

F. Right of Landlord to Cure: If Tenant defaults in the making of any
payment or in the doing of any act required to be made or done by Tenant under
this Lease or under the Condominium Instruments, then Landlord may, at its
option, make such payment or do such act, and the expenses thereof, with
interest thereon at the Default Rate, from the date paid by Landlord, shall
constitute Additional Rent hereunder due and payable by Tenant with the next
payment of Monthly Base Rent.

G. Attorneys' Fees: (i) Except as provided below, in the event of any
Default hereunder, Tenant shall pay to Landlord all attorneys' fees incurred
by Landlord in connection with such Default or the enforcement of Landlord's
rights or remedies arising in connection therewith, whether or not this Lease
is terminated and even if Landlord does not institute any lawsuit against
Tenant as a result of such Default.

(ii) To the extent permitted by law, in any action or proceeding
brought by either party against the other under this Lease, the prevailing
party shall be entitled to recover from the other party its actual
professional fees such as appraisers', accountants' and attorneys' fees,
investigation costs, and other legal expenses and court costs incurred by the
prevailing party in such action or proceeding. A party shall be considered a
prevailing party if under a settlement agreement such party receives payment
from the other party, whether for all or any portion of its claims.

H. Survival: Tenant's liability pursuant to this Section shall survive
the termination of this Lease, the institution of summary proceedings and/or
the issuance of a warrant thereunder.

I. Landlord Default: In the event Landlord fails to perform any of its
obligations hereunder, for any reason other than an Unavoidable Delay, Tenant
shall notify Landlord of said failure or default and Landlord shall have
fourteen (14) days thereafter in which to cure the same. In the event
Landlord has not cured or commenced a cure of the failure or default within
said fourteen (14) days, Tenant may correct the failure or default and
Landlord shall reimburse Tenant for the reasonable cost thereof upon receipt
of an invoice in form reasonably acceptable to Landlord.

April 15, 1991 24
<PAGE> 26
20. NO WAIVER.

No failure or delay by Landlord in enforcing its right to strict
performance by Tenant of every provision of this Lease or in exercising any
right or remedy hereunder, and no acceptance by Landlord of full or partial
rent during the continuance of any Default, shall constitute a waiver of the
provision or the Default, and no provision shall be waived or modified except
by a written instrument executed by Landlord. No payment by Tenant or receipt
by Landlord of a lesser amount than the full Rent shall be deemed to be other
than a payment on account, notwithstanding any endorsement or statement on any
check or letter accompanying any payment of any Rent. No waiver of any
Default or settlement of any proceeding instituted on account of any claimed
Default shall affect or alter this Lease or constitute a waiver of any of
Landlord's rights hereunder. No failure or delay by Tenant in enforcing its
right to strict performance by Landlord of every provision of this Lease or in
exercising any right or remedy hereunder, shall constitute a waiver of the
provision or the Default, and no provision shall be waived or modified except
by a written instrument executed by Tenant. No waiver of any Default or
settlement of any proceeding instituted on account of any claimed Default
shall affect or alter this Lease or constitute a waiver of any of Tenant's
rights hereunder.

21. HOLDING OVER.

If Tenant shall be in possession of the Premises after termination of
this Lease (whether by normal expiration of the Term or otherwise), at
Landlord's option: (i) Landlord may deem Tenant to be occupying the Premises
as a tenant from month-to-month, at one and one-half (1-1/2) times the Monthly
Rent in effect for the last full month of the Term, and subject to all of the
other provisions of this Lease, as applicable to a month-to-month tenancy, or
(ii) Landlord may exercise any or all remedies for Default at law and in
equity, including but not limited to an action against Tenant for wrongfully
holding over.

22. SUBORDINATION.

A. Lease Subordinate: This Lease shall be subject and subordinate to
the lien of any and all Mortgages and to any Ground Leases, and any and all
renewals, extensions, modifications, recastings and refinancings thereof.
This clause shall be self-operative, without execution of any further
instrument; but if requested by Landlord or any Mortgagee, Tenant shall
promptly execute a certificate or other document evidencing and providing for
such subordination. Landlord shall have the right to execute said document on
behalf of Tenant if Tenant fails to do so within fifteen (15) days after
receipt of the request. Tenant agrees that, if any Mortgage is foreclosed or
Ground lease terminated, upon request by the purchaser at the foreclosure sale
or Ground

April 15, 1991 25
<PAGE> 27
Lessor, as the case may be, Tenant shall attorn to and recognize the purchaser
or Ground Lessor as the landlord under this Lease and shall make all payments
required hereunder to such new landlord without any deduction or set-off of
any kind whatsoever. Tenant waives the provisions of any law or regulation,
now or hereafter in effect, which may give or purport to give Tenant any right
to terminate or otherwise affect this Lease or the obligations of Tenant
hereunder in the event that any such foreclosure, termination or other
proceeding is filed, prosecuted or completed. Notwithstanding anything herein
to the contrary, any Mortgagee may at any time subordinate the lien of its
Mortgage to the operation and effect of this Lease without Tenant's consent,
by giving Tenant written notice of such subordination, in which event this
Lease shall be deemed to be senior to such Mortgage, and thereafter such
Mortgagee shall have the same rights as it would have had if this Lease had
been executed, delivered and recorded before said Mortgage. Landlord shall
use reasonable efforts to obtain a Non-Disturbance and Subordination agreement
from all existing and future Ground Lessors and Mortgagees. Attached hereto
and made a part hereof as Exhibit D is a copy of Landlord's request for a Non-
Disturbance and Subordination Agreement from Landlord's existing Mortgagee,
Sovran Bank, N.A.

B. Modifications to Lease: In the event any of Landlord's insurance
carriers or any Mortgagee requests modifications to this Lease, Tenant shall
execute a written amendment incorporating such requested modifications within
thirty (30) days after the same has been submitted to Tenant by Landlord,
provided that such modifications do not materially adversely affect Tenant's
use of the Premises as herein permitted or increase the rentals and other sums
payable by Tenant hereunder. In the event Tenant refuses or fails to execute
such amendment within thirty (30) days, Landlord shall have the right, at its
sole option, in addition to Landlord's other remedies for Default, to
terminate and cancel this Lease by written notice to Tenant specifying the
date on which this Lease will terminate. From and after said termination
date, both Landlord and Tenant shall be relieved of any and all further
obligations hereunder, except for liabilities arising prior to the date of
termination.

23. ASSIGNMENT AND SUBLETTING.

A. No Transfer Without Consent: Tenant shall not, without the prior
written consent of Landlord in each instance (which consent will not be
unreasonably withheld in the case of a sublease so long as Tenant is not in
default hereunder), (i) assign, mortgage or otherwise encumber this Lease or
any of its rights hereunder; (ii) sublet the Premises or any part thereof or
permit the occupancy or use of the Premises or any part thereof by any persons
or entities other than Tenant; or (iii) permit the assignment of this Lease or
any of Tenant's rights hereunder by operation of law. Any attempted
assignment, mortgaging or

April 15, 1991 26
<PAGE> 28
encumbering of this Lease or any of Tenant's rights hereunder and any
attempted subletting or grant of a right to use or occupy all or a portion of
the Premises in violation of the foregoing sentence shall be void.

B. Take-Back Rights: Tenant may not assign this Lease, nor sublet (or
permit occupancy or use of) the Premises, or any part thereof, without giving
Landlord ten (10) days prior written notice thereof. If Tenant has notified
Landlord of its desire to sublet in excess of twenty-five percent (25%) of the
Premises or to assign this Lease, then for ten (10) days following receipt of
said notice, Landlord shall have the right, exercisable by sending notice to
Tenant, to sublet from Tenant for the balance of the Term of this Lease (i)
all of the Premises, in the event Tenant notified Landlord of its desire to
assign this Lease, or (ii) so much of the Premises as Tenant intends to
sublet, in the event Tenant notified Landlord of its desire to sublet in
excess of twenty-five percent (25%) of the Premises or to permit another to
use in excess of twenty-five percent (25%) of the Premises, at the same rental
Tenant is obligated to pay to Landlord hereunder. In the event Landlord does
not exercise the aforesaid right within ten (10) days, Tenant may attempt to
assign this Lease or sublet or permit use of such space, as applicable;
provided, however, that Tenant shall obtain the prior written consent of
Landlord as set forth in Subsection A above. In the event that Tenant
defaults hereunder, Tenant hereby assigns to Landlord the Rent due from any
assignee or subtenant and hereby authorizes each such party to pay said Rent
to Landlord.

C. Transfer of Stock: If Tenant and/or any Guarantor is a corporation,
then the sale, issuance or transfer of any voting capital stock of Tenant or
any Guarantor, by the person, persons or entities owning a controlling
interest therein as of the date of this Lease, which results in a change in
the voting control of Tenant or the Guarantor, shall be deemed an assignment
within the meaning of this Section. If Tenant and/or any Guarantor is a
partnership, the sale or transfer of the partnership share, or any portion
thereof, of any general partner shall be deemed an assignment of this Lease,
provided, however, that the sale or transfer of any such partnership share
shall not be deemed an assignment of this Lease so long as (i) Tenant has a
controlling interest in the entity to which such partnership share was sold or
transferred, or is otherwise liable under this Lease and (ii) the entity to
which such partnership share was sold or transferred has net assets on the
date of such sale or transfer equal to or greater than Tenant's net assets on
the date this Lease is executed.

D. Expenses and Profits; Effect of Consent:

(1) In the event Landlord permits Tenant to assign or sublet
all or a portion of the Premises to a third party, then if the rent rate
agreed upon between Tenant and its proposed subtenant is

April 15, 1991 27
<PAGE> 29
greater than the rent rate that Tenant must pay Landlord hereunder for that
portion of the Premises, or if any consideration shall be promised to or
received by Tenant in connection with such proposed assignment or sublease (in
addition to rent), then one-half (1/2) of such excess rent and other
consideration shall be considered Additional Rent owed by Tenant to Landlord
(less brokerage commissions, attorneys' fees and other disbursements
reasonably incurred by Tenant for such assignment and subletting if acceptable
evidence of such disbursement is delivered to Landlord), and shall be paid by
Tenant to Landlord, in the case of excess rent, in the same manner that Tenant
pays Monthly Base Rent and, in the case of any other consideration, within ten
(10) days after receipt thereof by Tenant.

(2) Tenant shall be responsible for all costs and expenses, including
attorneys' fees, incurred by Landlord in connection with any proposed or
purported assignment or sublease.

(3) The consent by Landlord to any assignment or subletting shall
neither be construed as a waiver or release of Tenant from any covenant or
obligation of Tenant under this Lease, nor as relieving Tenant from giving
Landlord the aforesaid ten (10) days notice of, or from obtaining the consent
of Landlord to, any further assignment or subletting. The collection or
acceptance of Rent from any such assignee or subtenant shall not constitute a
waiver or release of Tenant from any covenant or obligation of Tenant under
this Lease, except as expressly agreed by Landlord in writing. In no event
shall any assignment, subletting or transfer, whether or not with Landlord's
consent, relieve Tenant of its primary liability under this Lease for the
entire Term, and Tenant shall in no way be released from the full and complete
performance of all the terms hereof.

(4) Notwithstanding anything in Subsections A or B above to the
contrary, Tenant shall have the right, upon ten (10) days prior written notice
to Landlord: (a) to sublet all or part of the Premises to any related
corporation or entity which controls Tenant, is controlled by Tenant or is
under common control with Tenant; or (b) to assign this Lease to a successor
corporation into which or with which Tenant is merged or consolidated or which
acquired substantially all of Tenant's assets and property; provided, however,
that (i) such assignee assumes all of the obligations and liabilities of
Tenant, (ii) any such sublessee or assignee shall have assets, capitalization
and net worth at least equal to the assets, capitalization and net worth of
Tenant as of the date of this Lease or as of the date of the assignment or
sublease, whichever is greater, as determined by generally accepted accounting
principles, and (iii) Tenant shall provide in its notice to Landlord (a) the
name, current address and business of the proposed assignee or sublessee, (b)
the amount and location of the space within the Premises proposed to be so
subleased, (c) the proposed effective date and duration of the assignment or

April 15, 1991 28
<PAGE> 30
subletting, and (d) the proposed rent or consideration to be paid to Tenant by
such assignee or sublessee. Tenant also shall promptly supply Landlord with
financial statements and other information as Landlord may request to evaluate
the proposed assignment or sublease. For the purpose hereof, "control" shall
mean ownership of not less than fifty percent (50%) of all the voting stock or
legal and equitable interest in such corporation or entity.

24. TRANSFER BY LANDLORD.

Landlord (and any successor or affiliate of Landlord) may freely sell,
assign or transfer all or any portion of its interest in this Lease or the
Premises, and, in the event of any such sale, assignment or transfer, Landlord
shall be relieved of any and all obligations under this Lease from and after
the date of the sale, assignment or transfer, provided any Security Deposit
held by Landlord hereunder is also transferred. From and after said date,
Tenant shall be bound to such purchaser, assignee or other transferee, as the
case may be, as though the latter had been the original Landlord hereunder,
provided that the purchaser, assignee or transferee agrees to assume the
obligations of Landlord hereunder.

25. INABILITY TO PERFORM.

This Lease and Tenant's obligation hereunder shall in no way be affected,
impaired or excused, nor shall Tenant have any claim against Landlord for
damages, because Landlord or the Association, due to Unavoidable Delays, is
unable to fulfill any of its obligations under this Lease or under the
Condominium Instruments, as applicable, including, but not limited to, any
obligations to provide any services, repairs, replacements, alterations or
decorations or to supply any improvements, equipment or fixtures.

This Lease and Tenant's obligation hereunder shall in no way be affected,
impaired or excused, nor shall Landlord have any claim against Tenant for
damages, because Tenant due to Unavoidable Delays (except any and all monetary
obligations under this Lease), is unable to fulfill any of its obligations
under this Lease or under the Condominium Instruments, as applicable,
including, but not limited to, any obligations to provide any repairs,
replacements, alterations or decorations.

26. ESTOPPEL CERTIFICATES.

Tenant shall, without charge, within fifteen (15) days after receipt of
any request therefor, execute and deliver to Landlord a certificate stating:
(i) whether this Lease is unmodified and in full force and effect (or if there
have been modifications, that the Lease is in full force and effect and
setting forth all such modifications); (ii) whether there then exist any
defenses against

April 15, 1991 29

<PAGE> 31
the enforcement of any right of Landlord hereunder (and, if so, specifying the
same in detail); (iii) the dates to which rent and any other charges hereunder
have been paid by Tenant; (iv) that Tenant has no knowledge of any uncured
defaults under this Lease (or, if Tenant has knowledge of any such defaults,
specifying the same in detail); (v) that Tenant has no knowledge of any event
that will or may result in the termination of this Lease (or if Tenant has
such knowledge, specifying the same in detail); (vi) the address to which
notices to Tenant are to be sent; and (vii) such other information as may be
reasonably requested. It is understood that any such certificate may be
relied upon by Landlord, the Association, any Mortgagee, prospective
Mortgagee, Ground Lessor, prospective Ground Lessor, or purchaser or
prospective purchaser of the Premises or any portion of the Condominium
containing the Premises.

27. COVENANT OF QUIET ENJOYMENT.

Landlord covenants that it has the right to make this Lease
and that, if Tenant shall pay all Rent and perform all of Tenant's other
obligations under this Lease, Tenant shall have the right, during the Term and
subject to the provisions of this Lease, to quietly occupy and enjoy the
Premises without hinderance by Landlord or its successors and assigns.

28. WAIVER OF JURY TRIAL.

Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either of them against the other with respect to
any matter arising out of or connected with this Lease.

29. BROKERS.

Landlord and Tenant each represents and warrants to the other that,
except as hereinafter set forth, neither of them has employed any broker in
procuring or carrying on any negotiations relating to this Lease. Landlord
and Tenant shall indemnify and hold each other harmless from any loss, claim
or damage relating to the breach of the foregoing representation and warranty.
Landlord recognizes only Long and Foster as broker with respect to this Lease
and agrees to be responsible only for the payment of any leasing commissions
owed to said broker.

30. CERTAIN RIGHTS RESERVED BY LANDLORD.

Landlord shall have the following rights, exercisable without
notice, without liability for damage or injury to property, person or business
and without effecting an eviction, constructive or actual, or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for
set-off, abatement of Rent or otherwise:

April 15, 1991 30
<PAGE> 32
A. To change the Condominium's name or street address; provided,
however, that Landlord will endeavor to provide Tenant with prior written
notice of any such changes. In the event Landlord, in its sole discretion,
changes the name or street address of the Condominium then Landlord shall pay
to Tenant the reasonable cost of new stationary and other marketing materials,
including but not limited to brochures, etc., provided said stationary and/or
marketing materials are comparable to the quality Tenant is then using;
however, if any entity other than Landlord (i.e., state and local government)
changes the name and street address of the Condominium, then Landlord shall
bear no responsibility whatsoever to reimburse Tenant for any costs it may
incur as a result thereof.

B. To affix, maintain and remove any and all signs located in the
Condominium; provided, however, that as long as Tenant is not in Default,
Landlord shall not remove any signs previously approved by Landlord pursuant
to the terms of this Lease.

C. To designate and approve, prior to installation, all window shades,
blinds, drapes, awnings, window ventilators, lighting and other similar
equipment to be installed by Tenant that may be visible from the exterior of
the Premises or the Building.

D. To decorate and make repairs, alterations, additions and
improvements, whether structural or otherwise, in, to and about the
Condominium, and for such purposes to enter the Premises, and, during the
continuance of any such work, to close temporarily doors, entry ways and other
portions of the Condominium and to interrupt or temporarily suspend
Condominium services and facilities, all without affecting Tenant's
obligations hereunder, as long as the Premises remain tenantable.

E. To grant to anyone the exclusive right to conduct any business or
render any service in the Condominium, provided Tenant is not thereby excluded
from uses expressly permitted herein.

F. To alter, relocate, reconfigure and reduce the common elements of
the Condominium, as long as the Premises remain reasonably accessible.

G. To erect, use and maintain pipes and conduits in and through the
Premises, so long as the total rentable area of the Premises is not affected
thereby.

H. To exercise its right to vote on matters before the Association and
to exercise any other membership rights provided to a unit owner under the
Condominium Instruments.

April 15, 1991 31
<PAGE> 33
31. NOTICES.

No notice, request, approval, waiver or other communication which may be
or is required or permitted to be given under this Lease shall be effective
unless the same is in writing and hand-delivered, sent by registered or
certified mail, return receipt requested, first-class postage prepaid, or sent
postage prepaid by a reputable air courier service that provides written
notices of delivery, addressed as follows:

If to Landlord:

CROSS CREEK ASSOCIATES LIMITED PARTNERSHIP
c/o JBG PROPERTIES, INC.
1250 Connecticut Avenue, N.W.
Suite 500
Washington, D.C. 20036
Attention: Director of Commercial Management

With a copy to:

David K. Weiss
Weicon, Inc.
973-C Russell Avenue
Gaithersburg, Maryland 20879

If to Tenant:

Prior to the Lease After the Lease
Commencement Date: Commencement Date:

Strayer College, Inc. Strayer College, Inc.
1025 15th St. N.W. 1025 15th St. N.W.
Washington, D.C. 20005 Washington, D.C. 20005
Attention: Ron K. Bailey Attention: Ron K. Bailey
President President

or at any other address of which either party shall notify the other in
accordance with this Section. Such communications, if sent by air courier or
registered or certified mail, shall be deemed to have been given two (2) days
after the date of mailing. If any Mortgagee shall notify Tenant that it is
the holder of a Mortgage affecting the Premises, no notice, request or demand
thereafter sent by Tenant to Landlord shall be effective until a copy of same
shall be sent to such Mortgagee in the manner prescribed in this Section at
such address as such Mortgagee shall designate.

