Craig Hill, 19, challenged the Further Education Funding Council's refusal in October to pay for a place for him at the pound;22,000-a-year Toynton Hall College in Lincolnshire.
Mr Justice Moses said he could find no legal flaw in the council's decision. He added that: "I have the greatest sympathy with the parents. They must feel frustration that it is only the lack of money tha prevents this
thoroughly-deserving young man going to the educational establishment which they wish him to attend."
Craig, of Haynes, Bedfordshire, has poor communication skills, low self-esteem and "severely delayed cognitive development".
The local education authority decided he should attend mainstream Bedford College.
The FEFCouncil claimed Bedford College would be "adequate". Mr Justice Moses said the FEFC could only provide funding if it was satisfied that Bedford College could not meet his needs.