Federal judges rejected President Trump's plan to restrict student loan forgiveness for government workers on July 1, 2026. A second ruling tossed the administration's broader loan forgiveness rule. These decisions involved courts in multiple states reviewing the policies. The Education Department raised loan limits for certain programs after the court losses. Officials modified the rules to follow the new legal environment. The public servant group had sought clarity on loan relief. The rulings impact how borrowers qualify for forgiveness under current programs. Legal challenges will likely persist as the administration responds to the setbacks. This move alters the landscape for federal student aid policy.