April 15, 1991 32
<PAGE> 34
32. MISCELLANEOUS PROVISIONS.

A. Benefit and Burden: The provisions of this Lease shall be binding
upon, and shall inure to the benefit of, the parties hereto and each of their
respective successors and permitted assigns.

B. Governing Law: This Lease shall be construed and enforced in
accordance with the laws of the jurisdiction in which the Condominium is
located.

C. No Partnership: Nothing contained in this Lease shall be deemed to
create a partnership or joint venture between Landlord and Tenant, or to
create any other relationship between the parties other than that of Landlord
and Tenant.

D. Delegation by Landlord: Wherever Landlord has the authority to take
any action under this Lease, Landlord shall have the right to delegate such
authority to others, and Landlord shall be responsible for the authorized
actions of such agents, employees and others, to the same extent as if
Landlord had taken such action itself.

E. Tenant Responsibility for Agents: In any case where Tenant is
responsible for performing or refraining from an act or for preventing an
action or result from occurring, Tenant shall also be responsible for any
actions taken or omitted by Tenant's agents, employees, business or other
invitees, licensees, contractors, subtenants, family members, guests and any
other individuals or entities present in the Condominium at Tenant's
invitation or as a result of Tenant's occupancy of the Premises.

F. Invalidity of Particular Provisions: If any provision of this Lease
or the application thereof to any person, entity or circumstance shall, to any
extent, be held invalid or unenforceable, the remaining provisions and the
application of such invalid or unenforceable provisions to persons, entities
and circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby. Each provision of this Lease
shall be valid and enforced to the fullest extent permitted by law.

G. Counterparts: This Lease may be executed in several counterparts,
all of which shall constitute one and the same document.

H. Entire Agreement: This Lease, and any exhibits and addenda attached
hereto, embody the entire agreement of the parties hereto, and no
representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Lease or in the exhibits or addenda shall be of
any force or effect. No rights, privileges, easements or licenses are granted
to Tenant hereby, except as expressly set forth herein.

April 15, 1991 33
<PAGE> 35
I. Amendments: This Lease may not be modified in whole or
in part in any manner other than by an agreement in writing.

J. Mortgagee's Performance: Tenant shall accept performance
of any of Landlord's obligations hereunder by any Mortgagee.

K. Limitation on Interest: In any case where this Lease provides for a
rate of interest that is higher than the maximum rate permitted by law, the
rate specified herein shall be deemed to equal, and the party designated as
recipient of such interest shall be entitled to receive, the maximum rate of
interest permitted by law.

L. Remedies Cumulative: All rights and remedies of Landlord shall be
cumulative and shall not be exclusive of any other rights or remedies of
Landlord hereunder or now or hereafter existing at law or in equity.

All rights and remedies of Tenant shall be cumulative and shall not be
exclusive of any other rights or remedies of Tenant hereunder or now or
hereafter existing at law or in equity.

M. Additional Rent: All Additional Rent due and payable under this
Lease shall be due within ten (10) days after demand by Landlord, except as
otherwise expressly provided in this Lease.

N. Survival of Obligation: Tenant's obligation to pay Rent due and
owing upon the termination or expiration of this Lease shall survive
termination or expiration of this Lease.

33. LENDER APPROVAL.

If the Mortgagee fails to give its consent to this Lease, Landlord shall
have the right, at its sole option, to terminate and cancel this Lease. Such
option shall be exercisable by Landlord by written notice to Tenant of such
termination, whereupon this Lease shall be deemed canceled and terminated, and
both Landlord and Tenant shall be relieved of any and all liabilities and
obligations hereunder.

34. SECURITY DEPOSIT.

A. Amount and Uses: Landlord acknowledges receipt from Tenant of
Sixteen Thousand Two Hundred Fifty Dollars ($16,250), to be held by Landlord
as security for the payment of all Rent payable by Tenant and for the faithful
performance by Tenant of all other obligations of Tenant under this Lease.
Said Security Deposit shall be repaid to Tenant after the termination of this
Lease (or any renewal thereof), provided Tenant shall have made all such
payments and performed all such obligations hereunder. Landlord shall not be
required to maintain the Security Deposit in a separate account. Landlord
shall place the Security Deposit in an

April 15, 1991 34
<PAGE> 36
interest-bearing account and all interest earned thereon shall follow the
Security Deposit. The Security Deposit shall not be mortgaged, assigned,
transferred or encumbered by Tenant without the prior written consent of
Landlord, and any such act shall be void. Landlord may, at Landlord's option,
appropriate and apply the entire Security Deposit, or so much thereof as
Landlord believes may be necessary, to compensate Landlord for the payment of
any past-due Rent and for loss or damage sustained by Landlord due to any
Default. In the event Landlord appropriates or applies the Security Deposit
in such a manner, Tenant, within five (5) days after notice thereof, shall pay
to Landlord an amount sufficient to restore the Security Deposit to the
original sum deposited. Tenant's failure to restore any such deficiency shall
constitute a Default hereunder. In the event of bankruptcy or other
debtor-creditor proceedings by or against Tenant, the Security Deposit shall
be applied first to the payment of Rent due Landlord for all periods prior to
the filing of such proceedings.

B. Transferability: In the event of a sale or transfer of Landlord's
interest in the Premises or of the interest of any successor or assign of
Landlord, Landlord (or such successor or assign) shall have the right to
transfer the Security Deposit to any vendee or transferee and shall thereupon
be released automatically from any liability therefor. Tenant shall look
solely to the transferee for the return of the Security Deposit. No Mortgagee
or purchaser of the Premises at any foreclosure proceeding shall (regardless
of whether the Lease is at the time subordinated to the lien of said Mortgage)
be liable to Tenant or any other person for any of such Security Deposit, or
any other payment made by Tenant hereunder, unless Landlord has actually
delivered said deposit or other such sum to such Mortgagee or purchaser. In
the event of any rightful and permitted assignment of Tenant's interest in
this Lease, the Security Deposit shall be deemed to be held by Landlord as a
deposit made by the assignee, and Landlord shall have no liability to the
assignor with respect to the return of the Security Deposit.

35. COMPLIANCE WITH CONDOMINIUM INSTRUMENTS.

Notwithstanding any provisions herein which expressly subject Tenant to
particular provisions in the Condominium Instruments or which refer to
particular provisions in such Condominium Instruments or particular rights of
the Association, Tenant's right to use and occupy the Premises shall be
subject and subordinate in all respects to each and every provision of the
Condominium Instruments. Failure to comply with the provisions of the
Condominium Instruments shall constitute a default under this Lease. This
Lease grants Tenant a leasehold estate in the Premises for the Term specified
together with a license granting Tenant, for such Term, Landlord's rights to
use the common elements and common facilities of the Condominium, provided
that Tenant and Tenant's family members, guests, contractors, subtenants,
permittees, licensees,

April 15, 1991 35
<PAGE> 37
employees, business and other invitees and agents exercise such license in
accordance with the provisions of the Condominium Instruments; provided,
however, that Landlord retains all membership rights in the Association
including, without limitation, the right to vote. Tenant shall indemnify and
hold harmless Landlord from and against any damages, loss, costs, claims,
liabilities and expenses, direct or indirect, incurred by Landlord as a result
of the noncompliance by any of the aforesaid persons with the provisions of
any of the Condominium Instruments or any other covenant of this Lease.
References to the Association contained herein are not intended to expand any
rights of the Association established pursuant to the Condominium Instruments.
In the event of a conflict between the Lease and the Condominium Instruments,
the Condominium Instruments shall control.

36. TERMINATION OF CONDOMINIUM.

In the event the Association terminates the Condominium, Landlord shall
have the right to present and Tenant shall have the obligation to enter into a
Lease for the Premises for the remainder of the Term, the provisions of which
shall be identical to the provisions of this Lease, except that provisions in
the new lease shall be modified solely to reflect that the Premises are not
part of a Condominium. (For example, the new lease would be revised to reflect
that Additional Rent would include the Tenant's share of certain operating
costs rather than Common Expenses.)

37. HAZARDOUS MATERIALS.

A. Except for those materials that are necessary in the normal course
of Tenant's business activities on the Premises, Tenant, its agents,
employees, contractors or invitees shall not cause or permit any Hazardous
Materials, as hereinafter defined, to be brought upon, stored, used or
disposed on, in or about the Premises.

B. Any Hazardous Material permitted on the Premises, all containers
therefor and all materials that have been contaminated with such Hazardous
Materials shall be used, kept, stored and disposed of in a manner that
complies with all applicable federal, state and local laws, ordinances,
regulations and standards. Without limiting the generality of the foregoing,
Tenant shall be solely responsible for the preparation and submittal of any
reports, data and information required by any law, ordinance, regulation or
standard in connection with the use, storage or disposal of Hazardous Material
on the Premises.

C. Tenant shall not cause or permit the release, discharge, spill or
emission of any substance from, into or onto the Premises, whether or not such
substance is defined as a Hazardous Material herein, if such substance:

April 15, 1991 36
<PAGE> 38
(i) causes or is likely to cause the pollution or contamination
of the Premises or of air, surface water, groundwater or soil;

(ii) causes or is likely to cause the impairment or contamination
of any sewer, sewage treatment system or components thereof;

(iii) poses an actual or potential hazard to the health or safety
of persons on the Premises or elsewhere; or

(iv) impairs the condition, use or enjoyment of the Premises, the
Building or any other real or personal property.

D. As used herein, the term "Hazardous Material" means:

(i) any "hazardous substance" as the same is defined pursuant to
42 U.S.C. Section 9601(14) and subsequent amendments or enactments thereto;

(ii) oil, petroleum products and their by-products, including,
without limitation, waste petroleum and petroleum sludges; or

(iii) any hazardous chemical for which the submittal of Material
Safety Data Sheet or list is required pursuant to 42 U.S.C. Section 11021 and
subsequent amendments or enactments thereto.

E. Tenant hereby agrees that it shall be fully liable for all costs,
expenses and damages related to or arising from the use, storage and disposal
of any Hazardous Material brought on to the Premises by Tenant. Tenant shall
give immediate notice to Landlord of any violation or potential violation of
the provisions of this Section. Tenant shall defend, indemnify and hold
harmless Landlord and its agents from and against any claims, demands,
administrative orders, judicial orders, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation,
attorney and consultant fees, court costs and litigation expenses) of whatever
kind or nature, known or unknown, contingent or otherwise, arising out of or
any way related to the use, storage, disposal, release, discharge, spill or
emission of any Hazardous Material by Tenant, its agents, employees,
contractors or invitees. The provisions of this Section shall be in addition
to any other obligations and liabilities Tenant may have to Landlord at law or
in equity and shall survive the transactions contemplated herein or any
termination of this Lease.

As of the date hereof, and to the best of Landlord's knowledge, no
Hazardous Materials, as defined herein, exists in/on the Premises, the
Condominium, or the Property, and Landlord shall use its reasonable efforts to
keep the Premises, the Condominium and the Property free of Hazardous
Materials during the Term.

April 15, 1991 37
<PAGE> 39
38. RIDERS.

The terms and provisions of Rider No. 1 attached hereto are hereby
incorporated herein by reference.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.

WITNESS: LANDLORD:

CROSS CREEK ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership

/s/ PAULA J. WELLINGTON By: /s/ [sig]
- -------------------------- -----------------------------
WITNESS: TENANT:

STRAYER COLLEGE, a Maryland
corporation

/s/ [sig] By: /s/ [sig]
- -------------------------- -----------------------------

April 15, 1991 38

<PAGE> 1
EXHIBIT 10.07
LEASE BINDER

LANDLORD: GLM-Highland Building Limited Partnership, a Virginia
Limited Partnership

TENANT: Strayer College, Inc., a Maryland corporation

PROPERTY: An office building located at 903 South Highland Street,
Arlington, Virginia

1. Agreement of Lease between Landlord and Tenant, dated October 1, 1991,
together with the following exhibits:

Exhibit A: Outline of Premises
Exhibit B: Tenant and Building Alterations
Exhibit C: Rules and Regulations

2. Non-Disturbance and Attornment Agreement, dated as of December 27,
1991, between Tenant and General Electric Capital Corporation.
<PAGE> 2
HIGHLAND OFFICE BUILDING

LEASE AGREEMENT
BETWEEN

GLM-Highland Office Building Associates, L.P.

GLM Development Corporation, G.P.

Landlord

AND

Strayer College, Inc. , Tenant

DATED: October 1, 1991

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE PAGE
------- ----
<S> <C> <C>
1. Premises; Remeasurement; Proportionate Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Cost of Living Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Use of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Assignment and Subletting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. Maintenance of the Building and Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Refurbishment of Premises; Tenant Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. Signs; Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Tenant's Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. Services and Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14. Liability of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. Rules and Regulations; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16. Damage; Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
19. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
20. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
21. Covenants of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
22. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
23. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
24. Consent of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
25. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
26. Options to Extend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
27. Landlord's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>

Exhibit A (Outline of Premises)
Exhibit B (Tenant and Building Alterations)
Exhibit C (Rules and Regulations)
<PAGE> 3

AGREEMENT OF LEASE

THIS AGREEMENT OF LEASE ("Lease") is made this 1 day of October, 1991, by
(i) GLM-HIGHLAND BUILDING LIMITED PARTNERSHIP, a Virginia limited partnership
(hereinafter referred to as "Landlord"), and (ii) STRAYER COLLEGE, INC. , a
Maryland corporation (hereinafter referred to as "Tenant").

RECITALS

A. Landlord is the owner of (i) an office building located at 901 South
Highland Street, Arlington, Virginia (hereinafter referred to as "901
Building"), (ii) an office building located at 903 South Highland Street,
Arlington, Virginia (hereinafter referred to as "903 Building"), and (iii) a
common parking garage (hereinafter referred to as the "Garage") consisting of
eight (8) parking levels and attached to the 901 Building. The 901 Building,
903 Building and Garage are hereinafter collectively referred to as the
"Building".

B. Tenant desires to lease space in the 903 Building, and Landlord is
willing to lease Tenant space in the 903 Building, upon the terms, conditions,
covenants and agreements set forth herein.

NOW, THEREFORE, the parties hereto, intending legally to be bound, hereby
covenant and agree as set forth below.

1. Premises; Remeasurement; Proportionate Share

A. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the term and upon the terms, conditions, covenants and agreements
hereinafter provided, the premises (the "Premises") shown on the attached
Exhibit A. The Premises consist of a portion of the first floor and all of the
second, third and fourth floors of the 903 Building. The Premises contain
26,500 rentable square feet (the "Rentable Area"). The lease of the Premises
includes the right, together with other tenants of the Building and their
invitees, to use the common public areas of the Building, but includes no other
rights not specifically set forth herein.

B. Prior to the Lease Commencement Date, Landlord's architect shall
certify to Tenant the rentable area contained in the Building and the Premises
as determined in accordance with the standard method of measurement of the
Washington D.C. Association of Realtors (formerly, Washington Board of
Realtors). If either the Rentable Area or the rentable area of the Building is
misstated in this Lease, the parties, by letter agreement, shall restate
correctly the Rentable Area and the rentable area of the Building and, if
necessary, reestablish any "Basic Rent" (as defined in Section 3 below) or
additional rent calculated using such rentable areas.

C. Tenant's "Proportionate Share" shall be an amount equal to the
Rentable Area divided by the rentable square feet contained in the Building, as
certified by Landlord's architect. If the Rentable Area or the rentable area
of the Building changes during the Term, following Tenant's receipt of a
certificate from
<PAGE> 4
Landlord's architect as to such change, the parties shall execute a letter
agreement reestablishing the Basic Rent and Tenant's Proportionate Share.

2. Term

A. Except as provided in Section 26, the term of this Lease (hereinafter
referred to as the "Term") shall be for a period commencing on April 1, 1992
(the "Lease Commencement Date") and expiring at midnight on March 31, 2002 (the
"Lease Expiration Date").

B. The first "Lease Year" during the Term shall be the period commencing
on the Lease Commencement Date and ending on the last day of the month that
completes twelve (12) full calendar months after the Lease Commencement Date.
Each subsequent "Lease Year" shall commence on the day immediately following
the last day of the preceding Lease Year and shall continue for a period of
twelve (12) full calendar months.

3. Rent

A. Tenant shall pay, as rent for the Premises, the following amounts
(each of which amounts shall be considered "Rent" and all of which, unless the
context requires otherwise, are collectively referred to herein as "Rent"):

(i) Basic Rent

(a) Basic Rent for each Lease Year shall be an amount
equal to the product obtained by multiplying the Rentable Area by the "Rent per
Square Foot" (as hereinafter defined) for such Lease Year. The Rent per Square
Foot for the first Lease Year shall be Thirteen and 50/100 Dollars ($13.50).
For each Lease Year thereafter during the Term, the Rent per Square Foot shall
be an amount equal to one hundred two percent (102%) of the Rent per Square
Foot for the immediately preceding Lease Year.

(b) Basic Rent shall be paid, in advance, on or before
the first day of each month during the Term. Basic Rent shall be made payable
to Landlord at the office of Landlord, or such other party or at such other
address as Landlord may designate from time to time by written notice to
Tenant. If the Lease Commencement Date is a date other than the first day of a
month, Basic Rent from the Lease Commencement Date until the first day of the
following month shall be prorated at the rate of one thirtieth (1/30th) of the
monthly installment of Basic Rent for each day.

(ii) Increases in Real Estate Taxes

(a) Commencing January 1, 1993, Tenant, for each tax year
or part thereof that coincides with the Term, shall pay to Landlord, as
additional rent, Tenant's Proportionate Share of any increase in "Real Estate
Taxes" (as hereinafter defined) for such tax year over the Real Estate Taxes
for the "Base Tax Year" (as defined below). For the purposes of this Section
3.A(ii) the term "Base Tax Year" is hereby defined to mean calendar year

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<PAGE> 5
1992, and the term "Real Estate Taxes" for each tax year is hereby defined to
mean the total amount of all taxes and assessments, general and special,
ordinary and extraordinary, foreseen and unforeseen, now or hereafter assessed,
levied or imposed upon the Building and the land on which the Building is
situated (the "Land") for such year, together with any tax in the nature of
real estate tax, any ad valorem tax or any tax on Rent imposed in lieu of or in
addition to real estate taxes and assessments, and any taxes and assessments
that may hereafter be substituted for Real Estate Taxes. "Real Estate Taxes"
shall not include any gift, inheritance, estate, income, net profit, franchise,
corporate, capital gains, income or unincorporated business tax or levy, or any
recordation or transfer tax payable in connection with the transfer of the
Building or any part thereof or any financing secured by the Building or any
part thereof.

(b) In the event that the method currently used by
Arlington County for the computation of the assessed market value of the
Building and/or the Land is discontinued or revised, the determination of the
increase in Real Estate Taxes under this Section 3.A(ii) shall thereafter be
made according to a formula and procedure that most nearly approximates the
method of determination hereinabove set forth.

