Student Transportation of America Ltd. and Student Transportation of America ULC declare May 2008 distribution

TORONTO, May 21, 2008 (Canada NewsWire via COMTEX News Network) —
/NOT FOR RELEASE OVER US NEWSWIRE SERVICES/

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 a cash payment of C $0.09125000 per income participating security (“IPS”) of the Issuer will be payable on June 16, 2008 to holders of record of IPSs at the close of business on May 31, 2008. Further, STA Ltd. also announced that a cash dividend payment of C $0.04636833 per share on common shares issued separately from IPSs will also be payable on June 16, 2008 to holders of record at the close of business on May 31, 2008.

Each IPS consists of one common share of STA Ltd. and C $3.847 principal amount of 14 per cent subordinated notes of STA ULC, a wholly-owned subsidiary of STA Ltd. The IPSs trade on the Toronto Stock Exchange under the symbol
STB.UN. The total payment of $0.09125000 per IPS reflects a cash dividend of $0.04636833 per common share and an interest payment of $0.04488167 per IPS for the period from May 1 to May 31, 2008.

Student Transportation of America 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.

For clarity, with respect to any holders that hold common shares of STA Ltd. (TSX: STB) and/or subordinated notes of STA ULC (TSX: STB.DB) separately (as opposed to in the form of an IPS), the payment will be a cash dividend of $0.04636833 per common share and a cash interest payment of $0.04488167 per C $3.847 of subordinate note.

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 currently operates more than 5,000 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.

SOURCE: Student Transportation of America Ltd.

SOURCE: Student Transportation of America ULC

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: kengelbert@rideSTA.com, Website:
www.rideSTA.com

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