RAP Is Live. For Older Borrowers, the 30-Year Clock Is the Whole Conversation.

The Repayment Assistance Plan is now a plan your clients can actually select. It became available for Direct Loan borrowers on July 1, 2026 under the FY2025 reconciliation law (Congressional Research Service). For a borrower in their thirties, RAP is mostly a payment-size question. For a borrower in their fifties or sixties, it is a retirement question wearing a student-loan costume, and that is the part most repayment calculators will not say out loud.

Here is the short version you can bring to a client meeting today.

What RAP actually charges

RAP sets the monthly payment on a sliding scale tied to adjusted gross income, not discretionary income. The percentage climbs one point for every $10,000 of AGI, from 1% up to a 10% cap above $100,000 (Fidelity):

• $10,000 or less: a flat $10 per month
• $30,000 to $40,000: 3% of AGI
• $50,000 to $60,000: 5% of AGI
• $80,000 to $90,000: 8% of AGI
• $100,000 and above: 10% of AGI

The base payment is then reduced by $50 for each dependent claimed on the return, and no one pays less than $10 a month (SoFi). Two protections matter for planning. If the required payment does not cover the interest that accrued, the unpaid interest is waived, so the balance does not grow. And if the payment does not shave at least $50 off principal, a subsidy makes up the difference, so the balance moves down every month (Congressional Research Service).

One eligibility line to keep in front of you: RAP does not accept Parent PLUS loans. If that is the debt on the table, RAP is off the board.

Why the 360-month clock is the real story for older clients

Anything left after 30 years, which is 360 qualifying payments, is forgiven (Student Loan Planner). That timeline is longer than the 20 or 25 years borrowers may remember from older income-driven plans. For a 34-year-old, forgiveness at 64 is a footnote. For a 56-year-old, forgiveness at 86 is the entire plan.

That is the tradeoff to put on the table. A low RAP payment can feel like relief right now. It can also commit a client to writing loan checks deep into the years they expected to be drawing down savings, not adding a bill. The interest waiver keeps the balance from ballooning, which is genuinely valuable. It does not shorten the 360-month runway.

So the older-borrower conversation is not “what is my payment.” It is “what does this payment stream do to my retirement cash flow, and is chasing forgiveness at 86 better than paying this off before I stop working.” Sometimes RAP wins. Sometimes a more aggressive payoff before retirement wins. The point is that you cannot answer it by looking at the monthly number alone.

Bring the whole picture, not one number

This is where an advisor earns the seat. A borrower reading a payment estimate online sees a comfortable monthly figure. What they do not see is the total paid across 360 months, the years that stream overlaps with retirement, and how that compares to their other plan options side by side. Finology Software is built to put those numbers next to each other so the tradeoff is visible in the room, not discovered a decade too late.

RAP is here, and for a lot of clients it will be the right answer. For your clients near retirement, make sure the 30-year clock is a decision you walked them through, not a default they backed into.