(c) Commencing with the second Lease Year, Landlord shall
submit to Tenant a statement of Landlord's good faith estimate and a
description of how said estimate is determined, of the increase in the Real
Estate Taxes for the current tax year over the Real Estate Taxes for the Base
Tax Year, and within thirty (30) days after delivery of such statement, Tenant
shall begin paying to Landlord, as additional rent, due and payable on the
first day of each month, an amount equal to one-twelfth (1/12th) of the amount
determined to be Tenant's Proportionate Share of such increase in Real Estate
Taxes. Within ninety (90) days after the expiration of each tax year in which
Tenant's Proportionate Share of Real Estate Taxes is increased pursuant to this
Section 3.A(ii), Landlord shall submit a statement showing the determination of
the total increase in Real Estate Taxes for such tax year over the Base Tax
Year and Tenant's Proportionate Share of such increase. Landlord shall also
supply at this time a copy of real estate tax bills. If such statement shows
that Tenant's monthly payments pursuant to this Section 3.A(ii) exceeded
Tenant's share of the actual increase in Real Estate Taxes for the preceding
tax year, then Tenant may deduct such overpayment from its next payment or
payments of monthly rent. If such statement shows that Tenant's share of the
actual increase in Real Estate Taxes exceeded Tenant's monthly payments for the
preceding tax year, then Tenant shall pay the total amount of such deficiency
to Landlord with the next payment of Tenant's Proportionate Share of Real
Estate Taxes payable hereunder after receipt of the statement.

(d) Since the Lease Year in which Tenant's obligation to
pay Real Estate Taxes begins and the last Lease Year of the Term, as the same
may be extended pursuant to Section 26, will not coincide with the tax year,
Tenant's Proportionate Share of Real Estate Taxes during such Lease Years shall
be determined by calculating Tenant's Proportionate Share for the full tax year
then multiplying the resulting amount by a

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<PAGE> 6
fraction, the numerator of which shall be the number of days in the tax years
that coincide with such Lease Years, and the denominator of which shall be 365.
Following the end of the tax year in which the Term expires, Landlord shall
render a statement as provided under this Section 3.A(ii)(d). If Tenant's
payment as aforesaid was less than the amount shown in such statement, Tenant
shall pay to Landlord within thirty (30) days after demand therefor, the
difference between the amount previously paid and the amount shown in such
statement. If Tenant's previous payment exceeded the amount shown in such
statement, Landlord shall promptly refund to Tenant such excess payment.

(iii) Increase in Operating Charges

(a) Commencing January 1, 1993, Tenant shall pay
Landlord, as additional rent, Tenant's Proportionate Share of "Operating
Increases" (as hereinafter defined) for each calendar year during the Term.
As used in this Lease, "Operating Increases" shall mean the difference between
the "Operating Charges" (as defined in the next sentence) for a particular
calendar year during the Term (starting with calendar year 1993) and the
Operating Charges for the first Lease Year (the "Base Year"). The "Operating
Charges" for the Base Year or any calendar year are hereby defined as the sum
of the following reasonable costs and expenses for the Building: (i) gas,
electricity, water, sewer, and other utility charges (including surcharges) of
whatever nature, (ii) insurance premiums, (iii) Building personnel costs,
including, but not limited to, salaries, wages, fringe benefits and other
direct and indirect costs of engineers, superintendents, watchmen, porters and
any other Building personnel below the grade of property manager, (iv) costs of
service and maintenance contracts for Building equipment, including, but not
limited to, chillers, boilers, controls, elevators, mail chute, windows,
security services, and management fees, (v) any other costs and expenses (other
than items that are capital improvements) incurred by Landlord in operating the
Building, and (vi) the cost of any additional services not provided to the
Building at the Lease Commencement Date but thereafter provided by Landlord in
the prudent management of the Building. The management fee referred to in the
preceding sentence shall be limited to four percent (4%) of the gross basic
rent actually received from tenants in the Building during each calendar year.
If any equipment used at the Building or services rendered at the Building are
also used or rendered at other properties owned or managed by Landlord, the
cost of such equipment and services shall be equitably apportioned among such
properties and only the portion attributable to the Building shall be included
within Operating Charges. Operating Charges shall not include (i) principal or
interest payments on any mortgages, (ii) ground rent, (iii) leasing
commissions, (iv) advertising or promotional expenses incurred to publicize the
Building for leasing purposes, (v) deductions for depreciation or amortization
of the Building or any part thereof, (vi) capital improvements to the Building
(except that, to the extent such improvements result in savings in the
Operating Charges, the resulting savings shall be included in Operating
Charges), (vii) costs and expenses paid directly by Tenant or any other tenant
of the Building or reimbursable to Landlord under any warranty, lease,
contract, or insurance policy, (viii) legal fees incurred in connection with
negotiating

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<PAGE> 7
or drafting leases or enforcing Landlord's rights thereunder, (ix) accounting
fees other than fees incurred in connection with preparing an annual budget and
conducting an annual audit, (x) late charges imposed on Landlord or its
management company, (xi) the cost of char or other cleaning services other than
services provided to the common areas of the Building, (xii) overhead and
profit increments, including any fees (other than the management fee provided
for above) paid to an individual or entity related to Landlord for services to
the Building if such fees exceed the fair market cost of the services rendered,
(xiii) general administrative expenses that would not be chargeable to
operating expenses of the Building in accordance with generally accepted
accounting principles, (xiv) the cost of services that are not available to
Tenant without additional charge but that are provided to other tenants or
occupants, or (xv) costs, fines or penalties incurred in connection with any
violation of any law or regulation applicable to the Building, including,
without limitation, the cost of correcting any present violation and of
complying with future laws or regulations relating to the life safety systems
and handicapped access features of the Building or concerning asbestos or
hazardous or toxic waste or materials.

(b) In the event that, for any calendar year during the
Term, the average occupancy rate of the Building is less than ninety-five
percent (95%), then, for purposes of calculating Operating Increases, the
Operating Expenses for such calendar year shall be increased by the additional
costs and expenses that Landlord reasonably estimates would have been incurred
if during such calendar year the average occupancy rate had been ninety-five
percent (95%). It is not the intent of this provision, commonly referred to as
a "gross up" clause, to permit Landlord to charge Tenant for any Operating
Expenses attributable to unoccupied space, or to seek reimbursement from Tenant
for costs the Landlord never incurred. Rather, the intent of this provision is
to allow Landlord to recover only those increases in Operating Expenses
properly attributable to the occupied space in the Building, and this provision
is thus designed to calculate the actual cost of providing variable Operating
Expense services (i.e., Operating Expenses that are affected by variations in
occupancy levels, such as utility service) to the rentable area of the Building
receiving such service.

(c) Landlord represents to Tenant that, as of October 1,
1991, approximately eleven percent (11%) of the Building is leased or set aside
for leasing to retail tenants and that such tenants are currently treated as
office tenants for purposes of calculating operating expense increases. If,
during the Term, the portion of the Building rented for retail use exceeds
eleven percent (11%) of the Building, Landlord shall separately meter the
portion of the Building rented for retail use that exceeds eleven (11) percent
of the Building.

(d) Commencing January 1, 1993, Landlord shall submit to
Tenant a statement of Landlord's estimate, determined in good faith, of the
increase of the Operating Charges, and within thirty (30) days after the
delivery of such statement, Tenant shall begin paying to Landlord, as
additional rent, due and payable on the first day of each month, an amount
equal to one-twelfth (1/12th) of the amount determined to be Tenant's

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<PAGE> 8
Proportionate Share of the increase in the Operating Charges. Landlord's
statement shall include a description of how such estimate was determined. On
or before March 31, 1994, and on or before every March 31st thereafter during
the Term, Landlord shall submit a statement showing the determination of the
Operating Charges for the immediately preceding calendar year and Tenant's
Proportionate Share of Operating Increases. If such statement shows that
Tenant's monthly payments pursuant to this Section 3.A(iii) exceeded Tenant's
Proportionate Share of the actual Operating Increases for the preceding
calendar year, then Tenant may deduct such overpayment from its next payment or
payments of Basic Rent and additional rent. If such statement shows that
Tenant's share of the actual increase in Operating Charges exceeded Tenant's
monthly payments for the preceding calendar year, then Tenant shall pay the
total amount of such deficiency to Landlord with the next payment of Tenant's
Proportionate Share of Operating Increases due after receipt of the statement.

(e) Tenant shall have the right, upon ten (10) days
written' notice to Landlord, to inspect and examine the books, records and
computations of Landlord relative to the Operating Increases. Landlord shall
retain such books, records and computations for at least two (2) years
following the period to which they relate. If any such examination uncovers an
overstatement of Tenant's Proportionate Share of Operating Increases, Landlord
shall promptly refund such overstatement. If the overstatement exceeds five
percent (5%) of Tenant's Proportionate Share of Operating Increases, Landlord
shall reimburse Tenant for the reasonable cost of Tenant's examination.

(f) Since the Lease Year in which Tenant's obligation to
pay Operating Increases begins and the last Lease Year of the Term, as it may
be extended pursuant to Section 26, will not coincide with the calendar year,
Operating Increases to be paid by Tenant during such Lease Years shall be
determined by calculating Tenant's Proportionate Share for the full calendar
year then multiplying the resulting amount by a fraction, the numerator of
which shall be the number of days in the calendar years that coincide with such
Lease Years, and the denominator of which shall be 365. Within ninety (90) days
after the end of the calendar year in which the Term expires, Landlord shall
render a statement to Tenant as provided in this Section 3.A(iii). If Tenant's
payment as aforesaid was less than the amount shown in such statement, Tenant
shall pay to Landlord within thirty (30) days after demand therefor, the
difference between the amount previously paid and the amount shown in such
statement. If Tenant's previous payment exceeded the amount shown in such
statement, Landlord shall promptly refund to Tenant such excess payment.

B . Rent shall be paid to Landlord without demand and without deduction,
set-off or counterclaim on the first (1st) day of each month during the Term.
If Landlord shall at any time or times accept Rent after it shall become due
and payable, such acceptance shall not excuse a delay upon subsequent
occasions, or constitute, or be construed as, a waiver of any or all of
Landlord's rights hereunder.

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<PAGE> 9
4. Cost of Living Adjustment

[INTENTIONALLY DELETED.]

5. Use of Premises

Tenant will use and occupy the Premises solely for a college, including a
book store and a student lounge, and for the administrative, storage and other
operational needs of such college, and for general office and business uses,
all in accordance with the uses permitted under applicable zoning and other
municipal regulations. Without the prior written consent of Landlord, the
Premises will not be used for any other purpose. Tenant will not use or occupy
the Premises for any unlawful purpose and will comply with all present and
future laws, ordinances, regulations and orders of the United States of
America, any state, county, and local authority, and any other public or
quasi-public authority having jurisdiction over the Premises. Landlord shall
obtain the initial certificate of occupancy for the Premises prior to the Lease
Commencement Date. Tenant shall cooperate with Landlord as necessary to obtain
the certificate of occupancy. Tenant represents and warrants to Landlord that
Tenant has entered into this Lease entirely for the use set forth in this
Section 5 and that it shall not use the Premises for any residential purpose.

6. Assignment and Subletting

A. Landlord's Prior Consent Required

(i) Tenant and Tenant's representatives, successors and assigns will
not directly or indirectly assign, transfer, mortgage or otherwise encumber
this Lease or sublet or lease (or permit the occupancy or use of) the Premises,
or any part thereof, without obtaining the prior written consent of Landlord.
Except as set forth in this Section 6, no assignment or transfer of this Lease
or the right of occupancy hereunder may be effected by operation of law or
otherwise without the prior written consent of Landlord. The transfer of a
majority of the issued and outstanding capital stock of any corporate tenant of
this Lease or a majority of the total interest in any partnership tenant,
however accomplished and whether in a single transaction or in a series of
related or unrelated transactions, shall be deemed an assignment of this Lease.

(ii) Notwithstanding anything to the contrary set forth in the
preceding paragraph, provided Tenant remains liable under this Lease, without
Landlord's consent (A) Tenant may assign this Lease to a subsidiary of Tenant
or in connection with a merger, consolidation or the sale of all or
substantially all of Tenant's assets, or (B) Ron K. Bailey may assign all or
any portion of its interest in Tenant to the members of his immediate family or
to a trust for his benefit or the benefit of one or more members of his
immediate family.

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<PAGE> 10
B. Qualifications of Subtenant.

(i) Subject to the provisions of Section 6.A hereof, Landlord shall
not unreasonably withhold or delay its consent hereunder to any sublease by
Tenant, provided that all of the following conditions are met:

(a) Tenant must first notify Landlord, in writing, of any
proposed sublease, at least fifteen (15) days prior to the effective date of
such proposed sublease. The notice to Landlord must include a copy of the
proposed sublease and a copy of the proposed subtenant's most recent financial
statement, if available;

(b) The subtenant must have a credit rating reasonably
satisfactory to Landlord;

(c) The proposed use of the Premises must not, in
Landlord's reasonable opinion, conflict with the reputation of the Building on
the effective date of the sublease; and

(d) The sublease must (1) be expressly subject and
subordinate to this Lease, (2) require that any subtenant must comply with and
abide by all of the terms of this Lease, and (3) provide that any termination
of this Lease shall extinguish the sublease.

C. Landlord's Right of First Refusal.

[INTENTIONALLY DELETED.]

D. No Waiver or Release

The consent by Landlord to any assignment or subletting shall not be
construed as a waiver or release of Tenant from its obligations under this
Lease or as relieving Tenant from obtaining the consent in writing of Landlord
to any further assignment or subletting. The acceptance of rent from any
assignee or subtenant shall not constitute a waiver or release of Tenant from
its obligations under this Lease.

7. Maintenance of the Building and Premises

A. Obligations of Landlord and Tenant

(i) Landlord shall repair, maintain, clean, replace and redecorate
as necessary the exterior and interior of the Building (other than the interior
of the Premises) and all building systems (including the systems serving the
Premises) so that the exterior and interior of the Building (including the
common areas of the Building) are clean and in good order and repair at all
times during the Term. Landlord shall also maintain all structural walls,
columns or other structural components located in the Premises. All repairs,
maintenance, replacements and redecorating required by Landlord shall be
undertaken as soon as commercially reasonable after Landlord is aware of the
need for such repair, maintenance, replacement or redecoration and shall
thereafter be diligently prosecuted to

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<PAGE> 11
completion. Nothing contained in the preceding sentence shall make Landlord's
obligations to maintain the Building contingent on Tenant informing Landlord of
the need for repairs, maintenance, replacements or redecoration.

(ii) Subject to Section 7.A(i) above, Tenant will keep the interior
of the Premises and the fixtures and equipment therein in good order and repair
and shall suffer neither waste nor injury thereto. At the expiration or other
termination of the Term, Tenant shall surrender the Premises broom-clean and in
good order and repair, ordinary wear and tear excepted.

B. Damage to Premises or Building

If the Premises or the Building is damaged by the negligent act or
willful misconduct of Tenant, or its agents, contractors, invitees, or
licensees, Tenant, following written notice from Landlord, shall repair such
damage at its expense. If Tenant has not repaired such damage after notice as
set forth in the preceding sentence and the expiration of such time as is
reasonable under the circumstances, Landlord may repair such damage and seek
reimbursement from Tenant for its reasonable costs incurred in repairing such
damage. Notwithstanding the foregoing, if the damage caused by Tenant is
covered by insurance that Landlord carries or is required to carry under this
Lease, Landlord shall not seek reimbursement from Tenant with respect to such
damage.

C. Notice of Defective Condition

Tenant shall give Landlord prompt notice if any plumbing or heating
system or any electrical line located in, servicing or passing through the
Premises needs repairing or replacing, provided Tenant, but not Landlord, has
actual knowledge of the need for a repair or replacement. Nothing contained in
the preceding sentence shall make Landlord's obligation to repair or replace
such system or line contingent on Tenant informing Landlord of the need for
repairs or replacements. Following such notice, Landlord shall make the repair
or replacement with due diligence. Except as specifically provided in this
Lease, there shall be no allowance to Tenant for a diminution of rental value
and no liability on the part of Landlord by reason of inconvenience, annoyance
or injury to business arising from Landlord making or failing to make any
repairs, alterations, additions, or improvements in or to the Building or the
Premises or in or to the fixtures, appurtenances or equipment thereof.

D. Tenant's Rights re Interrupted Services

If Landlord fails to perform any maintenance or to make any repair or
replacement that Landlord is required to perform or make under this Section 7
and such failure deprives Tenant of the use of all or any portion of the
Premises for three (3) or more consecutive days, then, from the date Tenant is
unable to use all or a portion of the Premises until such time as the entire
Premises are available for Tenant's use, Rent shall be abated by the percentage
of the Premises that Tenant is unable to use as a result of such failure.

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<PAGE> 12
8. Refurbishment of Premises; Tenant Alterations

A. Refurbishment of Premises

Prior to the Lease Commencement Date, Landlord shall perform the work
described on the attached Exhibit B to Tenant's reasonable satisfaction. Since
the refurbishment of the Building will take place after this Lease is fully
executed and before the Lease Commencement Date, and Tenant, under its current
lease with Landlord, will be operating its business at the Premises during such
time, Landlord shall use reasonable commercial efforts not to disrupt Tenant's
operations at the Premises during the refurbishment of the Building.

B. Tenant Allowance

Upon execution of this Lease, Landlord will provide Tenant with the cash
allowance described on Exhibit B.

C. Alterations

(i) Except as set forth herein, Tenant will not make or permit
anyone to make any alterations, fixed decorations, additions or improvements,
structural or otherwise, to the Premises, including, but not limited to,
wall-to-wall or attached carpeting, attached light fixtures, computer
air-conditioning equipment and flooring, kitchen equipment attached to the
plumbing of the Building or showers (hereinafter referred to as the
"Alterations"), in or to the Premises or the Building, without the prior
written consent of Landlord. Notwithstanding anything to the contrary
contained in the preceding sentence, Tenant, without Landlord's consent, may
make interior, nonstructural Alterations costing no more than Fifty Thousand
and No/100 Dollars ($50,000.00) in any one instance. All such Alterations must
conform to all rules and regulations established from time to time by the
Underwriters Association of Arlington, Virginia and to all applicable
requirements of the federal, Commonwealth of Virginia and Arlington County
governments. Tenant shall obtain lien waivers from the suppliers of all
materials or services performed or supplied in connection with the Alterations.

(ii) If any mechanics' or materialmen's lien is filed against the
Premises, the Building and/or the Land, for work claimed to have been done for,
or materials claimed to have been furnished to, Tenant, within twenty (20) days
thereafter, at Tenant's sole cost and expense, such lien shall be discharged or
a bond posted with respect thereto. If Tenant shall fail to discharge or bond
against any such mechanics' or materialmen's lien within twenty (20) days,
Landlord may, at its option, discharge the same and treat the cost thereof as
additional rent, payable with the monthly installment of Rent next becoming
due. It is understood and agreed that in the event Landlord shall give its
written consent to Tenant's making any such Alterations, such written consent
shall not be deemed to be an agreement or consent by Landlord to subject
Landlord's interest in the Premises, the Building or the Land to any mechanics'
or materialmen's liens that may be filed in respect of any such Alterations
made by or on behalf of Tenant.

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<PAGE> 13
C. Indemnification

Tenant will indemnify and hold Landlord harmless from and against any
and all expenses, liens, claims or damages to person or property that may arise
directly or indirectly by reason of the making of any such Alterations. If any
such Alteration is made without the prior written consent of Landlord, except
as provided in Section 8.B above, Landlord may correct or remove the same and
Tenant shall be liable for any and all reasonable expenses incurred by Landlord
in the performance of this work. All Alterations in or to the Premises or the
Building made by either party shall immediately become the property of Landlord
and shall remain upon and be surrendered with the Premises at the end of the
Term in good order and repair, ordinary wear and tear excepted. If such
property of Tenant is not removed by Tenant within three (3) days after the
termination of this Lease, the same shall become the property of Landlord and
shall be surrendered with the Premises as part thereof.

