Court rules in favor of making colleges prove their students can find jobs to get loan money

A federal court has ruled in favor of tough new regulations for career training programs, dealing a major blow to the for-profit college industry.

Last fall, the Education Department said schools should be able to show that their graduates make enough money to repay their student loans. Programs that don't pass its new "gainful employment" standard risk losing access to federal student aid money.

Continue Reading Below

The Association of Private Sector Colleges and Universities sued in the U.S. District Court for the District of Columbia to try to stop the rules from taking effect on July 1.

In an opinion released Tuesday, Judge John Bates wrote that the regulations "survive this court challenge in their entirety, just as prior courts have concluded." Neither side had immediate comment.