What Is the New Repayment Assistance Plan (RAP)?
Key takeaways
- The Repayment Assistance Program (RAP) is expected to be available by July 1, 2026.
- The new program replaces existing income-driven repayment plans.
- Some repayment plans for existing student loans remain in effect until June 30, 2028.
RAP is an income-driven repayment (IDR) plan for federal student loans, expected to be available by July 1, 2026. It replaces existing IDR plans for borrowers, making a significant change in how student loans are repaid. If you plan to take out federal student loans after July 1, 2026, the changes might affect your repayment.
Overview of RAP
Key details about RAP:
- Minimum payment: RAP requires a $10 payment for incomes of $10,000 or less.
- Payment calculation: The plan requires a payment of 1% to 10% of adjusted gross income (AGI) for incomes above $10,000.
- Interest subsidy: If the required payment is less than interest charges, the excess interest won’t accrue.
- Matching principal payments: For principal payments of less than $50, RAP provides matching principal payments to reduce the principal by at least $50.
- Loan forgiveness: Loans can be forgiven after 30 years.
How does the new Repayment Assistance Plan work?
RAP is a new federal student loan repayment plan that replaces existing IDR plans. For students who take out federal loans after July 1, 2026, it is the only repayment plan. Existing plans, such as Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR), remain in effect for existing borrowers who don’t take out additional student loans.
RAP payments are based on a percentage of the borrower’s AGI, with higher incomes requiring higher percentages. For example, incomes between $10,001 and $20,000 require 1% of AGI, while incomes between $20,001 and $30,000 require 2% of AGI. This scales up to incomes between $90,001 and $100,000, which require 9% of AGI toward payments. Incomes above $100,000 have the highest payment of 10% of AGI.
“RAP appears to be most beneficial for individuals with AGIs between $30,000 and $80,000 who are seeking the lowest possible monthly payment,” says Rich Williams, chief customer officer at student loan benefits manager Summer. “Individuals with incomes above $80,000 might benefit more from legacy IDR plans, such as the Income-Based Repayment (IBR) plan, which calculates payments based on 10% of discretionary income.”
Important dates for the Repayment Assistance Plan
Review the RAP timeline to better understand your student loan repayment options.
- Before July 1, 2026: Existing plans, such as IBR and ICR, remain in effect before this date.
- After July 1, 2026: Student loans disbursed after this date are not eligible for existing plans, including IBR, ICR and PAYE. New student loans originated after this date are eligible only for RAP. Borrowers who received all their loans before July 1, 2026, retain access to existing plans.
- June 30, 2028: Borrowers on ICR or PAYE must enroll in a new plan by this date. Beginning July 1, 2028, borrowers can choose RAP, with some borrowers retaining access to the IBR plan.
Some borrowers might have to switch plans in 2026. “Borrowers currently enrolled in SAVE forbearance will receive notices in July from their servicers, starting a 90-day period for them to switch to another repayment plan. If they do not switch, their payments will revert to a standard, generally 10-year, repayment plan, which will likely be more expensive for most,” Williams says.
Estimating monthly Repayment Assistant Plan payments
RAP calculates payments using your AGI in the previous tax year. AGI is calculated by subtracting adjustments, such as traditional IRA contributions, student loan interest and unemployment compensation. Higher earnings result in a larger percentage of income going to your RAP payment.
You might also pay more under RAP if you have a low income. “A significant difference with RAP is its lack of a protected income amount, which could result in lower-income individuals paying slightly more than they would under other IDR plans,” Williams says.
RAP reduces payments by $50 for each dependent. However, the minimum payment is always $10, regardless of income or deductions.
