The Repayment Assistance Plan is the new income-driven repayment plan for federal student loans. It opened on 1 July 2026, it replaces SAVE, and for most people moving across from SAVE it costs more each month.
That last sentence is the part nobody leads with, so let us start there and then work through why.
The one change that matters
Every income-driven plan before RAP protected a slice of your income before charging you anything. SAVE protected income up to 225% of the federal poverty line. IBR protects income up to 150%. Only the money above that threshold, your discretionary income, was used to work out the payment.
RAP doesn’t do that. RAP applies its percentage to your entire adjusted gross income.
Here is the same person on both plans. Single, no children, earning $55,000, living in one of the lower 48 states where the 2026 poverty line for one person is $15,960.
| SAVE (retired) | RAP (current) | |
|---|---|---|
| Income counted | Above 225% of poverty line | All of it |
| Protected amount | $35,910 | $0 |
| Income the rate applies to | $19,090 | $55,000 |
| Rate | 5% | 5% |
| Monthly payment | About $80 | $229.17 |
Same salary. Same headline percentage. Nearly three times the payment. The percentages in RAP look small precisely because they’re applied to a much larger number.
How your RAP payment is calculated
Four steps, and you can do it on paper.
- Take your adjusted gross income. This is the AGI from your most recent tax return. If you file jointly, it’s the household figure.
- Find your band. The rate climbs one percentage point per $10,000 of income.
- Apply that rate to your whole income, then divide by twelve.
- Subtract $50 for every dependent child. The floor is $10 a month, and you never pay less than that regardless of how many children you have.
The bands
| Your annual income | Rate | Monthly payment, no children |
|---|---|---|
| Up to $10,000 | flat minimum | $10.00 |
| $10,001 to $20,000 | 1% | up to $16.67 |
| $20,001 to $30,000 | 2% | up to $50.00 |
| $30,001 to $40,000 | 3% | up to $100.00 |
| $40,001 to $50,000 | 4% | up to $166.67 |
| $50,001 to $60,000 | 5% | up to $250.00 |
| $60,001 to $70,000 | 6% | up to $350.00 |
| $70,001 to $80,000 | 7% | up to $466.67 |
| $80,001 to $90,000 | 8% | up to $600.00 |
| $90,001 to $100,000 | 9% | up to $750.00 |
| Over $100,000 | 10% | 10% of income |
A worked example. You earn $72,000 and have one child.
- $72,000 falls in the 7% band.
- 7% of $72,000 is $5,040 a year.
- Divided by twelve, that’s $420 a month.
- One child takes off $50.
- Your payment is $370 a month.
Note the shape of this. Crossing a band boundary matters. At $70,000 you’re in the 6% band paying $350. At $70,001 you’re in the 7% band paying $408.34. A single dollar of extra income raises your payment by nearly $60 a month, because the new rate applies to everything, not just the dollar that crossed the line.
The two things RAP gives back
RAP isn’t simply worse. It carries two protections that are genuinely valuable, and for some borrowers they outweigh the higher payment.
Unpaid interest is waived
If your payment doesn’t cover the month’s interest, the shortfall is written off. It’s not added to your balance and you don’t pay interest on it later.
This means your balance can’t grow on RAP. For someone with a large balance and a modest income, that’s a significant protection. Under older plans, negative amortization could see a borrower make payments for a decade and owe more at the end than at the start. That can’t happen here.
$50 of principal every month
If your scheduled payment would reduce the balance by less than $50, the difference is credited anyway. Combined with the interest waiver, it means the balance always moves downward, even at the $10 minimum payment.
Forgiveness after 30 years
Whatever is left after 360 qualifying monthly payments is canceled.
Thirty years is longer than the plans it replaced. IBR forgives after 20 or 25 years depending on when you borrowed. SAVE reached forgiveness in 20 years for undergraduate-only borrowers. RAP moves that to 30 for everyone.
There’s a sting worth planning for now rather than in 2056: a balance forgiven at the end of an income-driven plan is generally treated as taxable income in the year it’s canceled. The debt disappears and a tax bill arrives instead. It’s much smaller than the debt, but it’s due at once.
Forgiveness through Public Service Loan Forgiveness is different. That’s not taxed federally, which is one reason PSLF is worth so much more than it looks.
Who can use RAP
You need Direct Loans. That’s the main gate.
- Direct Subsidized and Unsubsidized loans: eligible.