9. Signs; Furnishings

A. Signs

Tenant shall maintain Tenant's existing sign on the exterior of the
building in good order and repair. If Tenant determines from time to time
during the Term that its exterior sign should be replaced, Tenant may replace
the sign at Tenant's expense with Landlord's prior approval, which approval
shall not be unreasonably withheld. If any sign, advertisement or notice which
can be seen outside of the Premises (other than the exterior sign) is exhibited
by Tenant, without Landlord's consent, Landlord shall have the right to remove
the same and Tenant shall be liable for any and all reasonable expenses
incurred by Landlord in said removal.

B. Furnishings

Any and all damage or injury to the Premises or the Building caused
by moving the property of Tenant into, in or out of the Premises, shall be
repaired by and at the sole cost of Tenant. Tenant agrees promptly to remove
from the sidewalks adjacent to the Building any of Tenant's furniture,
equipment or other material there delivered or deposited.

10. Tenant's Equipment

Landlord hereby approves Tenant's existing electrical equipment and
machinery. Tenant shall not install or operate in the Premises any
electrically-operated equipment or machinery (other than electric typewriters,
word processors, computers and ancillary equipment, telecopiers,
residential-sized refrigerators, microwaves, vending machines, adding machines,
radios, televisions, clocks, copying machines and recording equipment) of any
kind or nature whatsoever that will or may reasonably be anticipated to
necessitate any changes, replacements or additions to, or in the use of, the
water system, heating system, plumbing system, air-conditioning system, or

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<PAGE> 14
electrical system of the Premises or the Building without first obtaining the
prior written consent of Landlord. If Tenant installs any business machine or
mechanical equipment that causes excessive noise or vibration to be transmitted
to the structure of the Building or to any space therein to such a degree as to
be reasonably objectionable to any tenant in the Building, Tenant, at Tenant's
expense, shall take commercially reasonable steps to reduce such vibration or
noise.

11. Inspection

Provided Landlord has given Tenant reasonable advance notice (except in an
emergency when notice will not be required), Tenant will permit Landlord, or
its agents or other representatives, to enter the Premises, without charge
therefor to Landlord and without diminution of the Rent payable by Tenant, to
examine, inspect and protect the Premises and the 903 Building and to make such
reasonable repairs as Landlord is required to make under this Lease, or to
exhibit the same to prospective tenants during the last one hundred eighty
(180) days of the Term. Any inspection under this Section that is not an
emergency shall be during Tenant's ordinary business hours, Monday through
Friday, 9:00 a.m.- 6:00 p.m. Landlord shall use reasonable commercial efforts
to minimize any disruption to Tenant's operations caused by Landlord's presence
in the Premises.

12. Insurance

A. Insurance Rating

Tenant will not conduct or permit to be conducted, any activity, or
place any equipment in or about the Premises or the Building that may
reasonably be expected to invalidate the insurance coverage in effect or
increase the rate of fire insurance or other hazard insurance on the Building.
If any invalidation of coverage or increase in the rate of "all risk" insurance
is stated by Landlord's insurance company to be due to any activity or
equipment of Tenant in or about the Premises or the Building, such statement
shall be conclusive evidence that the increase in such rate is due to such
activity or equipment and, as a result thereof, Tenant shall be liable for such
increase and shall reimburse Landlord thereof upon demand and any such sum
shall be considered additional rent payable with the monthly installment of
Rent next becoming due. Landlord represents and warrants to Tenant that the
use of the Premises set forth in Section 5 above will not invalidate Landlords'
insurance or increase Landlord's insurance premiums.

B. Required Insurance

(i) Tenant shall carry commercial general liability insurance in a
company or companies licensed to do business in the Commonwealth of Virginia
and reasonably approved by Landlord. Said insurance shall be in the amount of
One Million and No/100 Dollars ($1,000,000.00) and shall name Landlord as an
additional insured, as its interest may appear. Landlord shall carry "all
risk" insurance insuring the full replacement value of the Building (excluding
excavations and foundations). If

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<PAGE> 15
required by Landlord, receipts evidencing payment for said insurance shall be
delivered to Landlord at least annually by Tenant and each policy shall contain
an endorsement that will prohibit its cancellation prior to the expiration of
fifteen (15) days after notice of such proposed cancellation to Landlord.

(ii) Notwithstanding anything to the contrary set forth elsewhere in
this Lease, neither party shall be liable to the other or to any insurer (by
way of subrogation or otherwise) for any loss or damage, even though such loss
or damage may have been occasioned by the negligence of such party, if such
loss was covered by an insurance policy containing an endorsement to the effect
that any such release by the insured shall not adversely affect the insured's
right to recover for such loss, and that the insurer waives its right of
subrogation.

13. Services and Utilities

A. Landlord will furnish air-conditioning during the season of the year
when air-conditioning is reasonably required and heat during the season of the
year when heat is reasonably necessary sufficient (together, "HVAC") to meet
Tenant's reasonable needs. Landlord will provide Tenant HVAC so that the
temperature in the Premises does not exceed seventy-five degrees (75 degrees)
Fahrenheit with fifty percent (50%) relative humidity in the summer and is not
lower than sixty-eight degrees (68 degrees) Fahrenheit in the winter during
Tenant's hours of operation (as defined in Section 13.D below). During the
Term, Landlord, at its expense and subject to the conditions set forth herein,
shall maintain a service contract for the HVAC system with Harvey W. Hottel,
Inc. ("Hottel"). Landlord shall be required to maintain a service contract with
Hottel only so long as, in Landlord's reasonable opinion, (i) Hottel is
maintaining the HVAC system in a first-class manner, and (ii) the cost of
Hottel's services is commercially reasonable when compared to similar
maintenance contracts available to Landlord from reputable and qualified
servicers of commercial HVAC systems in Northern Virginia. If Landlord ceases
to maintain a service contract with Hottel based on the criteria set forth in
the preceding sentence, Landlord thereafter shall maintain an HVAC service
contract with a reputable and qualified servicer of commercial HVAC systems.
Landlord will provide electricity, water and sewer sufficient for Tenant's
reasonable needs. Landlord shall provide at least one (1) automatically
operated elevator twenty-four (24) hours a day, seven (7) days a week
throughout the Term. It is understood and agreed that Landlord shall not be
liable for failure to furnish, or for delay, suspension or reduction in
furnishing, any of the utilities or services required to be furnished by
Landlord hereunder if such failure, delay, suspension or reduction is caused by
breakdown, maintenance, repairs, strikes, scarcity of labor or materials, acts
of God, Landlord's compliance with governmental regulation, legislation, or
judicial or administrative orders, or from any other cause whatsoever beyond
Landlord's reasonable control, which causes shall not include the failure or
inability to pay money; provided, however that Landlord shall, in the event of
a breakdown or a reduction in services or utilities, use reasonable diligence
to restore such utilities and services. Notwithstanding anything to the
contrary

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<PAGE> 16
set forth in the preceding sentence, if any services or utilities that Landlord
is required by this Lease to provide are disrupted or reduced for any reason
for three (3) or more consecutive days and such disruption or reduction
deprives Tenant of the use of all or any portion of the Premises, then, from
the date of such disruption or reduction until such time as the entire Premises
are available for Tenant's use, Rent shall be abated according to the
percentage of the Premises that Tenant is unable to use as a result of such
disruption or reduction.

B. For purposes of this Section, Tenant's hours of operation shall be
Monday through Saturday from 7:00 a.m. to 10:30 p.m. Landlord shall provide
Tenant with after-hours HVAC service (i.e., service during hours other than
Tenant's hours of operation) at no charge. Tenant will provide Landlord with
at least twenty-four (24) hours advance notice of its need for after-hours HVAC
service. Tenant shall use reasonable commercial efforts to conserve on utility
costs for the Premises by engaging in prudent energy management measures.

14. Liability of Landlord

A. Liability

(i) Except as otherwise set forth in this Lease, Landlord shall not
be liable to Tenant for any damage, compensation or claim arising from the
necessity of repairing any portion of the Premises or the Building, the
interruption in the use of the Premises, accident or damage resulting from the
use or operation (by Landlord, Tenant or any other person or persons
whatsoever) of elevators or heating, cooling, electrical or plumbing equipment
or apparatus, or the termination of this Lease by reason of the destruction of
the Premises, or from any fire, robbery, theft, mysterious disappearance and/or
any other casualty, or from any leakage in any part or portion of the Premises
or the Building, or from water, rain or snow that may leak into, or flow from,
any part of the Premises or the Building, or from drains, pipes or plumbing
work in the Building, or from any other cause whatsoever, or for any personal
injury arising from the use, occupancy and condition of the Premises, unless
any of the foregoing is caused by the negligence of Landlord or its agents,
employees or contractors, or a willful act or failure to act on the part of
Landlord or its agents, employees or contractors. Tenant shall not be entitled
to any abatement or diminution of Rent as a result of any of the foregoing
occurrences, unless any of the foregoing is caused by the negligence of
Landlord or its agents, employees or contractors or a willful act or failure to
act on the part of Landlord or its agents, employees or contractors. Any
goods, property or personal effects of Tenant stored or placed in or about the
Premises or the Building shall be at its risk, and Landlord shall not in any
manner be held responsible therefor, unless due to negligence of Landlord or
its agents, employees or contractors, or a willful act or failure to act by
Landlord or its agents, employees or contractors. The employees of Landlord
are prohibited from receiving any packages or other articles delivered to the
Building by or for Tenant, and if any such employee receives any such package
or articles, such employee shall be the agent of Tenant for such purposes and
not of

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<PAGE> 17
Landlord. Tenant acknowledges that Landlord will not carry insurance on
Tenant's furniture, furnishings, fixtures and equipment.

(ii) Except for damages resulting from the negligence or willful
misconduct of Tenant or Tenant's invitees, Tenant shall not be liable to
Landlord, its employees, agents or other invitees for any damage, compensation,
claim or expense arising from (i) damage or loss to the property of Landlord or
others located anywhere in the Building (other than the Premises), or (ii)
death, accident or injury to persons occurring anywhere in the Building (other
than the Premises).

(iii) Notwithstanding anything to the contrary in this Lease, neither
party shall be liable to the other for any loss or damage to property that is
either covered by insurance or that such party is required to insure under this
Lease. The parties shall look to their respective property damage or business
interruption insurance policies, and not to each other, or each other's agents
or employees, for any loss incurred as a result of damage to property or
interruption of business.

B. Indemnity

(i) Tenant hereby agrees to indemnify and hold Landlord harmless
from and against any cost, damage, claim, liability or expense (including
reasonable attorney's fees) incurred by or claimed against Landlord, directly
or indirectly, that is occasioned by or results from any default by Tenant
hereunder or any negligent act on the part of Tenant, or as a result of or in
any way arising from Tenant's use and occupancy of the Premises or in any other
manner which relates to the business of Tenant; provided, however, that the
foregoing indemnity shall not apply with respect to any claim which arises in
whole or in part out of the negligence or willful misconduct of Landlord, its
agents, employees or contractors. In such event, Landlord shall be required to
mitigate damages. Any such cost, damage, claim, liability or expense incurred
by Landlord for which Tenant is obligated to reimburse Landlord shall be deemed
additional rent due and payable in accordance with Section 18.D hereof. It is
expressly understood and agreed that Tenant's liability under this Lease
extends to the acts and omissions of any subtenant and any agent, employee or
contractor.

(ii) Landlord shall protect, defend, indemnify and hold Tenant
harmless from and against all claims for loss of life or injury to person or
property arising from or out of any occurrence in the Building (other than the
Premises) unless caused by the negligence or willful misconduct of Tenant or
its agents, employees or contractors.

15. Rules and Regulations; Compliance with Laws

A. Tenant shall at all times abide by and observe the rules and
regulations attached hereto as Exhibit D. In addition, Tenant shall abide by
and observe such other reasonable rules and regulations as may be promulgated
from time to time by Landlord, with a copy sent to Tenant, for the operation
and maintenance of the Building; provided, however, that the same shall be in

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<PAGE> 18
conformity with common practice and usage in similar buildings and shall not be
inconsistent with the provisions of this Lease. Nothing contained in this
Lease shall be construed to impose upon Landlord any duty or obligation to
enforce such rules and regulations, or the terms, conditions or covenants
contained in any other lease, as against any other tenant, and Landlord shall
not be liable to Tenant for violation of the same by any other tenant, its
employees, agents, contractors, invitees, licensees, customers, clients, family
members or guests. If there is any inconsistency between this Lease and any
current or future rules and regulations, this Lease shall govern.
Notwithstanding the foregoing, Landlord agrees to protect and defend Tenant's
right of quiet enjoyment as covenanted in Section 21.A. Landlord agrees that
any and all changes in rules and regulations shall also be made to apply to any
other Tenant.

B. Subject to Paragraph 5 of Exhibit B and except as set forth
herein, Landlord shall comply with all present and future laws and regulations
applicable to the structure and operation of the Building, including, without
limitation, any laws or regulations, now or hereafter enacted or promulgated by
governmental authorities, applying to life safety systems, handicapped access
and the removal of asbestos or hazardous or toxic waste or materials (other
than hazardous or toxic waste or materials the presence of which is
attributable to Tenant). Tenant at its expense shall comply with all present
and future laws and regulations applicable to Tenant's use of the Premises as a
school or university.

16. Damage; Condemnation

A. Damage to the Premises

If the Premises shall be partially damaged by fire or other casualty,
this Lease shall not be terminated and Landlord shall, after such damage
occurs, repair such damage, at the expense of Landlord (taking into account
unavoidable delays caused by strikes, acts of God, lockouts, labor
difficulties, riots, explosions, sabotage, mechanical breakdowns, accidents,
governmental restrictions, enemy action, civil commotion or any other cause or
reason whatsoever beyond the reasonable control of Landlord, which conditions
shall not include the failure or inability to pay money); provided, however,
that if the Premises or the 903 Building is damaged by fire or other casualty
to such extent that the damage cannot be fully repaired within one hundred
eighty (180) days from the date the damage occurs, Landlord or Tenant, upon
written notice one to the other, shall have the option to terminate this Lease,
and the Term shall terminate ten (10) days after such notice is given, in which
event the Rent shall be apportioned and paid to the date of such damage.
During the period that Tenant is deprived of the use of the damaged portion of
the Premises, Tenant shall be required to pay Rent (as set forth in Section 3)
covering only that part of the Premises that Tenant is able to occupy.

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<PAGE> 19
B. Condemnation

If the whole or a substantial part (as hereinafter defined) of the
Premises (or use or occupancy of the Premises) shall be taken or condemned by
any governmental or quasi-governmental authority for any public or
quasi-public use or purpose, then the terms of this Lease shall cease and
terminate as of the date when title vests in such governmental or
quasi-governmental authority. If less than a substantial part of the Premises
is taken or condemned by any governmental or quasi-governmental authority for
any public or quasi-public use or purpose, the Rent shall be equitably adjusted
(on the basis of the number of square feet before and after such event) on the
date when title vests in such governmental or quasi-governmental authority and
the Lease shall otherwise continue in full force and effect. Tenant shall have
no claim against Landlord (or otherwise) and hereby agrees to make no claim
against the condemning authority for any portion of the amount that may be
awarded as damage as a result of any governmental or quasi-governmental taking
for condemnation or for the value of any unexpired Term of the Lease; provided,
however, that Tenant may claim an award for lost profits, moving expenses and
the value of its leasehold improvements. For purposes of this Section 16.B, a
substantial part of the Premises shall be considered to have been taken if more
than fifty percent (50%) of the Premises are unusable by Tenant as a direct
result of such taking. If between thirty percent (30%) and fifty percent (50%)
of the Premises are unusable by Tenant as a direct result of such taking, then
Tenant shall have the election to stay or move, such election to be exercised
by written notice given by Tenant to Landlord as soon as practicable after the
final and binding award is rendered. Upon gaining knowledge of any
condemnation proceeding under this Section, Landlord shall give written notice
of such proceeding to Tenant.

17. Bankruptcy

A. Events of Bankruptcy

The following shall be "Events of Bankruptcy" under this Lease:

(i) Tenant's becoming insolvent, as that term is defined in Title 11
of the United States Code, entitled Bankruptcy, 11 U.S.C. 101 et seq. (the
"Bankruptcy Code"), or under the insolvency laws of any State, District,
Commonwealth or Territory of the United States (the "Insolvency Laws");

(ii) The appointment of a receiver or custodian for all or a
substantial portion of Tenant's property or assets, or the institution of a
foreclosure action upon all or a substantial portion of Tenant's real or
personal property;

(iii)The filing of a voluntary petition under the provisions of the
Bankruptcy Code or Insolvency Laws;

(iv) The filing of an involuntary petition against Tenant as the
subject debtor under the Bankruptcy Code or Insolvency Laws, that is either not
dismissed within sixty (60)

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<PAGE> 20
days of filing, or results in the issuance of an order for relief against the
debtor, whichever is later; or

(v) Tenant's making or consenting to an assignment for the benefit
of creditors or a common law composition of creditors.

B. Landlord's Remedies

(i) Termination of Lease

Upon the occurrence of an Event of Bankruptcy, Landlord shall
have the right to terminate this Lease by giving written notice to Tenant,
whereupon Tenant shall be immediately obligated to quit the Premises within
five (5) days of receipt of written notice pursuant to this Section 17.B.(i).
Any other notice to quit, or notices of Landlord's intention to re-enter is
hereby expressly waived. If Landlord elects to terminate this Lease,
everything contained in this Lease on the part of Landlord to be done and
performed shall cease without prejudice, subject, however, to the right of
Landlord to recover from Tenant all Rent and any other sums accrued up to the
time of termination or recovery of possession by Landlord, whichever is later,
and any other monetary damages or loss of reserved Rent sustained by Landlord;
provided, however, and notwithstanding the foregoing or the further remedies
set forth in this Section 17.B, Landlord shall not have the right to terminate
this Lease while a case in which Tenant is the subject debtor under the
Bankruptcy Code is pending, unless Tenant or Tenant's trustee in bankruptcy is
unable to comply with the provisions of Section 17.B.(v), (vi) and (vii) below.

(ii) Suit for Possession

Upon termination of this Lease pursuant to Section 17.B.(i),
Landlord may proceed to recover possession under and by virtue of the
provisions of the laws of the Commonwealth of Virginia.

(iii) Reletting of Premises

Upon termination of this Lease pursuant to Section 17.B.(i),
Landlord shall have the option to relet the Premises for such Rent and upon
such terms as are not unreasonable under the circumstances and, if the full
rental reserved under this Lease (and any of the reasonable costs, reasonable
expenses or direct and actual damages indicated below) shall not be realized by
Landlord, Tenant shall be liable for all direct and actual damages sustained by
Landlord, including, without limitation, deficiency in rent, reasonable
attorneys' fees, brokerage fees and expenses of placing the Premises in
rentable condition. Landlord, in putting the Premises in such condition or
preparing the same for re-rental may, at Landlord's option, make such
reasonable alterations, repairs, or replacements in the Premises as Landlord,
in its reasonable judgment, considers advisable and necessary for the purpose
of reletting the Premises, and the making of such alterations, repairs, or
replacements shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Landlord shall be required to mitigate damages.

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<PAGE> 21
(iv) Acceleration of Payments. If Tenant fails to pay any monthly
installment of Rent within twenty (20) days after such Rent is due three (3)
consecutive times or three (3) times in a period of six (6) consecutive months,
then Landlord, by written notice to Tenant, may declare the Rent reserved under
this Lease for the next six (6) months [or at Landlord's option, fewer than six
(6) months] to be due and payable within thirty (30) days after such notice.
Any Rent so accelerated shall be applied by Landlord to the Rent as it becomes
otherwise payable hereunder.

