The Repayment Assistance Plan, or RAP, is the newest — and for some borrowers the only — income-driven repayment (IDR) plan for federal student loans. The recent RAP launch, combined with other student loan repayment changes, has left many borrowers with questions about RAP and whether they should switch to it.
The answer isn't the same for everyone and depends on factors like your income, loan balance and forgiveness goals. Some borrowers will face higher monthly payments and a longer path to forgiveness under RAP. On the other hand, the plan’s structure — which cancels unpaid interest and guarantees principal reduction — could prevent ballooning balances and lead to faster repayment for some borrowers.
What is the Repayment Assistance Plan (RAP)?
RAP was created by President Donald Trump’s One Big Beautiful Bill Act (OBBBA) as part of an overhaul of federal student loans. Here’s an overview of this IDR plan:
Repayment term until forgiveness: 30 years.
Payment amounts: 1%-10% of your annual adjusted gross income (AGI); percentage is based on earning level. Payment amount is reduced by $50 for each dependent claimed on your tax return. The plan offers $10 flat payments for those earning $10,000 per year or less.
Interest subsidy: If the RAP payment amount is less than the monthly interest that accrues on the loan, the remaining unpaid interest is not charged.
Matching principal payment: If the RAP monthly payment doesn’t reduce the principal balance by at least $50, a subsidy is applied to ensure the principal balance is reduced by at least $50 each month.
Who is eligible for RAP?
Any borrower with an eligible federal Direct Loan can enroll in RAP. It doesn’t matter when you got the loan; however, timing can affect whether additional repayment options are open to you.
- If you take out a new federal student loan (including consolidation) on or after July 1, 2026, you then have only two repayment choices: RAP and a new Tiered Standard Repayment Plan.
- If all of your loans were disbursed or consolidated before July 1, 2026 (and you don’t take out new ones) you can enroll in RAP and you have access to all legacy plans, including Income-Based Repayment (IBR), Pay As You Earn (PAYE) and Income Contingent Repayment (ICR). PAYE and ICR will sunset July 1, 2028.
- The above options and cut-off dates also apply to borrowers leaving the now-ended Saving on a Valuable Education (SAVE) plan.
Parent PLUS loans and consolidated loans that include a parent PLUS loan aren’t eligible for RAP.
Should you switch to RAP?
Whether to switch to RAP depends on your specific situation. First, determine what other student loan repayment options are available to you. Compare the monthly payments and overall cost of each before selecting one. In general, here are reasons you may or may not want to switch to RAP.
Consider switching to RAP if the following applies to you:
- It’s the repayment plan that results in the lowest monthly payment.
- Your monthly income places you in a lower repayment tier for RAP.
- You’re pursuing Public Service Loan Forgiveness (PSLF) and qualify only for RAP and the Tiered Standard Repayment Plan, which doesn’t count toward PSLF.
- You took out new federal student loans on or after July 1, 2026, or plan to in the future, meaning you aren’t eligible for legacy IDR plans.
- You will be leaving the now-ended SAVE plan and will be taking out additional loans.
RAP may not be the best option if the following applies to you:
- You won’t have loans disbursed on or after July 1, 2026, and would have a lower payment on PAYE, ICR or IBR.
- You have a high income and can comfortably afford the Tiered Standard Repayment Plan (meaning you could pay your loan off sooner and pay less interest over time).
» CALCULATOR: Compare IDR plan payments
Nerdy Perspective
My husband's undergraduate and law school loans were on the SAVE Plan. RAP is one of the repayment options we considered. Unfortunately, we can't afford the RAP payments right now — it's $800 more per month than our previous SAVE payment. We opted to enroll in the Standard Repayment Plan until we can adjust our budget to afford a plan that works toward PSLF, like RAP.
How does RAP compare to legacy IDR plans?
If you don’t open new federal student loans on or after July 1, 2026, you remain eligible for legacy IDR plans. Both legacy plans and RAP tie payments to income, but RAP differs in several key ways:
- Uses AGI instead of discretionary income. RAP calculates payments as a percentage of your adjusted gross income. Legacy IDR plans calculate payments using discretionary income, by subtracting 100% or 150% of the federal poverty guideline from your income. Because poverty guidelines adjust annually for inflation, discretionary income — and legacy IDR payments — change accordingly. RAP doesn’t adjust for inflation, meaning payments could increase and become harder to manage over time.
- Different treatment of dependents. Legacy IDR plans adjust payments based on family size, which could include a spouse or other household members. RAP instead provides a flat, monthly reduction ($50) based on the number of dependents you claim on your federal tax return.
- No $0 payments. Unlike some legacy income-driven repayment plans, RAP doesn’t allow $0 monthly payments. The lowest payment you can have is $10, even if you lose your job or face a drop in income.
- Provides an interest subsidy. RAP waives any unpaid interest not covered by your monthly payment. For example, if you owe $200 monthly in interest but your RAP payment is only $10 based on your income, the other $190 is waived. IBR and PAYE do offer interest subsidies, but only for subsidized loans for the first three years. ICR offers no interest subsidy.
