What is the RAP student loan plan?

The Repayment Assistance Plan (RAP) is a new federal student loan repayment option that launched July 1, 2026. Monthly payments are 1% to 10% of your adjusted gross income divided by 12, based on income tier. The minimum payment is $10/month. Any remaining balance is forgiven after 360 qualifying payments.

How is the RAP payment calculated?

RAP payment = (Income tier percentage x AGI) / 12. The percentage rises 1% for every $10,000 of income, from 1% at under $10,000 to 10% at $100,000 or more. Each qualifying dependent reduces the payment by $50/month. For example, earning $50,000 = 5% rate = $208/month before any dependent reductions.

Does RAP replace SAVE?

Yes. RAP became the primary income-based repayment option as of July 1, 2026, after the SAVE plan was blocked by courts. Borrowers previously in SAVE forbearance are being transitioned to RAP.

Is RAP better than IBR?

It depends on your income and loan balance. RAP payments are based on a simple AGI percentage, which benefits higher earners with large balances. IBR bases payments on discretionary income and has a 20 or 25-year forgiveness timeline vs. RAP's 30 years. Borrowers in PSLF-qualifying jobs should evaluate whether RAP payments still qualify.

Student Loan RAP Plan 2026: How to Calculate Your New Monthly Payment

What Is the RAP Plan?

The Repayment Assistance Plan (RAP) is the new primary income-based federal student loan repayment option, effective July 1, 2026. Created by the One Big Beautiful Bill Act, RAP replaces the court-blocked SAVE plan and simplifies how income-driven payments are calculated. Instead of basing payments on "discretionary income" (a complex formula tied to the poverty line), RAP uses a straightforward percentage of your total adjusted gross income (AGI).

More than 43 million Americans carry federal student loan debt, and the launch of RAP is one of the most significant changes to repayment options in decades. If you are currently in SAVE forbearance or evaluating which plan to use, this guide explains everything you need to know. Use our Student Loan Repayment Calculator to estimate your payment.

How the RAP Payment Formula Works

RAP payments are calculated using a tiered percentage of your prior year's adjusted gross income (AGI), divided by 12. The percentage increases by 1 percentage point for every $10,000 of income:

Annual AGI	Payment Rate	Monthly Payment
Under $10,000	1% of AGI	$10 minimum
$10,000 - $19,999	1% of AGI	~$8 - $17 (min $10)
$20,000 - $29,999	2% of AGI	~$33 - $50
$30,000 - $39,999	3% of AGI	~$75 - $100
$40,000 - $49,999	4% of AGI	~$133 - $167
$50,000 - $59,999	5% of AGI	~$208 - $250
$60,000 - $69,999	6% of AGI	~$300 - $350
$70,000 - $79,999	7% of AGI	~$408 - $467
$80,000 - $89,999	8% of AGI	~$533 - $600
$90,000 - $99,999	9% of AGI	~$675 - $750
$100,000 or more	10% of AGI (cap)	$833+ (10% max)

Dependent reduction: Each qualifying dependent reduces your monthly payment by $50. A borrower earning $50,000 with two dependents pays $208 - $100 = $108/month.

Minimum payment: $10/month regardless of income or balance.

Key RAP Benefits

Interest waiver: If your monthly RAP payment does not cover the full interest charge, the remaining interest is waived. Your balance cannot grow due to unpaid interest.
Principal match: If your on-time payment reduces your principal by less than $50, the federal government contributes up to $50/month toward your principal balance.
Auto-pay discount: Enrolling in autopay reduces your interest rate by 1% through June 30, 2028 (up from the usual 0.25%).
Forgiveness after 30 years: Any remaining balance is forgiven after 360 qualifying monthly payments. Note: IBR offers forgiveness in 20-25 years.

Who Qualifies for RAP?

All student borrowers with federal Direct Loans (Subsidized, Unsubsidized, Grad PLUS)
Borrowers who consolidate eligible FFEL loans into a Direct Consolidation Loan
Parent PLUS borrowers do NOT qualify for RAP. They are limited to Standard Repayment or ICR (if they consolidate before July 1, 2026)
New borrowers taking loans on or after July 1, 2026 are automatically defaulted to Standard Repayment but can elect RAP

RAP vs. IBR vs. Standard: Which Is Better?

The right plan depends on your income, loan balance, and career plans. Here is a comparison for a borrower with $37,000 in federal loans at 5.50%:

Plan	Payment at $40K income	Payment at $60K income	Forgiveness
Standard (10-yr)	$401/month	$401/month	None (paid off)
RAP (new)	$133/month	$300/month	After 30 years
IBR (new borrowers)	~$150/month	~$250/month	After 20 years

Key observations:

RAP is simpler but has a longer forgiveness timeline (30 years) than IBR (20 years for new borrowers).
IBR caps payments at what you would pay on a 10-year Standard plan - RAP does not have this same safety net for all income levels.
For PSLF borrowers, RAP payments do qualify for the 120-payment count, since RAP is an income-driven plan.
Standard Repayment is still the cheapest option in total interest if you can afford the payment.

Use our Student Loan Repayment Calculator to compare your specific numbers.

What Happens If You Were on SAVE?

The SAVE plan was placed under court injunction in 2024 and borrowers were moved into an interest-free administrative forbearance. As of July 1, 2026, the Department of Education is transitioning SAVE borrowers to RAP. Payments in the SAVE forbearance period do not count toward PSLF or IDR forgiveness, which is a concern for borrowers on those tracks.

If you were in SAVE forbearance, you should:

Log in to studentaid.gov to confirm your plan has been transitioned to RAP
If pursuing PSLF, verify your qualifying payment count has not been disrupted
If IBR is still available to you and offers better terms (especially the 20-year forgiveness), compare both options before staying on RAP

PSLF and RAP

RAP payments count toward Public Service Loan Forgiveness (PSLF) if you work full-time for a qualifying employer. The standard requirements still apply: 120 qualifying payments, qualifying employer, Direct Loans. The key difference to watch is the payment amount - some PSLF borrowers on SAVE were making very low or $0 payments, and RAP payments may be higher for some income levels.

For borrowers whose RAP payment exceeds what they would pay on the 10-year Standard plan, the Standard plan payment amount counts for PSLF purposes - this is the "PSLF payment cap" that still applies under RAP.

Frequently Asked Questions

What is my RAP payment if I earn $55,000?

At $55,000 AGI, you fall in the 5% tier (between $50K and $60K). Your payment is 5% x $55,000 / 12 = approximately $229/month. If you have one dependent, subtract $50, making it $179/month.

Does RAP replace all income-driven plans?

RAP is the new primary income-driven option for new borrowers from July 1, 2026 onward. Existing borrowers may still access IBR if they borrowed before July 1, 2026. PAYE and ICR will be phased out in 2028. SAVE is currently blocked by courts.

Is forgiveness under RAP taxable?

Under current law, student loan forgiveness through IDR plans (including RAP) is tax-free through 2025. Beyond that, Congress has not yet made the tax exclusion permanent. PSLF forgiveness remains tax-free permanently.

Can I switch from RAP to IBR?

Yes, if you are eligible for IBR (loans disbursed before July 1, 2026), you can switch plans. IBR offers 20-year forgiveness for new borrowers, which may be preferable to RAP's 30-year timeline if you have a large balance and modest income.

Sources

Disclaimer: This article is for educational purposes only and does not constitute financial, legal, or tax advice. Student loan rules are subject to change. Verify all information at studentaid.gov before making repayment decisions.