(v) Monetary Damages

Any damage or loss of Rent sustained by Landlord as a result of
an Event of Bankruptcy may by recovered by Landlord, at Landlord's option, at
the time of the reletting, or in separate actions, from time to time, as said
damage shall have been made more easily ascertainable by successive relettings,
or at Landlord's option, in a single proceeding deferred until the expiration
of the Term (in which event Tenant hereby agrees that the cause of action shall
not be deemed to have accrued until the date of expiration of said Term) or in
a single proceeding prior to either the time of reletting or the expiration of
the Term, in which event Tenant agrees to pay Landlord the difference, if any,
between the present value of the Rent reserved under this Lease on the date of
breach, discounted at eight percent (8%) per annum, and the fair market value
determined by the Bankruptcy Court, of the Lease on the date of breach. In the
event Tenant becomes the subject debtor in a case under the bankruptcy Code,
the provisions of this Section 17.B.(iv) may be limited by the limitations of
damage provisions of the Bankruptcy Code.

(vi) Assumption or Assignment by Trustee

In the event Tenant becomes the subject debtor in a case pending
under the Bankruptcy Code, Landlord's right to terminate this Lease pursuant to
this Section 17 shall be subject to the rights of the Trustee in bankruptcy to
assume or assign this Lease. The Trustee shall not have the right to assume or
assign this Lease unless the Trustee: (A) cures, or provides adequate assurance
that the Trustee will promptly cure, such default; (B) compensates, or provides
adequate assurance that the Trustee will promptly compensate, a party other
than Tenant for any actual pecuniary loss to Landlord resulting from such
default; and (C) provides adequate assurance of future performance (as
hereinafter defined) under this Lease.

(vii) Adequate Assurance of Future Performance

Landlord and Tenant hereby agree in advance that the phrase
"adequate assurance of future performance", as used in this Section 17.B.,
shall mean that all of the following minimum criteria must be met: (A) the
Trustee must agree that Tenant's business shall be conducted in a first class
manner, and that no liquidation sales, auctions, or other non-first class
business operations shall be conducted on the Premises; (B) the Trustee must
agree that the use of the Premises as stated in this Lease will remain
unchanged; and (C) the Trustee must agree that the

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<PAGE> 22
assumption or assignment of this Lease will not violate or affect the rights of
other tenants in the Building.

(viii) Failure to Provide Adequate Assurance

In the event Tenant is unable: (A) to cure its defaults, (B) to
reimburse Landlord for its monetary damages, (C) to pay when due the Rent due
under this Lease, or (D) to meet the criteria and obligations imposed by
Section 17.B.(vi) above, then Tenant agrees in advance that it has not met its
burden to provide adequate assurance of future performance, and this Lease may
be terminated by Landlord in accordance with Section 17.B.(i) above.

(ix) Notwithstanding the foregoing, Tenant's rights under the Federal
Bankruptcy Code, as amended, or any other name under which it shall be known,
shall not be prejudiced.

18. Default

A. Tenant's Events of Default

The following shall be "Events of Default" under this Lease:

(i) If Tenant shall fail to make timely any payment required under
this Lease and such failure continues for a period of ten (10) days after
Landlord's written notice thereof to Tenant; or

(ii) If Tenant shall violate or fail to perform any of the other
terms, conditions, covenants or agreements herein made by Tenant, and such
violation or failure continues for a period of thirty (30) days after
Landlord's written notice thereof to Tenant. Notwithstanding anything to the
contrary contained in subparagraph (ii) of the immediately preceding sentence,
Tenant shall not be in default under such subparagraph if the default
thereunder is of such a nature that it cannot be cured within the thirty (30)
day period provided for therein so long as Tenant shall commence to cure such
default within such thirty (30) day period and shall thereafter diligently and
continuously prosecute the curing of such default.

B. Landlord's Remedies

Should any Event of Default occur under this Lease, Landlord may
pursue any or all of the following remedies:

(i) Termination of Lease

Landlord may terminate this Lease, by giving written notice of
such termination to Tenant, whereupon this Lease shall automatically cease and
terminate and Tenant shall be immediately obligated to quit the Premises. Any
other notice to quit or notice of Landlord's intention to re-enter the Premises
is hereby expressly waived. If Landlord elects to terminate this Lease,
everything contained in this Lease on the part of Landlord to be done and
performed shall cease without prejudice; provided,

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<PAGE> 23
however, that Landlord shall (a) have the right to recover from Tenant all Rent
and any other sums accrued up to the time of termination or recovery of
possession by Landlord, whichever is later, and (b) act in a commercially
reasonable manner to mitigate its damages;

(ii) Suit for Possession

Upon termination of this Lease pursuant to Section 18.B.(i),
Landlord may proceed to recover possession of the Premises under and by virtue
of the provisions of the laws of the Commonwealth of Virginia;

(iii) Reletting of Premises

Should this Lease be terminated by reason of Tenant's default as
hereinabove provided, Landlord shall have the option to relet the Premises for
such Rent and upon such terms as are commercially reasonable, and, if the full
rental reserved under this Lease (and any of the reasonable costs, reasonable
expenses or direct and actual damages indicated below) shall not be realized by
Landlord, Tenant shall be liable for all direct and actual damages sustained by
Landlord, including, without limitation, deficiency in rent, reasonable
attorneys' fees, reasonable brokerage fees and reasonable expenses of placing
the Premises in rentable condition. Landlord shall be required to mitigate
damages. Landlord, in preparing the Premises for re-rental may, at Landlord's
option, make such alterations, repairs or replacements in the Premises as
Landlord, in its reasonable judgment, considers advisable and necessary for the
purpose of reletting the Premises, and the making of such alterations, repairs
or replacements shall not operate or be construed to release Tenant from
liability hereunder as aforesaid;

(iv) Acceleration of Payments

[INTENTIONALLY DELETED.]

(v) Monetary Damages

Any actual and direct damage or loss of Rent sustained by
Landlord may be recovered by Landlord, at Landlord's option, at the time of
the reletting, or in separate actions, from time to time, as said damage shall
have been made more easily ascertainable by successive relettings, or at
Landlord's option in a single proceeding deferred until the expiration of the
Term (in which event Tenant hereby agrees that the cause of action shall not be
deemed to have accrued until the date of expiration of said Term) or in a
single proceeding prior to either the time of reletting or the expiration of
the Term; or

(vi) Cumulative Remedies

Mention in this Lease of any particular remedy shall not
preclude Landlord or Tenant from any other remedy, in law or in equity. Tenant
hereby expressly waives any and all rights of redemption granted by or under
any present or future laws in the event of Tenant being evicted or
dispossessed, or in the event of Landlord obtaining possession of the Premises,
by

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<PAGE> 24
reason of the violation by Tenant of any of the covenants and conditions of
this Lease. Tenant does not waive any rights it may have under this Lease.

C. Waiver

If, under the provisions hereof, Landlord shall institute proceedings
against Tenant and a compromise or settlement thereof shall be made, the same
shall not constitute a waiver of any other covenant, condition or agreement
herein contained nor of any of Landlord's rights hereunder except as
specifically compromised and settled. No waiver by either party of any breach
of any covenant, condition or agreement herein contained shall operate as a
waiver of such covenant, condition or agreement itself, or of any subsequent
breach thereof. No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly installments of Rent payable hereunder shall be deemed to be
other than on account of the earliest payable Rent, nor shall any endorsement
or statement on any check or letter accompanying a check for payment of Rent
deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Rent or to pursue any other remedy provided in this Lease. No re-entry by
Landlord, and no acceptance by Landlord of keys from Tenant, shall be
considered an acceptance of a surrender of the Lease.

D. Right of Landlord to Cure Tenant's Default

If Tenant defaults in the making of any payment or in the doing of
any act herein required to be made or done by Tenant, then Landlord, following
such notice and opportunity to cure as is required by Section 18.A, may, but
shall not be required to, make such payment or do such act, and charge the
amount of the expense thereof, if made or done by Landlord, with interest
thereon at the rate per annum that is two percent (2%) greater than the "prime
rate" then in effect at Citibank, N.A., New York, New York (the "Penalty
Rate"), from the date paid by Landlord to the date of payment thereof by
Tenant; provided, however, that nothing herein contained shall be construed or
implemented in such a manner as to allow Landlord to charge or receive interest
in excess of the maximum legal rate then allowed by applicable law. Such
payment and interest shall constitute additional rent hereunder due and payable
with the next monthly installment of Rent.

E. Late Payment

If Tenant fails to pay an installment of Rent and/or additional rent
on or before the tenth (10th) day of the calendar month in which such
installment becomes due and payable, Tenant shall pay to Landlord a late charge
of four percent (4%) of the amount of such installment. Such late charge shall
constitute additional rent hereunder due and payable with the next monthly
installment of rent due.

19. Holding Over

In the event that Tenant shall not immediately surrender the Premises on
the Lease Expiration Date, Tenant shall, by virtue of

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<PAGE> 25
the provisions hereof, become a tenant by the month. In such event unless
Landlord has given its written consent to a monthly tenancy Tenant shall be
required to pay one hundred fifty percent (150%) of the Basic Rent required
under Section 3.A(i) hereof, together with all additional rent in effect during
the last month of the Term. Such monthly tenancy shall commence with the first
day next after the expiration of the Term. Except as otherwise provided above
with respect to the payment of rent, Tenant shall, as a monthly tenant, be
subject to all of the terms, conditions, covenants and agreements of this
Lease, Tenant shall give Landlord at least thirty (30) day's written notice of
any intention to quit the Premises, and Tenant shall be entitled to thirty (30)
days' written notice to quit the Premises; provided, however, that if Tenant is
in default hereunder, Tenant shall not be entitled to any notice to quit, the
usual thirty (30) day's notice to quit being hereby expressly waived.
Notwithstanding the foregoing provisions of this Section 19, in the event that
Tenant shall hold over after the expiration of the Term, and if Landlord shall
desire to regain possession of the Premises promptly at the expiration of the
Term, then at any time prior to Landlord's acceptance of Rent from Tenant as a
monthly tenant hereunder, Landlord, at its option, may forthwith re-enter and
take possession of the Premises by any legal process available in the
Commonwealth of Virginia.

20. Security Deposit

Landlord hereby acknowledge the prior receipt from Tenant of the sum of
Eighteen Thousand Four Hundred Forty and Twenty-Six Hundredths Dollars
($18,440.26) as a security deposit. The security deposit shall bear interest
from the Lease Commencement Date until returned to Tenant pursuant to this
Section 20 at the passbook savings rate and shall be considered as security
for the payment and performance by Tenant of all of Tenant's obligations,
covenants, conditions and agreements under the Lease. If Tenant is not in
default under the terms hereof, beginning in the thirty-seventh (37th) month of
the Term, at Tenant's sole discretion, Tenant may apply such security deposit
plus accrued interest to Tenant's rental obligations as set forth in Section 3
less such portion thereof as Landlord shall have retained to make good any
default by Tenant with respect to any of Tenant's aforesaid obligations,
covenants, conditions or agreements. In the event of any default by Tenant
hereunder during the Term, Landlord shall have the right, but shall not be
obligated, to apply all or any portion of the security deposit plus any accrued
interest to cure such default, in which event Tenant shall be obligated
promptly after written notice to deposit with Landlord the amount necessary to
restore the security deposit to the amount held by Landlord immediately prior
to such advance by Landlord. In event of the sale or transfer of Landlord's
interest in the Building, Landlord shall have the right to transfer the
security deposit to the purchaser or transferee, in which event Tenant shall
look only to the new landlord for the return of the security deposit and
Landlord shall thereupon be released from all liability to Tenant for the
return of such security deposit.

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<PAGE> 26
21. Covenants of Landlord

A. Quiet Enjoyment

Landlord covenants that it has the right to make this Lease for the
Term aforesaid, and that if Tenant shall pay the Rent and perform all of the
covenants, terms, conditions and agreements of this Lease to be performed by
Tenant, Tenant shall, during the Term hereby created, freely, peaceably and
quietly occupy and enjoy the full possession of the Premises without
molestation or hindrance by Landlord or any party claiming through or under
Landlord, subject to the provisions of Section 21.B. Landlord recognizes that
Tenant's business is dependent on the absence of intrusive noise, and Landlord
agrees to make every reasonable effort to preserve quiet in the Premises.
Specifically, Landlord agrees not to permit the installation of noisy equipment
in any space contiguous to the Premises that Landlord leases in the future.

B. Reservation

Landlord hereby reserves to itself and its successors and assigns the
following rights (all of which are hereby consented to by Tenant): (i) to
erect, use and maintain pipes and conduits in and through the plenum of the
Premises, and (ii) to grant to anyone the exclusive right to conduct any
particular business or undertaking in the 903 Building that is in keeping with
a first class office building in Arlington, Virginia. Landlord may exercise any
or all of the foregoing rights without being deemed to be guilty of an
eviction, actual or constructive, or a disturbance or interruption of the
business of Tenant or Tenant's use or occupancy of the Premises. In the event
of any sale or transfer by the then Landlord hereunder of the Building, the
landlord whose interest is sold or transferred shall be and hereby is
completely released and forever discharged from and in respect of all
covenants, obligations and liabilities as landlord hereunder accruing after the
date of such sale or transfer; provided, however, that as conditions precedent
to such release or discharge, (i) Landlord, prior to the consummation of any
sale or transfer, shall have given actual notice of the existence or this
Lease, as then amended, to such purchaser or transferee, and shall deliver a
copy of the Lease, as then amended, to such purchaser or transferee, (ii) and
such purchaser or transferee shall assume Landlord's obligations under this
Lease in writing. Landlord hereby agrees to indemnify and hold Tenant harmless
from and against any cost, damage, claim, liability or expense (including
reasonable attorney's fees) incurred by or claimed against Tenant, directly or
indirectly, that is occasioned by or results from any defaults by Landlord in
giving such notice. This Lease shall not be affected by any such sale or
transfer, and the successor Landlord shall accept this Lease and be bound by
its terms, and tenant agrees to attorn to such successor-landlord.

22. Parking

Without additional cost, Tenant shall have the right to use ninety (90)
parking spaces in the Garage throughout the Term and any Extension Term.
During the Term and the Extension Term,

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<PAGE> 27
Landlord shall not reduce the total number of parking spaces available in the
Garage.

23. Miscellaneous

A. No Representations by Landlord

Tenant acknowledges that neither Landlord nor any broker, agent or
employee of Landlord has made any representations or promises with respect to
the Premises or the Building except as herein expressly set forth, and no
rights, privileges, easements or licenses are acquired by Tenant except as
herein expressly set forth. Subject to Section 7, Tenant will accept occupancy
of the Premises entirely "As Is" except as provided in Exhibit B.

B. No Partnership

Nothing contained in this Lease shall be deemed or construed to
create a partnership or joint venture of or between Landlord and Tenant, or to
create any other relationship between the parties hereto other than that of
Landlord and Tenant.

C. Estoppel Certificate

Tenant agrees, at any time and from time to time during the Term,
upon not less than twenty (20) days prior written notice by Landlord, to
execute, acknowledge and deliver to Landlord a statement in writing that shall
contain substantially the following provisions: (i) a statement that this Lease
is unmodified and in full force and effect (or if there have been
modifications, that the Lease is in full force and effect as modified and
stating the modifications), (ii) a statement of the dates to which the Rent and
any other charges hereunder have been paid by Tenant, (iii) a statement of
whether or not, to the best knowledge of Tenant, Landlord is in default in the
performance of any covenant, agreement or condition contained in this Lease,
and if so, specifying each such default of which Tenant may have knowledge,
(iv) a statement of the address to which notices to Tenant should be sent, (v)
a statement that Tenant accepts the Premises and the improvements therein, if
true, and (vi) such other statements pertaining to the status of the Lease as
Landlord, any prospective purchaser of the Building or the Land, any mortgagee
or prospective mortgagee of the Building or the Land or of Landlord's interest
in either and/or any prospective assignee of any such mortgagee, may reasonably
request. Any such statement delivered pursuant hereto, may be relied upon by
any owner of the Building or the Land, any prospective purchaser of the
Building or the Land, any mortgagee or prospective mortgagee of the Building or
the Land or of Landlord's interest in either, or any prospective assignee of
any such mortgagee.

Landlord, within twenty (20) days after a request therefor, shall deliver
to Tenant an estoppel certificate pertaining to the status of the Lease.

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<PAGE> 28
D. Days - Calendar Days

Unless the context specifically provides to the contrary, any
reference to days in this Lease refers to calendar days, including holidays and
weekends.

E. Liability

It is expressly understood and agreed that the liability of Landlord
to Tenant under this Lease is restricted solely to the assets of the limited
partnership that owns the Land and the Building and that the partners thereof
shall have no personal liability under this Lease.

F. Notices

All notices or other communications hereunder shall be in writing and
shall be deemed duly given if delivered in person (with receipt therefor) or by
certified or registered mail, return receipt requested, first class postage
prepaid, (i) if to Landlord at GLM - Highland Building Limited Partnership,
Suite 705, 2600 Virginia Ave., NW, Washington, D.C. 20037, and (ii) if to
Tenant, at 903 South Highland Street, Arlington, Virginia 22204 Attn: Mr. Ron
K. Bailey, unless notice of change of address is given pursuant to the
provisions of this Section 23.F. If notice is served by mail, notice shall be
deemed duly served on the date stamped on the receipt.

G. Invalidity of Particular Provisions

If any provision of this Lease or the application thereof to any
person or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and be enforced to the fullest extent permitted by law.

H. Gender and Number

Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular number, in
any place or places herein in which the context may require such substitution.

I. Benefit and Burden

The provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto and each of their respective
representatives, successors and assigns. Landlord may freely and fully assign
its interest hereunder.

J. Subordination

(i) This Lease is subject and subordinate to the lien of all and any
mortgages (which term "mortgages" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
that may now or hereafter encumber or otherwise affect the Land and Building of
which the Premises form a part, or Landlord's

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<PAGE> 29
leasehold interest therein, and to all and any renewals, extensions,
modifications, recasting or refinancing thereof. Tenant agrees that in the
event that any proceedings are brought for the foreclosure of any such
mortgages, Tenant shall attorn to the purchaser at such foreclosure sale, if
requested to do so by such purchaser, and shall recognize such purchaser as the
landlord under this Lease, and Tenant waives the provisions of any statute or
rule of law, now or hereafter in effect, that may give or purport to give
Tenant any right to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event that any such foreclosure
proceeding is prosecuted or completed. Further, any purchaser, assignee, and
mortgagee shall be required to recognize this Lease.

(ii) Notwithstanding anything to the contrary set forth in the
preceding paragraph, this Lease shall not be subordinate to any ground or
underlying lease or to the lien of any mortgage, deed of trust or other
encumbrance (each, a "Mortgage") until and unless the parties to such Mortgage
acknowledge in writing that Tenant's interest in the Premises and its rights
under this Lease shall not be disturbed so long as Tenant is not in default
under this Lease. Landlord shall keep each such Mortgage in full force and
effect and shall not permit any default thereunder. Tenant's obligation to pay
Rent under this Lease is conditioned upon Landlord obtaining a nondisturbance
agreement in form and substance reasonably satisfactory to Tenant (a
"Nondisturbance Agreement") from the parties to any Mortgages in existence
prior to the Lease Commencement Date. Landlord shall use reasonable commercial
efforts to obtain, (i) prior to the time this Lease is executed, a
Nondisturbance Agreement from any lender whose interest is secured by a
Mortgage as of the date this Lease is executed, and (ii) a Nondisturbance
Agreement from any future lender whose interest is secured by a Mortgage on the
Building.

