Federal judges rejected President Trump's plan to restrict student loan forgiveness for public servants on July 1, 2026. A second ruling overturned the administration's broader loan forgiveness rule. These decisions were made by courts in multiple states examining the policies. The Education Department increased 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 meet eligibility for forgiveness under current programs. Legal disputes will likely remain as the administration addresses the setbacks. This move shifts the landscape for federal student aid policy.