TORONTO, Jul 2, 2008 (Canada NewsWire via COMTEX News Network) —
Expansion to Southwestern Ontario Increases Canadian Dollar Cash Flow,

Adds 200 Vehicles, Fuel and Currency Protection

Student Transportation of Canada (“STC”), an operating subsidiary of Student Transportation of America (“STA”) (TSX: STB), today announced that it has entered into an agreement to acquire Elgie Bus Lines Limited, a local school bus operator based in London, Ontario. Management expects the deal to be immediately accretive to shareholders of its common stock. The closing is contingent upon customer consent to the transaction which the parties expect shortly.

Elgie will add more than 200 vehicles and four locations to STC’s Ontario operations, and C$8.2 million in annual revenue for the upcoming fiscal year. The contract agreements with its school board customers provide for a revenue increase for the current year and a fuel cost mitigation provision.
Recently, the Ontario Ministry of Education announced a grant to school boards for assistance with higher fuel costs incurred in the 2007-2008 school year.

“This is another very good strategic acquisition for us in Ontario,” said Denis J. Gallagher, chairman and CEO of STC. “We continue to expand our footprint in the province as we open up a new service area in southwestern Ontario. The acquisition increases our Canadian dollar cash flow and further increases our natural currency hedge, which in addition to fuel mitigation, has been a strategic objective of ours. Almost all of the new business we’ve added this year in Canada and the U.S. includes fuel protection or 100 percent customer-paid fuel.

“The Elgie family has served the greater London area with outstanding service and dedication for over 55 years. We are pleased to welcome Brad Elgie as he joins our management team
and the entire team of drivers, mechanics and all other key staff members to our STC family of companies. We look forward to working with them and continuing the tradition of service excellence they have developed,” Gallagher said.

Once completed, Elgie will be the company’s eighth acquisition since its IPO, increasing its Canadian operations to more than 1,200 vehicles and nearly C$50 million in annualized revenue. The Company plans to utilize availability under its senior credit facility, recently created with the proceeds of the common share private placement offerings completed in April 2008, to fund the acquisition.

Alluence Capital Advisors Inc., based in Mississauga, Ontario, acted as financial advisors for the company.

About Student Transportation

Founded in 1997, Student Transportation is the fourth-largest provider of school bus transportation
services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school bus transportation company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and operates more than 5,400 school vehicles in North America. For more information, please visit www.rideSTA.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, which 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 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.

SOURCE: Student Transportation of America Ltd.

SOURCE: Student Transportation of America ULC

MEDIA CONTACT: Lynette Viviani, (973) 968-7929 office, (973) 534-1004 mobile,
[email protected]; INVESTOR CONTACTS: Student Transportation of America Ltd.,
Denis J. Gallagher, Chairman and Chief Executive Officer, (732) 280-4200, (732)
280-4213 (FAX); Patrick J. Walker, Executive Vice President and Chief Financial
Officer, (732) 280-4200, (732) 280-4213 (FAX); Keith P. Engelbert, Director of
Investor Relations, (732) 280-4200, (732) 280-4213 (FAX), Email:
[email protected]; Website: www.rideSTA.com

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