K. Entire Agreement

This Lease, together with Exhibits A through D attached hereto,
contains and embodies the entire agreement of the parties hereto, and no
representations, inducements or agreements between the parties, oral or
otherwise, not contained in this Lease and the Exhibits, shall be of any force
or effect. This Lease may not be modified, changed or terminated in whole or
in part in any manner other than by an agreement in writing duly signed by both
parties hereto.

L. Common Areas

Tenant, its agents, employees, contractors and invitees shall have
the right to use the common areas of the Building in common with other tenants
of the Building and their agents, employees, contractors and invitees.

M. Leasing Commission. Landlord and Tenant each represents and warrants
to the other that, except for The Fred Ezra Company ("Ezra"), neither of them
has employed any broker in carrying on the negotiations relative to this Lease
or otherwise in connection with this Lease. Landlord and Tenant shall each
indemnify and hold harmless the other from and against any claim

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<PAGE> 30
or claims for brokerage or other commission arising from such party having
employed a broker (other than Ezra) contrary to its representation in this
Section 23.M. Landlord recognizes that FE is entitled to the payment of a
commission for services rendered in the negotiation and obtaining of this
Lease, and Landlord has agreed to pay such commission pursuant to a separate
agreement.

24. Consent of Landlord

Whenever in this Lease Landlord's consent is a prerequisite of an action by
Tenant, such consent shall not be unreasonably withheld or delayed.

25. Choice of Law

This Lease shall be construed, interpreted and determined in accordance
with the laws of the Commonwealth of Virginia.

26. Options to Extend

A. Extension Terms; Rent per Square Foot

(i) Tenant shall have the option to extend the Term for two (2)
additional consecutive periods of five (5) years each (the "Extension Terms")
commencing immediately following the expiration of the initial Term and (with
respect to the second Extension Option) immediately following the expiration of
the initial five-year Extension Term, at the Rent per Square Foot for the
Premises set forth herein. (Each of the options referred to in the preceding
sentence shall be referred to hereafter as an "Extension Option".) The Rent per
Square Foot for both Extension Terms shall be ninety percent (90%) of the "Fair
Market Rent per Square Foot" [as defined in subsection (ii) of this Section
26.A]. Commencing with the second Lease Year of each such Extension Term, the
Rent per Square Foot shall be an amount equal to one hundred two percent (102%)
of the Rent per Square Foot for the immediately preceding Lease Year

(ii) The "Fair Market Rent per Square Foot" shall mean the prevailing
fair market rental rate (including prevailing fair market tenant concessions
being offered by landlords as of the commencement of the applicable Extension
Term) for leases of comparable size in buildings of similar age, quality and
location as the Building and with tenants of comparable creditworthiness as
Tenant ("Comparable Leases"). The Fair Market Rent per Square Foot shall be
reduced to a net effective rent by adjusting such rent to reflect the value of
any rent abatement, build-out allowances or other tenant concessions offered in
connection with such rent. For a period of forty-five (45) days following
Tenant's exercise of its renewal option, the parties shall attempt in good
faith to agree on the Fair Market Rent per Square Foot. If the parties are
unable to agree, the parties shall use the method for determining the Rent per
Square Foot set forth in Section 26.B below.

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<PAGE> 31
B. If the parties are unable to agree on the Fair Market Rent per
Square Foot, the Fair Market Rent per Square Foot shall be determined as set
forth in this Section 26.B, provided, however, that in no event shall the Fair
Market Rent per Square Foot payable during the first Lease Year of the first or
second Extension Term be less than one hundred two percent (102%) of the Rent
per Square Foot payable during the last Lease Year of the original Term or the
first Extension Term, respectively. Within ten (10) days after expiration of
the 45-day negotiating period described in Section 26.A(ii) above, each party
will designate a licensed real estate broker with at least five (5) years'
experience in commercial office building leasing in Arlington, Virginia (an
"Appraiser" or the "Appraisers"). The two (2) Appraisers shall together
select a third (3rd) Appraiser within five (5) days after their selection.
Within twenty-five (25) days after all three (3) Appraisers have been chosen,
each shall render his opinion as to the Fair Market Rent per Square Foot, using
the definitions and criteria set forth in Section 26.A above. The disputed
Fair Market Rent per Square Foot shall be the average of the amounts determined
by all three (3) Appraisers. Notwithstanding the foregoing, if any of the
three (3) appraisals is either ten percent (10%) greater or less than the
average of the three (3) appraisals, then such appraisal shall be disregarded,
and the disputed Fair Market Rent per Square Foot shall be the average of the
two other appraisals. If two (2) of the appraisals are either ten percent
(10%) greater or less than the average of the three (3) appraisals, then both
of such appraisals shall be disregarded, and the remaining appraisal alone
shall be used. If all three (3) of the appraisals are either ten percent (10%)
greater or less than the average of the three (3) appraisals, then the average
of the three appraisals shall be used. The parties shall share equally the
cost of the three (3) appraisals.

C. The Base Year for calculating Tenant's Proportionate Share of
Operating Increases during the first Extension Term shall be the first Lease
Year of the first Extension Term. The Base Year for calculating Tenant's
Proportionate Share of Operating Increases during the second Extension Term
shall be the first Lease Year of the second Extension Term.

D. Tenant shall have the right to exercise each Extension Option
provided (i) this Lease is in full force and effect and Tenant is not in
default under any of the material terms of this Lease, and (ii) Tenant provides
written notice to Landlord of Tenant's desire to exercise the Extension Option
no later than twelve (12) months prior to the expiration of the initial Term or
the first Extension Term, as the case may be. If Tenant elects to finalize its
exercise of the Extension Option, Tenant shall provide written notice to
Landlord of Tenant's desire to finalize the Extension Option within thirty (30)
days after the Fair Market Rent per Square Foot has been determined pursuant to
this Section 26. If Tenant does not give Landlord such notice within this
30-day period, Tenant's exercise of its renewal option shall be deemed
withdrawn.

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<PAGE> 32
27. Landlord's Default

If Landlord fails promptly and adequately to perform or observe any
provision contained in this Lease on its part to be performed or observed (i)
within ten (10) days after written notice in the case of a default in the
payment of money, (ii) within fifteen (15) days after written notice in the
case of a failure to provide services or to make repairs, and (iii) in all
other cases within thirty (30) days after written notice of default, unless
more than thirty (30) days shall be required because of the nature of the
default, in which case if Landlord shall fail to proceed diligently to cure
such default after notice, Landlord shall be responsible to Tenant for any and
all actual damages sustained by tenant as a result of such failure. After the
expiration of any grace period provided in the preceding sentence, Tenant, in
addition to any other right it may have at law or in equity, shall have the
right, but not the obligation, to cure any such default at Landlord's expense,
and Landlord shall be obligated to reimburse Tenant on demand for all of
Tenant's costs and expenses in connection therewith, including, but not limited
to, all costs and reasonable attorneys' fees incurred to cure such default or
breach of Lease. Notwithstanding the foregoing, Tenant shall only be entitled
to offset against Rent any claim it might have for reimbursement under this
Section 27 if Tenant has received a judgment by a court of competent
jurisdiction to this effect.

[Signatures appear on next page.]

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<PAGE> 33

IN WITNESS WHEREOF, Landlord and Tenant have executed this lease
under seal on the day and year first hereinabove written.

LANDLORD:
---------

GLM-HIGHLAND BUILDING LIMITED
PARTNERSHIP

By: GLM Development
Corporation,
General Partner

ATTEST:
/s/ DONNA J. WESTLUND By: /s/ WILLIAM A. DIETCH
- ----------------------- ----------------------
[Corporate Seal] William A. Dietch
Vice President

ATTEST: TENANT:
------

STRAYER COLLEGE, INC.

/S/ GLENDA S. HARDISON By: /s/ RONALD K. BAILEY
- ------------------------ --------------------
Ronald K. Bailey,
President
[Corporate Seal]

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<PAGE> 1
EXHIBIT 10.08

LEASE AGREEMENT

THIS LEASE AGREEMENT (hereinafter referred to as "this Lease")
is made this 21st day of April, 1993 by and between STRAYER COLLEGE
(hereinafter referred to as "Tenant"); and ALEXANDRIA TECH CENTER I, a Virginia
Limited Partnership (hereinafter referred to as "Landlord"); as follows:

1. PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord, for the term, or terms, and under the
covenants and conditions hereinafter set forth, the real property situate and
lying in the City of Alexandria, Virginia being identified as Landlord's
building (hereinafter referred to as "the Premises") located at 2730 Eisenhower
Avenue, Alexandria, Virginia and consisting of two stories containing
approximately 21,948 square feet of space in the Alexandria Tech Center. The
Premises and the parcel of land on which the Building is situated and any other
improvements thereon herein referred to collectively as the "Property." The
Property is further identified as Parcel 7100-02-04-01-4 as duly dedicated,
platted and recorded in Deed Book 1143, page 46 in Deed Book 1144, page 1330
among the land records of the City of Alexandria, Virginia.

2. TERM. The term of this Lease shall be five (5) years
commencing on June 15, 1993 and expiring on June 14, 1998.

3. RENT.

(a) Basic Rent-Original Term. Tenant agrees to pay to
Landlord annual basic rent in the sum of TWO HUNDRED FORTY SIX THOUSAND NINE
HUNDRED FIFTEEN AND No/100 DOLLARS ($246,915.00). Basic rent shall be paid in
equal monthly installments on or before the fifteenth day of each calendar
month hereunder, without demand being made therefor of TWENTY THOUSAND FIVE
HUNDRED SEVENTY SIX AND 25/100 DOLLARS ($ 20,576.25). Each monthly payment of
rent shall be made payable to Landlord and mailed or delivered to Landlord in
care of its management agent at the address set forth in Section 26
hereinbelow, or to such other person, or at such other place, as Landlord may
from time to time designate in writing. The annual Basic Rent payment shall be
adjusted upon notice to Tenant by Landlord, pursuant to the terms of Section
23.

(b) Payment of Rent. It is agreed and understood by all
parties to this Lease that any rental payment received by the Landlord ten (10)
days or more after the due date shall be subject to imposition of a late charge
of five percent (5%) of the monthly rental. Said late charge, if not remitted
with the delinquent rental payment, shall be due and payable with the following
payment and shall be considered additional rent.

(c) Additional Rent. Tenant's Proportionate Share (as
defined in Section 7) of the expenses described in Sections 7 and 8 hereof,
together with any other charges or sums due to Landlord hereunder shall be
deemed Additional Rent.
<PAGE> 2
4. USE. The Premises are to be used for the purpose of
operating an educational institution and for no other purposes whatsoever
without the prior written consent of Landlord. Landlord shall obtain the
occupancy permit.

5. UTILITIES. Tenant shall be solely responsible for
and shall promptly pay all charges for water, sewer, heat, gas, electricity,
and/or any other utility used or consumed in connection with the Premises and
shall provide trash and refuse removal.

6. TAXES. Tenant agrees to pay to Landlord all of the
real property, front foot benefit, metropolitan district and other similar
taxes or public or private assessments (whether regular or special) levied
against any or all of the Property and to pay, or cause to be paid, any and all
taxes of whatever nature levied against the personal property, including trade
fixtures, equipment and inventory kept on the Premises or used from the
Premises; and any and all use, employee, business or other taxes incurred by
Tenant's operation.

7. JANITORIAL, SERVICE & TRASH REMOVAL. Tenant shall be
solely responsible for all building janitorial, cleaning services and trash
removal services.

8. COMMON AREA MAINTENANCE EXPENSES. Tenant shall pay
to Landlord as Additional Rent its Proportionate Share of Common Area
Maintenance Expenses. Common Area Maintenance Expenses shall include the
amount paid by the Landlord to Alexandria Tech Center Owner's Association for
Common Area landscaping, private street and utility maintenance and repair,
snow removal, labor, fees and insurance. Tenant's proportionate share of
Alexandria Tech Center Owner's Association for all purposes of this Lease is
currently 4.95%. Tenant's Proportionate Share will be reduced accordingly if
additional Buildings are developed. Premiums on insurance and other normal
operating expense, but neither payments of interest nor principal due under any
mortgage or deed of trust nor any depreciation allowance shall be included
among such items.

9. MAINTENANCE AND OTHER OPERATING EXPENSES.

(a) Tenant, at Tenant's cost, shall keep and
maintain the interior of the Premises in good order and repair, usual wear and
tear excepted. Tenant shall keep the exterior of the Premises, including the
adjacent sidewalks,parking areas and trash receptacle areas, free of all trash
or debris. Tenant, at Tenant's expense, shall perform all maintenance or
service on all the mechanical, plumbing, electrical and heating and air
conditioning and elevator equipment located in or serving the Premises and
shall keep and maintain such equipment in good order and repair during the term
of this Lease. Landlord warrants that all mechanical plumbing, electrical and
heating and air conditioning equipment located in or servicing the Premises are
in good working order, and Landlord will be responsible for any repairs
required within the first 30 days after Tenant occupies the Premises.

2
<PAGE> 3
(b) Tenant agrees to replace any plate, window or
door glass broken in the Premises, with glass of like kind and quality except
when said plate, window or door glass is broken by reason of defective
construction of the Building, or due to negligent repair of the Building by
Landlord. Tenant shall be responsible for its Proportionate Share of the cost
of all common area maintenance, including, but not limited to, any public
liability insurance maintained by Landlord with respect to the Property, which
Proportionate Share Tenant shall pay to Landlord as Additional Rent hereunder.

(c) Tenant, at Tenant's cost, is responsible for
the maintenance of the elevator emergency telephone service, building security,
monitoring access system, exterminating service and Premises landscape
maintenance.

10. ALTERATIONS, ADDITIONS AND IMPROVEMENTS. Landlord
and Tenant acknowledge that the Premises will be improved by Landlord in
preparation for the conduct of Tenant's business, as shown in Attachment 1.
Tenant shall deliver to Landlord in writing all information about Tenant's
floor plan, partitioning, electrical, floor loading and other requirements for
the improvements to be made to the Premises. Improvements will begin on or
before April 26, 1993. Landlord shall complete all of the work shown on the
Approved Plans at Landlord's sole cost and expense not to exceed $263,376.00
($12 per sq. ft. X 21,948 sq. ft.). Landlord hereby warrants to Tenant that
any and all such alterations or improvements shall be made in full and complete
compliance with all laws, rules, regulations, ordinances and in satisfaction of
the requirements of such health and other codes as may now, or during the term
or terms hereunder, be or become applicable. Any and all such alterations,
additions or improvements shall be made by Landlord in a good workmanlike
manner without cost to Tenant. All alterations; additions or improvements
shall become the property of Landlord. Tenant shall make no further
alterations, additions or improvements without Landlord's prior written
consent. Unspent portions shall revert to Tenant.

11. TRADE AND OTHER FIXTURES. Tenant may install, or
cause to be installed, such equipment and trade or other fixtures as are
reasonably necessary for the operation of its business. Such trade or other
fixtures shall remain personal property and shall be removed by Tenant at the
termination of this Lease. Any damage to the Premises caused by such removal
shall be repaired by Tenant or by Landlord at Tenant's expense.

12. CASUALTY DAMAGE. Upon the occurrence of any
casualty, damage or destruction affecting the Premises, Tenant shall give
immediate notice to Landlord. If, in the opinion of Landlord, the Premises are
rendered substantially unfit for occupancy or use by any such casualty, damage
or destruction, or Landlord shall decide not to rebuild or remodel the
Premises, this Lease shall cease and Basic Rent and Additional Rent shall abate
from the occurrence of such casualty or vacation of the Premises, whichever is
later. If, in the opinion of Landlord, the Premises are not thereby rendered
substantially unfit for occupancy or use, Landlord shall promptly and
diligently restore so much of the Premises

3
<PAGE> 4
as was damaged to its condition at the commencement of this Lease, exclusive of
the Tenant Improvement Items, with no abatement of rent.

13. FIRE INSURANCE. Landlord shall provide, and pay the
premiums for, Fire and Extended Coverage and Boiler and Machinery Insurance, to
protect the Building with coverage amounts and with an insurer satisfactory to
Landlord. Tenant will not do anything in or about the Premises that will
contravene or affect any insurance which Landlord may place thereon. Tenant
will pay as Additional Rent its Proportionate Share of the cost of such
insurance upon being billed therefor by Landlord and shall pay the entire cost
of any increase in the insurance premium due to Tenant's use of the Premises.

14. LIABILITY INSURANCE-HOLD HARMLESS. Landlord shall
not be liable to Tenant or Tenant's employees, patrons or visitors for any
damage to persons or property caused by any action, omission or negligence of
Landlord, and Tenant agrees to hold Landlord harmless from all claims for any
such damage; nor shall Landlord be liable for any damage to persons or property
due to the Building, any other improvement located on the Property, or any part
or appurtenance thereof being improperly constructed, or being or becoming out
of repair, and Tenant accepts the Premises as suitable for the purposes for
which the same are leased, and accepts the Building and each and every
appurtenance thereof "AS IS". Additionally, Tenant hereby agrees to hold
Landlord harmless in respect to any act or omission of other tenants, their
agents, employees, contractors, patrons or visitors. Tenant agrees at Tenant's
expense to maintain in force continuously throughout the term or terms of this
Lease public liability insurance covering the Premises, with such limits as may
be required by Landlord from time to time, but in any event of not less than
$500,000 for each person and $1,000,000 for each occurrence with respect to
bodily injury or death and $100,000 for each occurrence with respect to
property damage or destruction, and shall forthwith furnish Landlord a
certificate by the insurer that such insurance is in force and naming Landlord
as an additional insured.

15. COMPLIANCE WITH LAWS. Tenant agrees to promptly comply
with all applicable and valid laws, ordinances and regulations of any and all
Federal, State, County, Municipal or other lawful authorities pertaining to the
use and occupancy of the Premises.

16. ASSIGNMENT AND SUBLETTING. Tenant shall have the
right to sublease or assign all or any portion of the Premises throughout the
term of the lease. Any such assignment or sublease shall be subject to all of
the terms and conditions of this Lease and Tenant shall remain primarily liable
for the payment of the rent and the performance of all of the terms and
conditions hereof. Tenant shall notify Landlord in writing of such sublease or
assignment.

17. BANKRUPTCY. Should Tenant make an assignment for
benefit of creditors, file for bankruptcy, or have an involuntary petition in
bankruptcy filed against it, such action shall constitute a breach of this
Lease, which shall automatically terminate all rights of Tenant under the
Federal Bankruptcy Code (or any successor federal bankruptcy statute).

4
<PAGE> 5
Tenant, as debtor and as debtor in possession, and any trustee who may be
appointed, agree to perform each and every obligation of Tenant under this
Lease, including, but not limited to, the payment of all monetary obligations
hereunder, until such time as this Lease is either rejected or assumed by order
of a United States Bankruptcy Court, or other federal court having jurisdiction
over bankruptcy matters.

18. EMINENT DOMAIN. If all or any part of the Premises
are taken under power of eminent domain or conveyed under threat of
condemnation proceedings and Landlord shall determine that the remainder of the
Premises is inadequate or unsatisfactory for the purposes of this Lease, then
this Lease shall terminate effective as of the date Tenant is required to give
up the right to occupy or use the Premises. Tenant shall have no right to make
any claim against Landlord because of such termination, nor to participate in
any awards.

19. ENFORCEMENT OF LEASE. If suit is brought by Landlord
to enforce any covenant of this Lease or for the breach of any covenant or
condition herein contained, Tenant agrees that it shall pay to Landlord a
reasonable attorney's fee and court costs. Each party hereby waives its right
to jury trial in any suit relating to this Lease and Tenant waives any
statutory right of redemption.

