A motor vehicle used to transport pre-primary, primary, or secondary school students between home and school or to and from school-sponsored events. School buses must meet a set of unique federal safety regulations. School buses must be painted school bus yellow. Riders on school buses are protected by compartmentalization, not seat belts. Seats are closely spaced and made of energy absorbing material. Drivers of school buses must have a commercial driver's license (CDL) and a school bus endorsement.

FTA grantees are prohibited from providing exclusive school bus service unless it qualifies under one of the following three exemptions: 1) It operates a school system and also operates a school bus service with non-federally funded equipment, vehicles or facilities; 2) Existing private operators are unable to provide adequate, safe service; or 3) The public entity or its predecessors were engaged in school bus service prior to August 13, 1973. Even if the grantee qualifies for an exemption, it may not operate the exclusive bus service with federally funded equipment, vehicles, or facilities. Transit buses cannot be painted school bus yellow.