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.