Toronto, ON, September 5, 2007 – Student Transportation of Canada (“STC”), an operating subsidiary of Student Transportation of America (“STA”) (TSX: STB), announced that it has entered into an agreement to acquire the Elliott Coach Lines group of companies, a local school bus operator based in Guelph, Ontario. Elliott Coach Lines (“Elliott”) will add more than 230 vehicles, Cdn $12 million in annualized revenue and three locations to STC’s Ontario operations. Closing is expected to occur before close of business September 6, 2007. While the purchase price was not disclosed, management expects the deal to be immediately accretive.

“This is a great acquisition and increases our Canadian dollar operating cash flows as well as adds to our regional density outside the greater Toronto area. It also strengthens our position for future growth in Ontario and beyond,” said Denis J. Gallagher, Chairman and Chief Executive Officer of STC. “We are very pleased that the Elliott companies, after 50 years of quality service, have partnered with STC and we look forward to continuing the tradition of service excellence they have been providing in the Wellington County area. With the start of the new school season underway, we are pleased to have such a fine operation fit so well with our dedicated group of drivers,” added Mr. Gallagher.

Alluence Capital Advisors Inc. based in Mississauga, Ontario assisted the Company with the transaction.

Profile

Student Transportation is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school transportation and management company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 4,500 school vehicles in North America. For more information, please visit www.sta-ips.com.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws, which reflects the expectations of management regarding STA’s results of operations, expense levels, cost of capital, financial leverage, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the STA’s growth strategy and cash distributions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “track”, “targeted”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions suggesting future outcomes or events. These forward looking statements reflect STA’s current expectations regarding anticipated future events, results, circumstances, performance or expectations, including the acquisition of notes under the Exchange Offer, that are not historical facts. Forward looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at which or by the performance or results will be achieved. A number of factors could cause our actual results to differ materially from the results discussed, expressed or implied in any forward-looking statement made by us or on our behalf, including, but not limited to, the acquisition of less than a significant number of notes under the Exchange Offer and the factors discussed under “Risk Factors” in our Annual Information Form. These forward looking statements are made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

For more information contact:

Denis J. Gallagher
Chairman and Chief Executive Officer
Phone: (732) 280-4200
Fax: (732) 280-4213

Patrick J. Walker
Chief Financial Officer
Phone (732) 280-4200
Fax: (732) 280-4213

Keith P. Engelbert
Director of Investor Relations
Phone: (732) 280-4200
Fax: (732) 280-4213

[email protected]