Toronto, ON, May 23, 2006 – Student Transportation of America Ltd. (TSX: STB.UN) announced that it’s recent acquisition of Positive Connections, Inc which closed on May 1st, 2006 in Illinois, has been awarded two additional contracts for service commencing in September, 2006. In addition, the Company said it was awarded a new five year contract in New Hampshire which includes a 100 per cent customer paid fuel provision. The three contracts will add approximately US $3 million in annual revenues and will be accretive to the Company.

“We are very pleased to be expanding in Illinois where we recently closed the Positive Connections acquisition. The contracts are tuck-ins to current locations and in most cases can be served with existing vehicles,” said Denis J. Gallagher, Chairman and CEO. “These bid wins are further examples of our ability to execute on our continued growth strategy of building regional density while mitigating fuel costs. We will continue to view accretive opportunities to expand our operations throughout North America that will allow us to increase cash available for distributions.”

The first of two contracts in Illinois is a three-year agreement that is estimated to generate annual revenue in excess of $800,000 and includes favourable annual rate increases. It will be serviced primarily with existing vehicles, and therefore will require minimal capital expenditures. The second bid win in Illinois is expected to generate annual revenue of approximately $450,000 and has a three-year term with a two-year option. The contract also features a fixed rate cap on the price of fuel. The acquisition of Positive Connections, Inc was the Company’s first in the Mid West region.

The contract win in New Hampshire adds over $1.7 million in annual revenue with increases in subsequent years. It includes a 100 per cent customer paid fuel provision.

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 4,000 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 the Issuer’s and Company’s results of operations, expense levels, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the Company’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 the Company’s current expectations regarding anticipated future events, results, circumstances, performance or expectations 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 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]