20. DEFAULT. In the event Tenant shall default in the
performance of any obligation hereunder requiring monetary payments or shall
default in the performance of any other obligation hereunder and such default
is not cured within ten (10) days of Landlord's notice to Tenant, then Landlord
may enforce performance of this Lease in any manner provided by law, and/or
Landlord may (i) re-enter and repossess the Premises and any and all
improvements thereon and additions thereto; (ii) declare the entire balance of
the rent for the remainder of the term to be due and payable, and collect such
balance by any manner not inconsistent with applicable law, (iii) terminate
this Lease by giving written notice of such termination to Tenant without in
any way releasing Tenant from its obligation for payment of rent for the
remainder of the term; and (iv) pursue any combination of such remedies and/or
any other right or remedy available to Landlord. Upon a termination of this
Lease by Landlord, this Lease shall cease and come to an end as if that were
the day originally fixed for the expiration of the term thereof, and Landlord's
agent or attorney shall have the right without further notice or demand to
re-enter and remove all persons from the Premises without being deemed guilty
of any manner of trespass and without prejudice to any remedies for arrears of
rent or breach of covenant, or Landlord's agent or attorney may resume
possession of the Premises and relet the same for the remainder of the term at
the best rental such agent or attorney may obtain for the account of Tenant,
who shall pay to Landlord any deficiency, and Landlord shall have a lien as
security for the rent reserved upon all the goods, wares, chattels, implements,
machinery, equipment, fixtures, tools and other personal property belonging to
Tenant which are or may be put upon the Premises.

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<PAGE> 6
21. HOLDING OVER. Should Tenant hold over the Premises,
or any part thereof after the expiration of the term of this Lease, unless
otherwise agreed in writing, such holding over shall constitute and be
construed as a tenancy from month to month only, at a monthly rental equal to
current market rates to be agreed upon by both Landlord and Tenant.

22. OPTION TO RENEW. Tenant may renew this Lease for a
term of three years at 95% of current market rates to be agreed upon by both
Landlord and Tenant. However, the initial annual Basic rent for the renewal
term for the 6th lease year, shall in no event be less than the annual Basic
rent paid by Tenant during the 5th lease year.

23. RENTAL ADJUSTMENT. The annual Basic Rent, and the
monthly installments thereof, shall be increased after the first year and each
and every year thereafter as follows:

1st year $246,915
June '94 - May '95 2nd year $256,792
June '95 - May '96 3rd year $267,107
June '96 - May '97 4th year $277,862
June '97 - May '98 5th year $289,055

24. SIGNS. Tenant shall have the right to install at
Tenant's expense two signs as depicted on Attachment 2. One sign shall face
I-495 and one sign shall be on the front of the building. Any additional signs
displayed on the Property (interior and exterior) will conform to all rules,
regulations and ordinances concerning signs and shall be only as approved by
Landlord and installed at Tenant's expense.

25. PARKING SPACES. Landlord shall provide Tenant with
120 parking spaces at all times on the premises and an additional 150 off-site
parking spaces from 5:30 p.m. to 10:30 p.m. on weekdays and from 9:00 a.m. to
4:00 p.m. on Saturdays and Sundays. Landlord shall designate such spaces and
they shall be within 1,000 feet of the Premises. Tenant shall be responsible
for the supervision and control of their employee and student parking to assure
that their personnel and student off-site parking is limited only to the
off-site parking areas designated by Landlord.

26. OPTION TO PURCHASE. At any time during the Lease
Term Tenant has the option, upon six (6) months advance written notice, to
purchase the Premises for cash as follows:

(a) Purchase Price - $3,100,000 during the first
year of the Lease Term and increased by four percent (4%) each year thereafter,
plus any unamortized costs of Tenant improvements based upon a ten (10) year,
straight line amortization schedule.

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<PAGE> 7
(b) Off-Site Parking - In the event Tenant
purchases the Premises, the Landlord will lease to Tenant 150 off-site parking
spaces within 1,000 feet of the Premises for use from 5:30 p.m. to 10:30 p.m.
weekdays and from 9:00 a.m. to 4:00 p.m. on Saturdays and Sundays at an annual
cost of $18,000 payable monthly, with a 100% Consumer Price Index (defined
below) increase each year after the first three (3) years of the lease. Tenant
will have the right to lease such spaces as long as Tenant occupies the
Premises. The Consumer Price Index shall mean the "Consumer Price Index for
All Urban Consumers (CPI-U), All Items, Washington, D.C., SMSA C Standard
Metropolitan Statistical Area) 1967 = 100" as issued by the Bureau of Labor
Statistics of the United States Department of Labor.

27. SUBORDINATION. This Lease is subject and subordinate
to all mortgages, deeds of trust, or other debt instruments which may now or
hereafter affect such Lease, the Building, the Property or other improvements
thereon. The foregoing provisions shall be self operative and no further
instrument of subordination shall be required by any mortgagee or other
interested party, provided, however, that in confirmation of such subordination
Tenant shall, upon request of Landlord, execute and deliver, in recordable
form, any instrument of subordination requested by Landlord, and Tenant hereby
does constitute and appoint Landlord as Tenant's attorney-in-fact to execute
any such subordination instrument on behalf of Tenant.

28. CONTINUOUS USE. Anything herein to the contrary
notwithstanding, this Lease shall be deemed in default if Tenant shall
discontinue the business referred to in Paragraph 4 herein, the Premises shall
become or appear vacant, or Tenant abandons or appears to abandon the Premises.
Under any of the aforesaid conditions the Landlord may exercise its rights as
stated in Paragraph 18 herein.

29. NO PARTNERSHIP. By execution of this Lease, Landlord
does not in any way for any purpose become a partner of Tenant in the conduct
of its business or assume, nor become subject to any responsibility or
liability therefor.

30. NOTICES. Any notice required or permitted hereunder
shall be in writing and delivered either in person against hand receipt to the
other party or other party's authorized agent, or by United States Certified
Mail Return Receipt Requested, postage fully paid, to the address set forth
hereinafter, or to such other address as either party may designate in writing
and delivered as herein provided.

Landlord: Donald F. Simpson
Alexandria Tech Center I Limited Partnership
2750 Eisenhower Avenue, Suite 102
P.O. Box 430
Alexandria, VA 22313

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<PAGE> 8
Tenant: Strayer College
1025 15th Street, N.W.
Washington, D.C. 20005
Attn: Mr. Ron K. Bailey, President

31. SEPARABILITY CLAUSE. Should any provisions of this
Lease be or become void or unenforceable, the remaining provisions hereof shall
remain in full force and effect.

32. COMPLETE AGREEMENT. This Lease contains a complete
expression of the agreement between the parties hereto.

33. APPLICABLE LAW. This Lease shall be given effect
and construed by application of the law of Virginia.

34. SECURITY DEPOSIT. Simultaneously with the entry into
this Lease by the parties hereto, the Tenant shall deposit with Landlord the
sum of Twenty Thousand Five Hundred Seventy Six and 25/100 Dollars
($20,576.25), which shall be retained by Landlord as security for Tenant's
payment of basic rent, additional rent and performance of its other obligations
under this Lease. On the occurrence of a default under this Lease, the
Landlord shall be entitled, at its sole discretion, to apply any or all of such
sum (i) in payment of any rent then due and unpaid, (ii) any expense incurred
by Landlord in curing such default, and (iii) any damages incurred by Landlord
by reason of such default. On termination of this Lease, any of such sum which
is not so applied or retained shall be returned to Tenant.

35. JURY TRIAL. The parties hereby waive the right to
trial by jury in any action, proceeding or counterclaim brought by either of
the parties hereto against the other on any matter whatsoever arising out of or
in any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises and/or any claim of injury or damage.

36. RULES AND REGULATIONS. Rules and regulations
governing the use of the Premises are set forth in Attachment 3 and
incorporated herein.

37. LANDLORD'S RIGHT OF ENTRY. Landlord and its agents
after giving Tenant reasonable notification shall have the right to enter the
Premises at any time during Tenant's business hours to inspect the Premises, to
show the Premises to prospective purchasers, tenants and mortgagees, and for
any other purpose relating to the operation of the Property and/or this Lease.
In addition, Landlord and its agents shall have the right to enter the Premises
at any time in the event of an emergency.

38. QUIET ENJOYMENT. Landlord covenants that Tenant, so
long as it complies with the terms hereof, shall peaceably and quietly hold and
enjoy the Premises for the term of this Lease.

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<PAGE> 9
39. LEASE CONTINGENCIES. This Lease is contingent upon
the following events occurring prior to April 21, 1993.

(a) Issuance of a Special Use Permit by the City
of Alexandria allowing Tenant to operate at the Premises.

(b) Issuance of approval by the State of Virginia
for Tenant to operate at the Premises.

(c) Execution of a Lease Termination Agreement by
Tenant and current landlord for existing lease obligation of approximately
5,000 square feet at the Huntington Metro, 5916-B North King Highway.

(d) Execution of a Lease Termination Agreement
between AT&T and Simpson Development Company for existing lease obligation of
the Property.

(e) Final execution of this Lease Agreement by
Tenant and Landlord.

WITNESS the hands and seals of the parties hereto as of the
day and year first above written.

STRAYER COLLEGE, INC.
TENANT:

[sig] 4/16/93
--------------------------------
PRESIDENT

ALEXANDRIA TECH CENTER I
LANDLORD:
SIMPSON DEVELOPMENT CO., INC., GENERAL PARTNER

/s/ DONALD F. SIMPSON
--------------------------------
PRESIDENT

<PAGE> 1
EXHIBIT 10.13

FIRST AMENDMENT TO AGREEMENT OF LEASE
FOR OFFICE CONDOMINIUM SPACE

THIS FIRST AMENDMENT TO AGREEMENT OF LEASE FOR OFFICE
CONDOMINIUM SPACE ( "Amendment") is made this 25th day of July, 1994, by and
between STRAYER COLLEGE, a Maryland corporation ("Tenant") and CROSS CREEK
ASSOCIATES LIMITED PARTNERSHIP ("Landlord").

WHEREAS, by virtue of that certain office Condominium Lease
dated April 22, 1991 ("Lease") Landlord leased to Tenant and Tenant leased from
Landlord approximately 12,000 rentable square feet of office space comprised of
the entire second (2nd) floor ("Premises") of the office building located at
45150 Russell Branch Parkway in Ashburn, Virginia ("Building"), as more
particularly described in said Lease;

WHEREAS, by virtue of that certain Rider No. 1 To Lease
Agreement dated April 22, 1991 ("Rider No. 1") certain provisions of the Lease
were added and/or modified, as more particularly described in said Rider No. 1;

WHEREAS, Tenant wishes to lease additional space in the
Building, extend the Term of the Lease, and obtain a purchase option to buy the
Building, and Landlord has so agreed in accordance with the terms hereinafter
stated.

NOW, THEREFORE, for and in consideration of the mutual
covenants and agreements contained herein and other good and valuable

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<PAGE> 2
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant do hereby agree as follows:

1. The term "Lease" as used hereinafter shall include and refer to all of
the terms and conditions of the Lease and Rider No. 1;

2. Any and all capitalized terms used herein and not otherwise defined
shall have the same meaning(s) as defined therefor in the Lease;

3. Effective as of the Additional Space Commencement Date (as hereinafter
defined) the Lease shall be modified as follows:

A. The word "Term" as used throughout the Lease, shall refer to the
Extended Term (as hereinafter defined);

B. The definition of "Common Expenses", as defined on Page 2, Section
1.F shall be deleted and inserted in its place and stead shall be
the following language:

"F. Common Expenses: The amount by which the Condominium
Assessment and the Management and Operating Expenses exceed
those incurred by Landlord for the Building during Fiscal
Year 1994.

F-1 Tenants Proportionate Share of Common Expenses: Tenants
Proportionate Share of Common Expenses (inclusive of
Management and Operating Expenses) is 58.33%."

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<PAGE> 3
C. The definition of "Premises", as defined on Page 4, Section 1.T
shall be deleted and inserted in its place and stead shall be the
following language:

"T. Premises: Condominium Unit Nos. 200, 201, 202, 203,
204, 205, 300, 301, 302, and 305, totaling 21,000 rentable
square feet of space, as shown on the floor plan(s)
attached hereto and made a part hereof as Exhibit A."

D. The definition of "Management and Operating Expenses" as defined on
Page 3, Section 1.R shall be deleted and inserted in its place and
stead shall be the following language:

"R. Management and Operating Expenses: All costs and
expenses incurred by Landlord each Fiscal Year during the
Term in connection with the ownership and operation of the
Premises, including, without limitation: (a) wages,
salaries and other labor costs, including taxes, insurance,
retirement, medical and other employee benefits; (b) rent
loss and such other insurance as Landlord may elect to
carry; (c) fees, charges, and other costs, including
management fees, consulting fees, legal fees, accounting
fees and fees of all independent contractors engaged by
Landlord or reasonably charged by Landlord if Landlord
performs management services in connection with the
Premises; and (d) any other expenses of any kind whatsoever
reasonably incurred by Landlord in managing, operating,
maintaining and repairing the Premises. Management and
Operating Expenses shall not include: (i) Real Estate
Taxes, (ii) payments of principal and interest on any
mortgages and any other costs associated with any
mortgages, (iii) costs of preparing, improving or altering
any space in preparation for occupancy of any new or renewal
tenant, (iv) expenses for which Landlord is

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<PAGE> 4
reimbursed or indemnified (either by an insurer, condemnor,
tenant, warrantor or otherwise) to the extent of funds
received by Landlord, (v) expenses incurred in leasing or
procuring tenants (including lease commissions, advertising
expenses and expenses of renovating space for tenants),
(vi) costs representing an amount paid to an affiliate of
Landlord which is in excess of the amount which would have
been paid in the absence of such relationship, (vii)
amounts paid to any partner, shareholder, officer, director
or executive of Landlord for salary or other compensation,
(viii) costs of services furnished to other tenants in the
Building but not made available to Tenant, (ix) costs or
expenses relating to any Ground Lease, (x) costs or
expenses incurred in connection with a transfer of any
interest in Landlord or the Condominium, or (xi) attorneys'
fees relating to any leasing or sale of the Building,
financing of the Building or enforcement of any lease in
the Building except as otherwise provided herein with
respect to defaults by Tenant under this Lease. If these
Management and Operating Expenses, as defined herein, are
not separately charged against the Premises, then the term
"Management and Operating Expenses" shall mean and refer to
Tenant's share (as defined below) of the Management and
Operating Expenses for all condominium units, convertible
space or convertible land in the Building for which
Landlord is incurring such costs and expenses. Tenant's
share shall be determined by dividing the net rental square
feet of the Premises by the net rental square feet of all
condominium units, convertible space or convertible land in
the Building for which Landlord is incurring the costs and
expenses described in this subsection. There shall be no
duplication of costs or reimbursement. It is understood
that other buildings may be developed in the Condominium
and such other buildings may share facilities and services
with the

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<PAGE> 5
Building. Management and Operating Costs shall include
that portion of all costs, expenses and disbursements to
the Building by Landlord. Management and Operating
Expenses shall include any costs associated with or
included in the Condominium Assessment."

E. The definition of "Real Estate Taxes" and "Tax Expenses" as defined
on Page 4 Section(s) 1.V and l.W respectively, shall be deleted and
inserted in their place and stead shall be the following language:

"V. Real Estate Taxes: All real estate taxes and
assessments, general or special, ordinary or extraordinary,
foreseen or unforeseen, that are assessed, levied or
imposed upon the Premises (regardless of whether such tax
or assessment affects other real property) under any
current or future taxation or assessment system or
modification of, supplement to, or substitute for such
system, whether or not based on or measured by the receipts
or revenues from the Premises, including, without
limitation, all taxes and assessments for public
improvements or any other purpose, any gross receipts or
similar taxes, any sales taxes, use taxes, business taxes
and license fees imposed upon the Landlord as owner of the
Premises (regardless of whether the same affects other real
property) or upon the rents payable hereunder, and all
reasonable expenses incurred by Landlord in obtaining or
attempting to obtain a reduction of any taxes, rates or
assessments described above, including but not limited to
legal fees. Real Estate Taxes shall not include: (i) any
taxes on Tenant's Personal Property or other tenant's
personal property, which taxes are the sole obligation of
each tenant, (ii) franchise, corporation, income or net
profits tax, unless substituted for real estate taxes

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<PAGE> 6
or imposed as additional charges in connection with the
ownership of the Premises, which may be assessed against
Landlord or the Premises or both, (iii) transfer taxes
assessed against Landlord or the payments of Landlord, and
(iv) penalties or interest on any late payments of
Landlord.

W. Tax Expenses: The amount by which the Real Estate
Taxes exceed those incurred by Landlord for the Building
during Fiscal Year 1994.

1.W.1 Tenants Proportionate Share of Real Estate Taxes:
Tenant's Proportionate Share of Real Estate Taxes is 58.33%
of the real estate taxes for Phase I of the Condominium (as
described in the condominium instruments recorded among the
land records of Loudoun County, Virginia at Deed Book 1094,
Page 553) for each fiscal or tax year.

4. The term of this First Amendment shall become effective on the date on
which Tenant accepts or takes occupancy of any portion of Condominium
Unit Nos. 300, 301, 302 or 305 which in no event shall occur later than
July 1, 1994 ("Additional Space Commencement Date"), and shall expire
on the anniversary date of the fifth (5th) Lease Year following the
Additional Space Commencement Date ("Lease Expiration Date"). The new
five (5) year Lease Term shall hereinafter be referred to as the
"Extended Term". Contemporaneously with occupancy Tenant and Landlord
shall execute a declaration in the form attached hereto as Exhibit "B"
confirming the Additional Space Commencement Date.

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<PAGE> 7
A. Section 4.A on Page 7 is hereby deleted and inserted in its place
and stead shall be the following language:

"A. Base Rent: Base Rent shall equal Two Hundred
Ninety-Eight Thousand Two Hundred and 00/100 Dollars
($298,200) per annum on the basis of Fourteen and 20/100
Dollars ($14.20) per square foot of the Premises. Tenant
shall pay Base Rent to Landlord in equal monthly
installments of Twenty Four Thousand Eight Hundred Fifty
and 00/100) Dollars ($24,850) ("Monthly Base Rent") in
advance on the first day of each and every calendar month
during the Extended Term, without notice. If the
Additional Space Commencement Date occurs on a date other
than the first day of a calendar month, Tenant shall
receive a credit equal to the Monthly Base Rent multiplied
by the number of days in said calendar month prior to the
Additional Space Commencement Date and divided by the
number of days in such month, which credit shall be applied
towards the installment of Monthly Base Rent next due
hereunder."

B. Section 12.A on Page 14 shall be deleted and inserted in its place
and stead shall be the following language:

"Services Obtained by Tenant: All electric, telephone,
cleaning and char service supplied to the Premises shall be
obtained by Tenant directly from the providers thereof and
Tenant shall pay all deposits, charges, costs and expenses
relating to the foregoing utility connections and service
directly to the providers thereof. All other services and
utilities (i.e. water and sewer) shall be provided by the
Landlord and/or Association and shall be included in
Tenant's Proportionate Share of Common Expenses.
Notwithstanding the foregoing, Tenant shall have the
Premises and the bathrooms servicing the Premises cleaned
daily, including

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<PAGE> 8
weekends. Tenant hereby indemnifies and holds Landlord
harmless from any damage, losses, costs, expenses,
liability and claims that may be made by such companies or
utilities which may arise from Tenant's use of such
utilities and services for failure to pay any charges for
such use.

