The passing of the Trump administration’s One Big Beautiful Bill Act (OBBBA) in 2025 overhauled federal programs for student loans. One of the most impactful changes for the nation’s 43 million federal student-loan borrowers was the creation of the Repayment Assistance Plan (RAP), which is set to completely replace existing income-driven repayment (IDR) plans by July 1, 2028. Whether you already have a federal student loan or are thinking about borrowing for your education, it’s smart to become familiar with the RAP before making a move.
Key Points
• The Repayment Assistance Plan (RAP) is a new federal income-driven student loan repayment plan that replaces old income-driven repayment (IDR) options.
• RAP will be the only IDR plan available for new federal student loans borrowed on or after July 1, 2026.
• Monthly payments under RAP are calculated as a percentage of adjusted gross income (AGI), starting at a minimum of $10 for the lowest earners and rising up to 10% of AGI for those earning over $100,000.
• RAP includes interest subsidies to prevent negative amortization and a principal payment match of up to $50 per month.
• The repayment term for RAP is 30 years, after which any remaining loan balance is forgiven.
What Is the Repayment Assistance Plan?
The RAP plan for federal student loans is a new income-driven repayment plan that was designed to simplify income-driven repayment and will eventually replace existing IDR plans — of which there are currently four. It will be one of only two repayment plans available to borrowers who take out a new federal loan on or after July 1, 2026. Additionally, RAP will be available for borrowers who are currently on another IDR plan.
How the Repayment Assistance Plan Works
The Repayment Assistance Plan sets monthly base payments to a percentage of borrowers’ adjusted gross income (AGI). Base payments start at $10 per month for the lowest income earners and go up to 10% of borrowers’ annual AGI, if they earn more than $100,000 annually.
The plan doesn’t have payment caps, so some borrowers’ RAP payments could be higher than on the previous year’s plans. However, RAP does away with negative amortization. If your monthly payment isn’t enough to cover the accrued interest, the Education Department will subsidize the remaining interest. Additionally, if your payment chips away at less than $50 of your loan principal per month, the government will apply a payment of up to $50 toward your principal to help you make repayment progress.
RAP’s repayment period spans 30 years. After a borrower makes 360 qualifying payments, any remaining balance is forgiven.
Eligibility and Loan Requirements
Borrowers with the following eligible loans can enroll in the Repayment Assistance Plan:
• Subsidized Direct Loans
• Unsubsidized Direct Loans
• Graduate PLUS Loans
• Direct Consolidation Loans
Parent PLUS Loans — and Direct Consolidation Loans that include a Parent PLUS Loan — aren’t eligible for RAP. Borrowers with a Direct Loan that was made before July 1, 2026 can choose to enroll in RAP, but for borrowers with new loans made on or after July 1, 2026, RAP will be their only available income-driven repayment plan.
How RAP Payments Are Calculated
Borrowers whose AGI is $10,000 or less pay a minimum $10 per month ($120 annually); this is the lowest possible monthly payment under RAP.
For every $10,000 AGI above that, borrowers’ base payment increases an additional 1% of their AGI, annually. For example, monthly payments for borrowers with an AGI of $10,001 to $20,000 pay 1% of their annual AGI, then it’s 2% for an AGI of $20,001 to $30,000, 3% for an AGI of $30,001 to $40,000, and so on. Borrowers earning more than $100,000 pay 10% of their annual AGI.
If you have children, you can reduce your base payment by $50 per child dependent, though you will always have to pay at least $10 per month. If married borrowers file a joint tax return, the AGI of both spouses is included in the payment calculation. For those who are married, but file their taxes separately, the nonborrower spouse’s AGI isn’t considered.
Repayment Assistance Plan vs Income-Driven Repayment
The Repayment Assistance Plan and the IDR plans available in previous years retain some broad similarities. They both modify borrowers’ minimum monthly payment based on income factors, and offer some type of interest subsidy feature. Repayment terms are also longer, compared to the existing 10-year Standard Repayment Plan, and if a balance remains after the term ends, it’s forgiven.
However, there are considerable differences between RAP and the prior year’s income-driven repayment plan options. These distinctions include the specific formulas and income variables used to determine payment, term lengths, and how family dependents influence payments.
