Toronto, ON, July 12, 2006 – Student Transportation of Canada (STC), an operating subsidiary of Student Transportation of America (TSX: STB.UN), announced it has acquired Simcoe Coach Lines Ltd., a local school bus operator based in Sutton, Ontario. The acquisition will add more than 110 vehicles and Cdn $5 million in annual revenue and the Company expects the deal to be accretive to cash flow in fiscal year 2007, which began July 1, 2006.

“This is a strategic acquisition that marks our fourth in the province and builds regional density. It positions us to take advantage of the growth being experienced in the rural and suburban areas north of Toronto,” said David White President and Chief Operating Officer of Student Transportation. “The addition of Simcoe’s operations increases our presence in Ontario, as we now have operations in the Waterloo, York Region and Peterborough areas.” The contract with the York Region School Consortium includes a cap on the price of fuel.

Murray Walker, owner of Simcoe Coach Lines stated, “We are pleased that Simcoe Coach Lines Ltd. has become part of this well-run family of companies. We have known the Student Transportation management team for many years and we are confident they will continue the outstanding service we have provided to our communities for the past 45 years.”

The Company said it will draw on its unused credit facility that was paid off with the recently completed $60 million new capital raise to fund the acquisition. The company expects annualized contracted revenues for its Canadian operations to be in excess of C$13 million dollars for upcoming school year.

About Student Transportation

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 bus transportation company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 4000 school vehicles in Canada and the US. 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

David White
President and Chief Operating 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]