Failure to Provide Services: Landlord and/or the
Associations' failure to provide any services required
hereunder due to Unavoidable Delays shall not render
Landlord or the Association liable for damages to either
person or property, nor be construed as an eviction of
Tenant, nor work as an abatement of any portion of Rent,
nor relieve Tenant from fulfillment of any covenant or
agreement hereof, provided that (i) Landlord or the
Association shall use reasonable diligence to promptly cure
any such failure, and (ii) where such failure to provide
such services causes the Premises to be not reasonably
usable for Tenant's business for more than ten (10) days,
then commencing on the date which is eleven (11) days after
the commencement of such failure and continuing until the
date on which the Premises are again reasonably usable for
the operation of Tenant's business, Tenant shall be
entitled to an abatement of Rent. In the event Landlord or
the Association denies Tenant access to the Premises after
such ten (10) day period, such abatement shall also apply
to the period during which Tenant has been denied access by
Landlord or the Association. In the event Landlord or the
Associations' failure to provide any of the foregoing
services is not due to an Unavoidable Delay, such failure
shall not render Landlord or the Association liable for
damages to either person or property, nor be construed as
an eviction of Tenant, nor work as an abatement of any
portion of Rent, nor relieve Tenant from fulfillment of any
covenant or agreement hereof, provided that (a) Landlord or
the Association uses reasonable

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<PAGE> 9
diligence to promptly cure any such failure, and (b) where
such failure to provide services causes the Premises to be
not reasonably usable for Tenant's business for more than
five (5) days, then commencing on the date which is six (6)
days after the commencement of such failure and continuing
until the date on which the Premises are again reasonably
usable for the operation of Tenant's business, Tenant shall
be entitled to an abatement of Rent. In the event Landlord
or the Association denies Tenant access to the Premises
after such five (5) day period, such abatement shall also
apply to the period during which Tenant has been denied
access by Landlord or the Association.

Conservation: Tenant hereby agrees to comply with all
energy conservation procedures, controls and requirements
instituted by Landlord and/or the Association pursuant to
any government regulations. Institution by Landlord and/or
the Association of such controls and requirements shall not
entitle Tenant to terminate this Lease or to an abatement
of any Rent payable hereunder."

C. Section 29 on Page 30 is hereby deleted and inserted in its place
and stead shall be the following language:

"Brokers: Landlord and Tenant each represents and
warrants to the other that, except as hereinafter set
forth, neither of them has employed any broker in procuring
or carrying on any negotiations relating to this First
Amendment. Landlord and Tenant shall indemnify and hold
each other harmless from any loss, claim or damage relating
to the breach of the foregoing representation and
warranty."

D. The following language is hereby deleted from Section 31:

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<PAGE> 10
"with a copy to:
David K. Weiss
Weicon, Inc.
973-C Russell Avenue
Gaithersburg, MD 20879"

E. In addition to those Sections deleted hereinbefore, the following
Lease provisions shall be inapplicable during the Extended Term:

Section 3, Work Agreement
Section 5.A.
Section 5.C. (i)
Section 33, Lender Approval
Exhibit C, Office Space Work Agreement
Paragraph 1 of Rider No. 1
Paragraph 4 of Rider No. 1
Paragraph 5 of Rider No. 1
Paragraph 6 of Rider No. 1
Paragraph 7 of Rider No. 1

5. Paragraph 2 of Rider No. 1 is hereby amended to provide that Landlord
shall permit Tenant to affix, at the sole cost and expense of Tenant,
two (2) identification signs on the northwest corner of the Building.
One sign shall be affixed to the north face of the Building, and the
other sign shall be affixed to the west face of the Building, in the
locations shown on Exhibit 1 attached to Rider No. 1. Said signs shall
be constructed at Tenant's sole cost and expense in accordance with the
specifications attached hereto as Exhibit D and incorporated herein by
reference.

6. Subject to Force Majeure (as hereinafter defined), on or before
September 15, 1994, Landlord shall complete construction of a parking
lot ("Parking Lot") on the vacant land behind and adjacent

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<PAGE> 11
to the Building and as shown on Exhibit C attached hereto and made a
part hereof. The Parking Lot shall contain approximately 100 striped
parking spaces, two (2) of which shall be handicap accessible and will
be constructed in accordance with Loudoun County, Virginia requirements
and approvals. Landlord shall contribute the lesser of (i) 50% of the
total construction costs of the Parking Lot or (ii) $40,000 (including
but not limited to the cost of design, permits, lighting, landscape and
construction); and Tenant shall bear the remaining cost. The method of
payment for the Parking Lot, the selection of a general contractor, and
the estimated final cost of construction of the Parking Lot are
memorialized in Exhibit H attached to this Amendment and incorporated
herein by reference. Once constructed, said Parking Lot shall be
available for Tenant's use during the Extended Term of this Lease.

The term "Force Majeure" as used herein shall refer to and mean an
unavoidable delay, beyond the control of Landlord, including but not
limited to, delays imposed by local, state or federal governmental
requirements, and weather conditions.

7. Tenant hereby acknowledges that it is currently in occupancy of a
portion of the Premises pursuant to the terms of the Lease and it has
inspected the entire Premises (including but not limited to Condominium
Unit Numbers 300, 301, 302 and 305) and shall accept the same "as is" on
the Additional Space Commencement Date, provided it remains in its
current condition, and that Landlord

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<PAGE> 12
shall have no obligation whatsoever, to improve, alter or otherwise
modify the Premises in any way whatsoever on behalf of Tenant before or
during the Term or Extended Term. Any of Landlord's materials or
supplies located within Condominium Unit Numbers 300, 301, 302 and 305
on the Additional Space Commencement Date shall become property of the
Tenant.

8. Landlord agrees to provide repairs and upgrades to the heating,
ventilation, and air conditioning ("HVAC") system in the Premises in
accordance with that letter dated June 17, 1994, a copy of which is
attached hereto as Exhibit "E" and incorporated herein by reference;
provided, however, that Landlord shall maintain dry bulb interior
temperatures in the general occupancy portions of the Building and
Premises within the range of 70 to 78 degrees Fahrenheit, with a
relative humidity of 55 percent or less, for outdoor ambient
temperatures of between 14 degrees Fahrenheit dry bulb Winter and 93
degrees Fahrenheit dry bulb/75 degrees Fahrenheit wet bulb Summer per
ASHRAE Table 1 for Metropolitan Washington, D.C. Said repairs and
upgrades shall be commenced upon execution of this Amendment and
thereafter pursued diligently to completion.

9. A. Provided Tenant is not in default under the Lease, Tenant shall
have an option to purchase ("Purchase Option") the Property (as
hereinafter defined). The Purchase Option shall be operable during
the first three (3) Lease Years of the

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<PAGE> 13
Extended Term only and shall thereafter be null and void unless
otherwise agreed to in writing by Landlord. The purchase price
("Purchase Price") of the Property during the three (3) year
Purchase Option period ("Purchase Option Period") shall be as set
forth in the following Purchase Price Schedule:

Purchase Price Schedule

<TABLE>
<CAPTION>
Time Period Purchase Price
----------- --------------
<S> <C> <C>
1. July 1, 1994 - June 30, 1995 $3,000,000
2. July 1, 1995 - June 30, 1996 $3,100,000
3. July 1, 1996 - June 30, 1997 $3,200,000
</TABLE>

B. Settlement of the purchase of the Property by Tenant must occur on
or before the last day of the time period set forth in the
Purchase Price Schedule above, and Tenant must deliver notice to
Landlord of his intent to purchase at least ninety (90) days prior
to the date of settlement in order for the prescribed purchase
price to be applicable. For example, if Tenant notifies Landlord
of its intent to exercise the Purchase Option in September, 1995,
but the actual settlement occurs on July 15, 1996, the Purchase
Price will be $3,200,000.00, not $3,100,000.00. Alternatively, if
Tenant notifies Landlord of its intent to exercise the Purchase
Option on May 15, 1995, but the actual settlement of the purchase
occurs on August 31, 1995 (taking into consideration the ninety
(90) day notice period), then the purchase price will be
$3,100,000.00, not $3,000,000.00.

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<PAGE> 14
C. The "Property" is hereby defined as follows:

(a) 33,000 leasable square feet of office condominium space,
consisting of Condominium Unit Numbers 100, 101, 102, 103,
200, 201, 202, 203, 204, 205, 300, 301, 302, and 305, Phase
I, Cross Creek Office Condominium, and all limited common
elements and other rights and privileges appurtenant
thereto, including but not limited to retail condominium
space, surrounding common areas and Building structure; and

(b) approximately five (5) acres of adjacent land on which the
Parking Lot will be constructed, as said land is more
particularly described in Exhibit F attached hereto and
incorporated herein by reference.

D. In the event Landlord receives a bona fide third party offer to
purchase the Property, during the Purchase Option Period which
Landlord wishes to accept, Tenant, provided it is not in default
under the Lease, shall have a right of first refusal ("Right Of
First Refusal To Purchase") to purchase the Property, at the
lesser of (i) the Purchase Price set forth in the Purchase Price
Schedule in 9.A. above, or (ii) the third party offer. The Right
Of First Refusal To Purchase shall be exercised by Tenant within
ten (10) days of receipt of notice from Landlord that it has
received a bona fide third party offer to purchase the Property,
("Landlord's Notice"). In the event Tenant exercises the Right Of
First Refusal To Purchase, settlement of the purchase shall occur
no later than ninety (90) days from the date of Landlord's Notice.

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<PAGE> 15
E. Regardless of whether Tenant purchases the Property by virtue of
the Right Of First Refusal To Purchase or by exercising the
Purchase Option, Landlord and Tenant agree that all current real
estate taxes, including any special taxes assessed for
transportation district improvements, rents, utilities and other
applicable charges for the Property shall be apportioned and
prorated as of the date of settlement hereunder. Landlord shall
bear the cost of preparation of the deed of conveyance, Virginia
State grantor's tax and all charges or assessments of any kind or
nature that have been levied or assessed against the Property for
the time period prior to settlement. All recording transfer taxes
(state and county tax stamps), title examination and title
insurance premium shall be paid by Tenant. Landlord and Tenant
shall each pay their own respective attorneys' fees. Tenant shall
purchase the Property in its then "as is condition".

F. Landlord covenants and warrants that, as of the date hereof, the
Landlord is the sole and true and lawful owner of the Property.
The Property shall be sold, conveyed and transferred to Tenant by
general warranty deed with English covenants of title, free of all
claims, liens, encumbrances, indebtedness, leasing commissions,
assessments and charges of any kind or nature with the exception
of leases existing at the date of execution of this Amendment and
subsequent third party leases entered into by the Landlord. Title
shall be

15
<PAGE> 16
good of record and in fact, marketable and fully insurable at
standard rates by a title insurance company to be chosen by
Tenant, and shall be subject only to those exceptions noted in
Schedule B, Section 2 of that title insurance commitment issued by
First American Title Insurance Company, and identified as
commitment number TA-613-94/FA 23418, a copy of which is attached
hereto as Exhibit "F" and incorporated herein by reference (the
"Permitted Exceptions"). The Property shall be sold and conveyed
subject to no rights of ways, encroachments, easements, covenants,
conditions or restrictions, recorded or unrecorded, other than the
Permitted Exceptions.

At any time during the term of this Amendment that the Tenant, at
its sole discretion, determines is appropriate, the Tenant may
cause an examination of title of the Property to be commenced (the
"Title Report"). Thereafter, but in no event later than thirty
(30) days prior to settlement, the Tenant shall deliver a copy of
the title report to the Landlord, review the Title Report and
advise Landlord in writing (hereinafter referred to as the "Title
Notice") of any encumbrances or exceptions to title which are not
Permitted Exceptions (hereinafter referred to as "Objections").
Landlord shall advise Tenant in writing within ten (10) days of
receipt of the Title Notice of any Objections which Landlord
determines it will be unwilling or

16
<PAGE> 17
unable to cure at or prior to settlement; all other Objections
shall be cured by Landlord, at Landlord's expense, at or prior to
settlement.

Deeds of Trust, judgments, or other liens against the Property
that can be cured by payment of money, shall be first paid and
released of record from Landlord's proceeds at settlement (if not
sooner paid and released of record by Landlord), utilizing the
proceeds paid by the Tenant at settlement.

In the event Landlord notifies Tenant that it will be unable or
unwilling to cure any such Objections, Tenant thereafter shall
have the right to terminate the provisions of this Lease upon
ninety (90) days prior notice to Landlord; provided, however, that
in no event shall the effective date for any such termination of
this lease by Tenant be prior to August 31, 1996.

The state of title at settlement shall be the same as is disclosed
by the Title Report. Upon the Landlord's and Tenant's execution
of this Amendment, Landlord shall not execute, grant or record any
easements, covenants, conditions, or restrictions with respect to
the Property, nor shall Landlord expand the condominium regime for
the Property to subject any additional land or buildings to said

<PAGE> 18
condominium regime during the Purchase Option Period, without the
Tenant's prior written consent, which consent shall not
unreasonably be withheld, conditioned or delayed. Landlord shall
grant and convey to the Tenant all of Landlord's right, interest
and title to any roads, rights of way or easements (whether
abutting the Property or otherwise being off site) necessary to
provide access to and from or permit the use and enjoyment of the
Property.

G. If Landlord shall fail to perform any of its obligations under the
Purchase Option, Tenant shall be entitled to (i) maintain an
action against Landlord for specific performance, or (ii)
terminate this Lease, effective upon a date not prior to August
31, 1996. In the event Landlord has taken any actions which would
render specific performance impossible, but only in such event,
Tenant shall be entitled to maintain an action against Landlord to
recover damages.

10. A. Landlord hereby represents and warrants to Tenant that, to the
best of Landlord's knowledge and as of the date hereof, other than
the Purchase Option granted to Tenant hereinbefore, there exist no
contracts, rights of first refusal, or other options to purchase
the Property in favor of any third party, and further that
Landlord will not enter into any contract to sell the Property or
extend a right of first refusal or option to purchase the Property
to any third

<PAGE> 19
party during the Purchase option Period, subject to the terms
hereof.

B. Landlord, as the sole owner of the Property, has a good,
marketable, record title to the Property and has the full right
and power to sell, sign, convey and transfer the Property.
Landlord shall provide Tenant with proper documentation as Tenant
may reasonably request confirming that Cross Creek Associates
Limited Partnership is validly existing and organized as a
Virginia limited partnership. The Property, including all
personal property being conveyed hereunder, will be conveyed free
and clear of all liens and encumbrances other than the Permitted
Exceptions simultaneously with settlement. Landlord has no
knowledge of any legal or equitable interest in the Property owned
or claimed by any other person, firm or corporation other than
interests specifically disclosed or permitted herein. All bills
and claims for labor performed and materials, supplies, or
services furnished to or for the benefit of the Property prior to
settlement shall be paid in full, except for proratable expenses
as set forth herein, and there shall be no mechanics or
materialman's liens (filed or perfected) on or affecting the
Property or part thereof.

C. A current rent roll for the Property, including each Tenant's
name, buildings, suite number, monthly rent, percentage rent

<PAGE> 20

and/or rent escalation terms, reimbursement of real state taxes
and/or other operating costs, security deposit, date of receipt of
security deposit (if interest will be due thereon), expiration
date, current delinquencies, renewal and/or expansion options (if
any), is attached hereto as Exhibit G and incorporated herein by
this reference. Each of the leases listed on Exhibit G is in
force as of the date hereof and constitutes the entire agreement
with each of such tenants. Except for those security deposits and
interest thereon (if required by agreement) delivered by Landlord
at settlement, no tenant or occupant of any portion of the
Property is entitled to any rebate, concession, or other benefit,
other than as specified in leases in existence as of the date of
execution of this Agreement. Except as shown on the rent roll
attached as Exhibit G, no such tenant or occupant shall have paid
rent, additional rent, or any service or other charge more than
thirty days in advance. Landlord hereby indemnifies and agrees to
hold harmless Tenant of and from any claim, lawsuit or expense,
including reasonable attorneys' fees, with respect to any
obligation to any tenant or occupant occurring prior to the date
of settlement under the Purchase Option. Not less than five (5)
business days prior to the settlement, Landlord shall deliver to
Tenant and to Tenant's lender if required, from each tenant and/or
occupant of the Property, a fully executed complete estoppel
letter. Said letter shall not be dated

<PAGE> 21
more than thirty (30) days prior to settlement. At settlement
Landlord shall deliver to Tenant Landlord's warranty that there
has been no adverse change in the information provided in the
estoppel letter and, for any tenant or occupant for whom no
estoppel letter could be obtained, Landlord's own certification
with respect to the information requested therein. Landlord shall
indemnify and hold Tenant harmless against and from all losses,
costs and expenses including reasonable attorneys' fees, arising
out of any discrepancy between (i) the written provisions of any
leases for the Property, including any amendments to such leases
entered into after the date of this Amendment, or Landlord
certifications or warranties, and (ii) the actual facts concerning
such leases.

D. To the best of Landlord's knowledge, as of the date of execution
hereof, there are no judgments, actions or proceedings pending in
any court against the Property or against Landlord in connection
with the Property.

E. To the best of Landlord's knowledge, as of the date of execution
hereof, there are no threatened or pending condemnation, eminent
domain or annexation proceedings or other litigation or
proceedings against or affecting any part of the Property.

<PAGE> 22
F. At settlement Landlord shall execute and deliver to Tenant a
certificate confirming the accuracy and completeness of all of
Landlord's representations and warranties set forth herein in all
material respects as of the settlement date.

11. During the Purchase Option Period, provided Tenant is not in default
under the Lease, Tenant shall have a right of first refusal to lease
any space which is currently vacant at the Property or any space which
may become available at the Property each and every time it becomes
available ("Right Of First Refusal To Lease"), within ten (10) days of
receipt of notice from Landlord specifying the terms under which
Landlord will lease the space to Tenant. In the event Tenant does not
exercise its Right Of First Refusal To Lease within such ten (10) day
period, Landlord shall be free to enter into a lease agreement for said
space with a third party and Tenant shall have no further rights with
respect to said space unless it becomes available again during the
Purchase Option Period. In the event Tenant exercises its Right Of
First Refusal To Lease, Landlord and Tenant, within ten (10) days of
Tenant's notice to Landlord of its intent to exercise said option,
shall enter into an amendment to the Lease memorializing the terms
under which Tenant will lease the space.

12. Landlord and Tenant hereby represent to one another that the
person(s) executing this First Amendment on their behalf has the
requisite power and authority to so bind them to the terms hereof.

<PAGE> 23
13. Except as expressly modified herein, all other terms and
conditions of the Lease shall continue in full force and effect
throughout the Extended Term.

(Signatures on Following Page)

<PAGE> 24
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment as of the day and year first hereinabove written.

ATTEST: LANDLORD:

CROSS CREEK ASSOCIATES LIMITED PARTNERSHIP

By: JBG Real Estate Associates General Partner

[sig] By: /s/ MICHAEL J. GLOSSERMAN
- ---------------------- ----------------------------------------
Michael J. Glosserman
Executive Vice President

ATTEST: TENANT:

STRAYER COLLEGE, a Maryland corporation

[sig] 7/27/94 By: [sig]
- ---------------------- ----------------------------------------

Printed Name: 7/22/94
------------------------------

Title: President
-------------------------------------

<PAGE> 1
EXHIBIT 23.02

[COOPERS & LYBRAND LETTERHEAD]

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Registration Statement on Amendment
No. 3 to Form S-1 (No. 333-3967) of our report dated May 15, 1996, on our audit
of the balance sheet of Strayer Education, Inc. as of May 15, 1996, and our
report dated May 14, 1996, on our audits of the combined balance sheets of
Strayer College, Inc. and Affiliate as of December 31, 1995 and 1994, and the
related combined statements of income, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995. We also consent
to the reference to our firm under the caption "Experts".

Coopers & Lybrand L.L.P.

Washington D.C.
July 16, 1996