- Has a matching principal payment amount. RAP guarantees that loan principal declines by at least $50 a month. If your on-time payment doesn’t reduce the principal by that amount, a government subsidy makes up the difference. Other IDR plans don’t offer such a subsidy or require principal reduction, so the balance can stay flat or grow.
- IDR forgiveness credit only transfers one way. Switching from a legacy IDR plan (including SAVE) into RAP carries prior qualifying payments for standard IDR forgiveness forward. But if you want to switch back to a legacy IDR plan, payments made under RAP won’t count toward that plan’s forgiveness timeline. Public Service Loan Forgiveness (PSLF) isn't affected by this. RAP payments still count toward the 120 payments required for PSLF, regardless of which IDR plan you're on.
RAP vs. IDR overview
Feature | RAP | IBR/PAYE/ICR |
|---|---|---|
Repayment term / time to forgiveness | 30 years for all borrowers. | 20 or 25 years depending on plan and loan type. |
Income used to calculate payment | Adjusted gross income (AGI). | Discretionary income. |
Amount of income protected from payment calculation | None. | 100% to 150% of the federal poverty guideline protected (varies by plan). Also depends on your location and family size. |
Payment amount range | 1%–10% of your AGI; $10 minimum payment. | 10%–20% of discretionary income; $0 payments possible. |
Family size or dependent adjustment | $50 reduction per dependent claimed on federal tax return. | Payment adjusted based on total family size. |
Interest accrual if payment doesn't cover interest | Unpaid interest is not added to the loan balance. | No interest subsidy for ICR. For PAYE and IBR, monthly unpaid interest waived for first three years on subsidized loans. |
Guaranteed principal reduction | Yes, at least $50 per month. | None. |
How to estimate your monthly RAP bill
RAP monthly payments are graduated based on your AGI in the previous tax year. The more you earn, the larger the slice of your income you pay each month. RAP requires you to recertify income annually, so a pay increase that puts you in a new bracket will increase your student loan payment.
Find your RAP base payment
Annual income bracket | RAP base payment |
|---|---|
$0 - $10,000 | $120 ($10 monthly) |
$10,001 - $20,000 | 1% of adjusted gross income (AGI) |
$20,001 - $30,000 | 2% of AGI |
$30,001 - $40,000 | 3% of AGI |
$40,001 - $50,000 | 4% of AGI |
$50,001 - $60,000 | 5% of AGI |
$60,001 - $70,000 | 6% of AGI |
$70,001 - $80,000 | 7% of AGI |
$80,001 - $90,000 | 8% of AGI |
$90,001 - $100,000 | 9% of AGI |
$100,001 and above | 10% of AGI |
Once you have your annual base payment, use this formula to calculate your monthly RAP bill:
RAP monthly payment formula
(RAP base payment / 12) - $50 per dependent = Estimated monthly RAP payment
Example of how RAP works: An unmarried borrower with no dependents earning $45,000 has a $150 monthly RAP payment. If $190 in interest accrues that month, RAP waives the $40 shortfall. The full $150 payment goes toward interest, leaving nothing for the guaranteed $50 in principal reduction. So the government adds a matching $50 payment to close that gap too — ensuring the balance shrinks every month, even though the payment alone wouldn't cover it.
How does RAP compare to the Tiered Standard Plan?
RAP and the Tiered Standard Repayment Plan are the only options available for anyone who takes out a student loan on or after July 1, 2026. A major difference between the two is PSLF eligibility. Payments made on the Tiered Standard Plan don’t count toward PSLF, while those made under RAP do.
Here are other ways these plans differ:
Feature | RAP | Tiered Standard Plan |
|---|---|---|
Payment basis | 1%-10% of AGI; $10 minimum payment. | Fixed amount based on your balance at the start of repayment; doesn't change with income. |
Repayment term | 30 years. | 10, 15, 20, or 25 years, based on your balance at repayment. |
Loan forgiveness | Yes, after 30 years of qualifying payments. | No. |
PSLF eligible | Yes. | No, payments on this plan don’t count toward PSLF. |
Interest subsidy | Yes. Unpaid monthly interest is waived so it's never added to your balance. | No. |
Guaranteed principal reduction | Yes, at least $50 a month via government match. | Not applicable. Fixed payments already reduce principal monthly. |
Best for | Borrowers who want payments tied to income, plan to pursue PSLF, or expect income to stay modest relative to their debt. | Borrowers who can afford fixed payments and want to pay off their debt on a set schedule without accruing 30 years of interest. |
What to know about enrolling in RAP
For some borrowers, RAP may provide a faster path to repayment. It prevents unpaid interest from growing the balance and guarantees that principal declines by at least $50 per month.
But RAP may not be the best fit for everyone. Depending on your income and family situation, monthly payments could be higher than under some legacy income-driven plans, and forgiveness may take longer.
RAP is now available for enrollment on studentaid.gov, but take the time to determine if it’s your best choice. Factors such as your current and expected future income, number of dependents, student debt amount and eligibility for forgiveness can all influence which repayment plan makes the most sense for you. You can use the Department of Education’s loan simulator to run side-by-side comparisons of your repayment options.
