Five-Year, $40 Million Contracts Increase Regional Density in New England;
Two New School Districts to Provide 100% of Fuel

TORONTO (June 2, 2008) Student Transportation of America, Ltd. (STA),
(TSX: STB, STB.UN) announced it has been awarded new contracts to provide school transportation services to students of the Danbury and Guilford school districts in Connecticut plus a new five-year contract in Milton, Vermont, that tucks into the company’s existing facility. The two five-year Connecticut contracts, commencing this July, will generate approximately $7 million in additional revenue per year and over $36 million over the life of the contract.

All three contracts were awarded over the incumbent service provider First Student. The Connecticut contracts include provisions for the school districts to provide 100 percent of the fuel required while the Vermont contract includes a fuel cap. Through these partnerships, the districts maintain full control in negotiating fuel prices and, in turn, STA is able to provide competitive bids that ensure the districts will receive the highest levels of service.

STA will add 165 vehicles to its fleet to serve the three new customers. The company already serves a number of other school districts in both states.

“We had a targeted program for growth this year that concentrated on contracts where customers would partner with us in terms of fuel protection or escalation clauses,” said STA Chairman and CEO Denis J Gallagher. “These are three good contracts that provide great fuel protection and add to our regional density in New England where we have a great team and a reputation for safe, reliable service.”

In addition to the two Connecticut contracts, STA announced in March it had been awarded a five-year contract totaling $8.4 million over the term by the Kearsarge Regional School District in New Hampshire which also included a provision for the school district to provide 100 percent of the fuel beginning this July.

“All these new contracts complement our existing business in New England, have good margins and eliminate the uncertainty of fuel costs which has been a strategic objective of ours,” said the CEO.

Gallagher also said approximately 97 percent of STA’s existing contracts up for renewal this year have been renewed so far and that the company continues to make progress in renegotiating existing fuel protection agreements as well as obtaining additional rate increases beyond the current CPI to offset higher fuel costs in some contracts without such clauses.

“We have a group of seasoned industry veterans who continue to apply their experience and knowledge of the industry in both local and regional markets which is a competitive advantage of STA. We continue to find new ways to create value for our customers and our shareholders.”

The company said that the new energy investment portfolio, acquired as part of the Canadex acquisition closed in January this year, has produced increased cash flow due to higher commodity prices and has provided a “natural hedge” against the portion of unprotected fuel costs in the company’s core transportation business.

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 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.

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