The Repayment Assistance Plan, or RAP, is the new federal income-driven student loan plan that becomes available on July 1, 2026. It was created by the One Big Beautiful Bill Act, and for many borrowers it will replace the income-driven plans they know today. If you have federal student loans, RAP is the plan you will hear about most this year, so here is what it actually means for your monthly payment, in plain English.
What is RAP, in one sentence?
RAP is an income-driven repayment plan, which means your monthly payment is based on what you earn and how many dependents you have, not on your loan balance. The bigger your income, the more you pay; the more dependents you support, the less you pay.
How RAP calculates your monthly payment
Under RAP, your payment is a percentage of your adjusted gross income (AGI), the income figure from your tax return. The percentage is tiered, and it steps up one point for every $10,000 of AGI, starting at 1% and capping at 10%:
| Your annual AGI | RAP rate | What you pay each month |
|---|---|---|
| $10,000 or less | flat | $10 |
| $10,001 to $20,000 | 1% | 1% of AGI, divided by 12 |
| $20,001 to $30,000 | 2% | 2% of AGI, divided by 12 |
| $30,001 to $40,000 | 3% | 3% of AGI, divided by 12 |
| $40,001 to $50,000 | 4% | 4% of AGI, divided by 12 |
| $50,001 to $60,000 | 5% | 5% of AGI, divided by 12 |
| $60,001 to $70,000 | 6% | 6% of AGI, divided by 12 |
| $70,001 to $80,000 | 7% | 7% of AGI, divided by 12 |
| $80,001 to $90,000 | 8% | 8% of AGI, divided by 12 |
| $90,001 to $100,000 | 9% | 9% of AGI, divided by 12 |
| $100,001 or more | 10% | 10% of AGI, divided by 12 |
This is a real change from the older plans. Most older income-driven plans first subtracted a poverty-line amount from your income and then charged a percentage of what was left. RAP applies its percentage to your full AGI, with no poverty-line offset. The practical effect is different from plan to plan and from borrower to borrower, which is exactly why running your own numbers matters.
The dependent deduction
RAP lowers your payment by $50 per month for each dependent in your household. If you have three dependents, that is $150 a month off your calculated payment. A qualifying dependent is someone you can claim on your federal tax return. This is one of the most borrower-friendly parts of RAP for families.
The $10 minimum
No matter how the math works out, RAP has a minimum monthly payment of $10. So even a very low-income borrower has a payment, but it is a small, predictable one.
The two protections that make RAP different
RAP includes two features designed to stop the thing borrowers hate most about old plans: paying every month and watching the balance go up anyway.
Unpaid interest is waived
If your RAP payment does not cover all the interest that built up that month, the government waives the leftover interest. It does not get added to your balance. That means no negative amortization, the slow-motion balance growth that trapped so many borrowers on older plans.
Your balance drops by at least $50 a month
RAP also guarantees that your principal goes down by at least $50 every month. If your payment alone does not reduce your principal by $50, a government subsidy makes up the difference. So your balance moves in the right direction every single month you pay.
When does my loan get forgiven under RAP?
For most borrowers, RAP forgives any remaining balance after 30 years of qualifying payments (360 monthly payments), whether your loans were for undergraduate or graduate school.
If you work in public service and pursue Public Service Loan Forgiveness (PSLF), the timeline is much shorter. RAP counts as a qualifying plan for PSLF, so payments you make on RAP count toward the 120 payments (10 years) for PSLF, and PSLF forgiveness stays tax-free. We cover this in detail in RAP and PSLF: what forgiveness-seekers need to know.
Who will be on RAP?
- If you take out a new federal student loan on or after July 1, 2026, RAP will be your only income-driven option.
- If you are an existing borrower who does not take new loans, you generally have a choice: stay on your current plan (for now) or switch to RAP. We walk through that decision in RAP vs SAVE vs PAYE vs IBR: which plan now?
- If you were on the SAVE plan, that plan has been struck down, and you will need to choose a new plan. See is my income-driven repayment plan going away?
What should I do now?
The honest answer is that RAP helps some borrowers and costs others more, depending on income, family size, balance, and forgiveness goals. The only way to know your real number is to run it. A student-loan advisor using Finology Software can show you your actual RAP payment, payoff date, and any forgiveness, with numbers you can trust because the math is verified against the rules.
And if your situation is complicated, a loan that is large, a public-service career, a spouse with their own loans, talking to a student-loan advisor who does this every day is worth it.
Want your real RAP number? Get matched with a student-loan advisor who runs it on verified math, or start a free trial.
July 1 student-loan changes: the full series
- July 1 student-loan changes, explained simply (start here)
- RAP vs SAVE vs PAYE vs IBR: which plan now?
- Is my income-driven repayment plan going away?
- Signs you are on the wrong repayment plan after July 1
- RAP and PSLF: what forgiveness-seekers need to know
- RAP payment calculator: what you will actually pay
