Sec Form 4 Filing - Rausch Elizabeth M @ CAPELLA EDUCATION CO - 2007-05-16

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person Rausch Elizabeth M 2. Issuer Name and Ticker or Trading Symbol CAPELLA EDUCATION CO [ CPLA] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) VP, Human Resources (Last) (First) (Middle) 225 SOUTH 6TH STREET, 9TH FLOOR 3. Date of Earliest Transaction (MM/DD/YY) 05/16/2007 (Street) MINEAPOLIS, MN55402 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 05/16/2007 M 6,553 A $ 11.71 11,049 D Common Stock 05/16/2007 M 5,002 A $ 11.92 16,051 D Common Stock 05/16/2007 M 2,272 A $ 17.72 18,323 D Common Stock 05/16/2007 M 1,221 A $ 20 19,544 D Common Stock 05/16/2007 M 12,833 A $ 20 32,377 D Common Stock 05/16/2007 M 20,000 A $ 4.5 52,377 D Common Stock 05/16/2007 S 52,377 D $ 34.38 0 D Common Stock 2,793 I By ESOP ( 1 )

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Stock Option (right to buy) $ 11.71 05/16/2007 M 6,553 ( 2 ) 08/25/2012 Common Stock 6,553 $ 0 0 D Stock Option (right to buy) $ 11.92 05/16/2007 M 5,002 ( 3 ) 10/22/2013 Common Stock 5,002 $ 0 1,668 D Stock Option (right to buy) $ 17.72 05/16/2007 M 2,272 ( 4 ) 07/27/2014 Common Stock 2,272 $ 0 2,273 D Stock Option (right to buy) $ 20 05/16/2007 M 1,221 ( 5 ) 08/11/2015 Common Stock 1,221 $ 0 3,665 D Stock Option (right to buy) $ 20 05/16/2007 M 12,833 02/13/2007 02/14/2016 Common Stock 12,833 $ 0 0 D Stock Option (right to buy) $ 4.5 05/16/2007 M 20,000 ( 6 ) 10/21/2009 Common Stock 20,000 $ 0 0 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Rausch Elizabeth M 225 SOUTH 6TH STREET, 9TH FLOOR MINEAPOLIS, MN55402 VP, Human Resources Signatures Erik J. Romslo, as attorney-in-fact for Elizabeth M. Rausch 05/17/2007 Signature of Reporting Person Date

Explanation of Responses:

( 1 )As last reported on March 6, 2007 ( 2 )Exercisable as to 1638 shares on each of August 26, 2003, August 26, 2004, August 26, 2005 and as to 1639 shares on August 26, 2006. ( 3 )Exercisable as to 1667 shares on October 23, 2004, 1668 shares on October 23, 2005, 1667 shares on October 23, 2006 and 1668 shares on October 23, 2007. ( 4 )Exercisable as to 1136 shares on each of July 28, 2005, July 28, 2006, July 28, 2007 and 1137 shares on July 28, 2008. ( 5 )Exercisable as to 1221 shares on August 12, 2006, 1222 shares on August 12, 2007, 1221 shares on August 12, 2008 and 1222 shares on August 12, 2009. ( 6 )Exercisable as to 5000 shares on each of October 22, 2000, October 22, 2001, October 22, 2002 and October 22, 2003.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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