Student Transportation (STA) Reports Increased Activity in Privatized Busing

MUNICIPAL BUDGETS FORCE QUESTION; WHAT BUSINESS ARE SCHOOL DISTRICTS IN?

WALL, NJ, Jan. 12 /PRNewswire-FirstCall/ - Student Transportation of America
Ltd. (STA), one of North America's fastest growing school transportation
providers, today reported that it is has seen an increase in the number of
school districts interested in "converting" from public to private school bus
fleets. The North America school transportation market is a $15 billion
industry and approximately two-thirds of school districts currently own and
operate their own fleets.
"Budget constraints are forcing local municipalities, school districts and
state officials to decide between cutting programs, laying off teachers or
purchasing new school vehicles and funding in- house transportation
departments," said Denis J Gallagher, STA Chairman and CEO. "We're pleased to
see the more these government operations learn about contracted transportation
services, and the true cost of their own operations, in time and money, the
more they see the economic and operating advantages that we can bring to their
already depleted municipal budgets. We have proven we can implement
improvements and efficiencies in operations and provide the necessary capital
for fleet purchases that are important issues facing today's financially
strapped municipalities and school districts."
"These difficult economic times represent significant growth opportunities for
our business. In the current recessionary environment, we are experiencing an
increase in the availability of labor, fuel prices are down substantially, and
interest rates in our debt facility are at very low rates to use for our
growth plan. We have grown at a rate of over 20 percent in each of the last
eight years and have recently submitted several new bid and conversion
proposals for local school administrators to consider," Gallagher said.
Recently school districts in over twelve US states reportedly are going down
the privatization road or investigating the conversion of their school
transportation systems. Gallagher said STA has completed several successful
conversions in recent years that have the full support of the existing
drivers, mechanics, and administration and have built an excellent
relationship with the community.
"This is no time to cut teacher salaries and educational or extra-curricular
programs. Instead, taxpayers should challenge state and local governments to
concentrate on what business they are in; hopefully that's education. When we
provide the capital, operate their system more efficiently, and employ their
existing drivers while saving taxpayers money, I guess that answers why there
is an increase in activity," Gallagher said.

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 5,600 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.

SOURCE Student Transportation of America Ltd.

INVESTOR CONTACTS: Student Transportation of America Ltd., Denis J. Gallagher,
Chairman and Chief Executive Officer; Patrick J. Walker, Executive Vice
President and Chief Financial Officer; Keith P. Engelbert, Director of
Investor Relations, (732) 280-4200, Email: kengelbert@rideSTA.com, Website:
www.rideSTA.com; MEDIA CONTACT: Lynette Viviani, (973) 968-7929 office, (973)
534-1004 mobile, lviviani@rideSTA.com