How the OBBB Bill and RAP Are Reshaping Student Loan Planning for Advisors
A New Era in Student Loan Repayment: RAP Is Coming
In July 2026, federal student loan repayment will undergo its biggest overhaul in decades. The OBBB (One Big Beautiful Bill) of 2025 introduces the new Repayment Assistance Plan (RAP), which will become the mandatory default income-driven repayment plan for most borrowers. At the same time, OBBB slashes the federal borrowing, for most borrowers (students and parents) will only be able to borrow about 50% of tuition costs, compared to 100% today.
For financial advisors, these dual changes — a new repayment system and reduced borrowing capacity — completely transform both college funding strategies and student loan repayment planning. With SAVE, PAYE, and ICR being phased out, RAP’s rules will reshape how you guide clients.
That’s why Finology Software has already updated our Federal Loan Simulator and Liability Planner — so you can start preparing clients now, before these changes lock into place.
Key RAP Features at a Glance
Here’s what makes RAP different:
- Income-Based Payments: Payments scale from 1% to 10% of a borrower’s adjusted gross income (AGI).
- 30-Year Forgiveness Term: Longer than most current IDR options.
- $10 Minimum Monthly Payments: Even the lowest earners will have a payment obligation.
- Only Dependent Children Count: RAP offers a limited deduction of $50/month per dependent child — no broader household size adjustments.
- No Discretionary Income Buffer: RAP uses AGI, not discretionary income, so borrowers may face higher monthly obligations.
For many borrowers — especially those taking out loans after July 1, 2026 — RAP won’t just be an option. It will be the only income-based plan available.
What This Means for Advisors
If you serve clients with federal student debt, these changes are massive. RAP alters repayment math, OBBB cuts federal borrowing in half, and legacy plans are disappearing.
Clients may not feel the urgency yet — but by the time they do, their options will be limited. Your ability to forecast outcomes, explain trade-offs, and model strategies will set you apart.
And that’s where Finology Software comes in.
Finology Software Is Already RAP-Ready
Our tools now include RAP-specific functionality to help advisors model this new reality and give clients clarity about what lies ahead:
Liability Planner
Go beyond repayment math and integrate student loan liabilities into your client’s full financial plan. With RAP updates, you can:
- Model how RAP impacts balances over time
- Flag borrowers who must consolidate or enroll in IBR before 2028
- Identify PSLF eligibility under RAP (mandatory for new loans)
- Show how reduced borrowing limits shift funding needs toward savings and private loans
Parents that take of Plus loans will after July 1, 2026 will only have access to the Standard Repayment.
For Parents and ICR (Income-Contingent Repayment)
Parents face unique challenges under OBBB + RAP:
- Parent PLUS borrowers must consolidate before July 1, 2026 to maintain access to income-based repayment.
- ICR will sunset after June 30, 2028. Borrowers who don’t act by then will be locked into RAP.
- Any new Parent PLUS loans taken after July 1, 2026 will only qualify for Standard Repayment unless consolidated.
Finology Software makes these deadlines clear and actionable for advisors — helping you protect your clients from costly missteps.
What Finology Software Users Say
“With Finology Software we create mini financial plans that give our clients clarity and confidence in every decision with their federal student loan debt.” – Ryan Galiotto – Founder Etech Financial, Student Loan Help Network.
Action Items Before 2026
If your clients want to avoid being automatically enrolled in RAP, timing matters:
- For Parent PLUS borrowers: Consolidation is the only path to income-based repayment post-2026.
- For ICR users: Consolidate and enroll before June 30, 2028 to remain in a legacy plan.
- For future students: Prepare families for the funding gap.
- For PSLF seekers: Model RAP timeline with 10 years of payments.
All of this can now be modeled directly in Finology Software.
A Final Word: Guidance Is the Advantage
RAP will simplify federal student loan repayment in the long run — but in the short term, it creates complexity and urgency. That complexity is your opportunity.
Clients don’t need jargon. They need clear, strategic guidance from someone who can model outcomes, explain trade-offs, and map a path forward.
Finology Software ensures you’re that advisor.
Start simulating RAP plans today with Finology Software — and give your clients clarity before the July 2026 curve hits.