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U.S. District Judge F. Dennis Saylor blocked the Department of Homeland Security rule.
The rule would have capped visas for international students, exchange visitors and journalists.
The judge ruled for a coalition of unions and higher education groups.
He said the government's reasoning was exceptionally weak and that the agency did not meet its obligations under the Administrative Procedure Act.
More context
One analysis said the change could have meant fixed four-year limits for students and 240-day journalist caps.
Another analysis said the lawsuit argued the rule would cause irreparable harm to students and institutions.