Barrie, ON (July 21, 2009) – Student Transportation of America Ltd. (“STA Ltd.”) and Student Transportation of America ULC (“STA ULC”, and together with STA Ltd., the “Issuer”) (TSX: STB, STB.UN) today announced that it will pay on August 17, 2009 to holders of record at the close of business on July 31, 2009 a cash dividend payment of C$0.04636833 per share on common shares held separately from IPSs, a cash payment of C$0.09125000 per income participating security (“IPS”) and a cash interest payment of C$0.04488167 per C$3.847 of subordinate notes (the “Notes”) of STA ULC held separately from IPSs.

STA Ltd. designates these dividends to be “eligible dividends” pursuant to subsection 89(14) of the Income Tax Act (Canada) and its equivalent in any provinces of Canada.

The company previously announced that it will no longer list the IPSs (TSX: STB.UN) on the Toronto Stock Exchange (“TSX”) after the close of business on July 31, 2009. Each IPS is comprised of one common share of STA Ltd. and C$3.847 principal amount of 14% subordinated notes of STA ULC. STA Ltd. also announced the listing of the Notes on the TSX effective August 4, 2009 under the symbol STB.DB. The common shares trade on the TSX under the symbol STB.

About Student Transportation

Founded in 1997, Student Transportation is the third-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 6,300 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 Student Transportation of America Ltd.’s, Student Transportation of America ULC’s and Student Transportation of America Holdings, Inc.’s (the “Company”) 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”, “could”, “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.

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