Strayer Education Inc.(STRA) is a prominent player in the for-profit post-secondary education industry. The company's sustained effort to expand educational programs and open new campuses has boosted enrollments and its top line.

Total revenue for third-quarter 2010 came in at $147.6 million, slightly ahead of the Zacks Consensus Revenue Estimate of $146 million, but grew 29% from the prior-year quarter, buoyed by a rise in enrollment and a 5% increase in tuition fees, effective January 2010.

Strayer Education also portrays a healthy debt-free balance sheet, and is actively managing its capital, returning much of its free cash to shareholders via share repurchases and dividends.

However, what matters is the decelerating growth in enrollments. After increasing 22% in second-quarter 2010, the rate of growth in campus-based students dropped to 11% in the third quarter. Moreover, the rate of growth in online students fell to 18%, following a 31% increase in the previous quarter. The company also informed that new student enrollment dropped 2%.

The company derives a major portion of its revenue from federal student financial aid programs, the Title IV programs. The education institutions are also under the scanner due to the rise in the default rate of student loans.

Given the pros and cons, we prefer to be ‘Neutral' on the stock. However, Strayer Education holds a Zacks #5 Rank, which translates into a short-term ‘Strong Sell' rating.