- Direct Consolidation Loans: eligible, with one exception below.
- Parent PLUS loans: not eligible, even though they’re Direct Loans. This catches people out because it seems to contradict the rule. Parent PLUS borrowers reach an income-driven plan only through consolidating into a Direct Consolidation Loan and then using ICR, and a consolidation loan that repaid a Parent PLUS loan is excluded from RAP.
- FFEL and Perkins loans: not eligible until consolidated into a Direct Loan.
If you borrowed on or after 1 July 2026
You have exactly two options: RAP and the Tiered Standard Plan. IBR, ICR, PAYE, Graduated and Extended are closed to you permanently.
This also catches consolidation. If you consolidate an older loan on or after that date, the new consolidation loan follows the new rules, and you lose access to the legacy plans for that balance. If you’re thinking about consolidating and you value your access to IBR, work out the consequences before you apply, not after.
RAP against the alternatives
For a borrower with $42,000 at 6.8%, earning $58,000, household of two with one child:
| Plan | Starting monthly | Total paid | Term |
|---|---|---|---|
| Standard 10-year | $483.34 | $58,000 | 10 years |
| ICR | $427.46 | $61,554 | 12 years |
| Graduated | $296.77 | $61,966 | 10 years |
| Tiered Standard | $372.83 | $67,109 | 15 years |
| RAP | $191.67 | $72,855 | 16.2 years |
| IBR (new) | $212.83 | $82,587 | 18.8 years |
RAP has the lowest monthly payment here and the third-highest lifetime cost. That’s the normal trade-off and it’s not a criticism of the plan: a low payment you can actually sustain beats a low total you default on in year three.
Run your own figures rather than relying on this table. Household size, dependants and your state all move the answer.
Should you choose RAP?
RAP is likely right if:
- You’re going for Public Service Loan Forgiveness. RAP counts toward it; the Tiered Standard Plan doesn’t. This alone decides it for most public service workers.
- Your balance is large relative to your income. The interest waiver protects you.
- Your income is unstable. Payments move with income, and the floor is $10.
- You can’t afford a fixed payment. This is what income-driven plans exist for.
RAP is likely wrong if:
- You can comfortably afford the Standard 10-year payment. You’ll pay far less overall.
- You’re close to paying the loan off anyway.
- You have a high income and a small balance, where the 10% band produces a payment larger than a standard schedule would.
Check before you decide if:
- You still have access to IBR. For loans predating July 2026, IBR often produces a lower payment than RAP at the same income, because it subtracts the poverty threshold first. Compare both.
What to do next
- Log in at studentaid.gov and confirm your actual balance, rate and loan types. Do not plan around a figure you remember, particularly if your balance sat in the SAVE forbearance while interest accrued from August 2025.
- Find the date on your servicer’s notice. Your 90-day window runs from that date, not from when everyone else’s did.
- Compare every plan you qualify for rather than assuming RAP is the answer because it is the one in the news.
- Apply before the window closes. If you don’t choose, your servicer chooses for you, and that’s frequently the most expensive plan you qualify for.
Applying is free. Anyone charging you a fee to enroll, consolidate or apply for forgiveness is running a scam, and you can report them to the FTC.
Frequently asked questions
Is RAP better than SAVE? For monthly cost, almost always no. SAVE protected 225% of the poverty line before charging anything; RAP charges on your whole income. RAP does add a stronger interest waiver, and SAVE no longer exists, so the practical comparison is RAP against IBR and the Tiered Standard Plan.
Can my balance grow on RAP? No. Unpaid interest is waived rather than capitalized, and $50 of principal is credited monthly. The balance only moves downward.
Does RAP count toward PSLF? Yes. RAP is a qualifying plan for Public Service Loan Forgiveness. The Tiered Standard Plan isn’t, and choosing it stops your PSLF clock.
What’s the minimum RAP payment? $10 a month. Dependants reduce the calculated payment but never take it below $10.
Can Parent PLUS borrowers use RAP? No. Parent PLUS loans are excluded, and so is a Direct Consolidation Loan that repaid one. ICR through consolidation remains the route to an income-driven plan for those borrowers.
What happens if my income changes? Payments are recalculated annually when you recertify. If your income drops significantly you can ask for an earlier recalculation rather than waiting for the yearly cycle.
How long until forgiveness? 360 qualifying monthly payments, which is 30 years. Through PSLF it’s 120 payments, or 10 years, and that forgiveness isn’t taxed federally.