Recommended: Student Loan Help Center
Differences Between SAVE, PAYE, and ICR
Let’s take a closer look at how RAP differs from the three payment plans that are being discontinued: the Saving on a Valuable Education (SAVE) plan, the Pay As You Earn (PAYE) plan, and Income-Contingent Repayment (ICR).
| Feature | RAP | SAVE | PAYE | ICR |
|---|---|---|---|---|
| Payment amount | $10, or 1%-10% of AGI | 10% of discretionary income | 10% of discretionary income | Lesser of 20% of discretionary income or what you would pay on a 12-year plan with a fixed payment |
| Repayment term in years | 30 | 20 or 25 | 20 | 25 |
| Family size/dependents | Flat $50 monthly discount, per child dependent | Factored into payment calculation | Factored into payment calculation | Factored into payment calculation |
| Unpaid interest | Monthly unpaid interest is waived | Monthly unpaid interest is waived | Monthly unpaid interest is waived for first 3 years (subsidized loans only) | Monthly unpaid interest is waived for first 3 years (subsidized loans only) |
Pros and Cons of the Repayment Assistance Plan
You’ve probably already guessed that the new RAP plan for student loans has some advantages and disadvantages. Here’s how they stack up:
Pros
• Interest subsidy. Loans that are experiencing negative amortization will have remaining unpaid interest paid for by the government.
• Matching principal payment. Those whose monthly payments cover less than $50 of their principal will receive up to a $50 principal payment match.
• Spousal income omitted for separate tax filers. Borrowers who are married but file taxes separately are allowed to leave their spouse’s AGI out of RAP payment calculations.
Cons
• Doesn’t account for inflation. RAP uses AGI to calculate payments, instead of discretionary income, which factors in inflation-influenced poverty line thresholds. Translation: Your RAP payment due won’t change if inflation eats into your available cash.
• Higher monthly payments. Even the borrowers in the lowest income tiers must make higher monthly payments under RAP, compared to sunsetting plans like SAVE.
• Longer term for forgiveness. RAP extends the goal post for federal student loan forgiveness to 30 years, compared to current IDR timelines of 20 or 25 years.
• Any new loans lose access to other IDR. If you have old loans enrolled in other IDR plans, borrowing any new loan on or after July 1, 2026 makes RAP your only IDR option for all of your loans. If you are considering a student loan refinance for existing loans, it’s a good idea to acquaint yourself with the new RAP as part of your research process.
How to Enroll in the Repayment Assistance Plan
Borrowers who plan on taking a new Direct Loan can enroll in the Repayment Assistance Plan when it launches on July 1, 2026. To do so, contact your loan servicer to request the new income-driven plan for your loan. Your other option for repayment won’t be an income-driven plan. The only other option after July 1, 2026 will be a new Standard plan with four fixed repayment terms of 10, 15, 20, or 25 years, based on the amount you borrow.
Enrollment Timing and Required Documentation
If you have student loans that were made before July 1, 2026, you’ll need to pay close attention to enrollment transfer timelines. As is always the case with student loans, paying attention to detail and being proactive are key when it comes to keeping your student loan out of the collections process.
If you’re currently on an IDR plan that’s being eliminated — i.e. SAVE, PAYE, or ICR — keep your eye on the June 30, 2028 deadline. As long as you don’t take out any new federal student loans after July 1, 2026, you are eligible to enroll in the Standard, Graduated, Extended, or current Income Based (IBR) repayment plans, or you may opt in to the new RAP. But if you are a current borrower enrolled in ICR, PAYE, or SAVE, you must transition to a different repayment plan (current IBR, current Standard plan, or RAP) by July 1, 2028. If you don’t make a choice by that date, your loans will be moved into RAP automatically. Don’t just hit “snooze” until 2028, though. Keep tabs on student loan news in case further changes occur over the next two years.
When switching IDR plans, have your proof of income ready. This can be done using your tax return information, either by authorizing an IRS data transfer via your StudentAid.gov account or by manually uploading your financial information.
The Takeaway
Depending on your financial situation and repayment goals, the new RAP plan might make managing student loan debt more challenging. If you have existing student loans, it’s important to understand what a RAP student loan is, even if you aren’t planning on doing any additional borrowing. Between now and July 1, 2028 you’ll have some choices to make about how you’ll repay your loan and switching to a RAP is one of several options. If you’re a new student loan borrower, as of July 1, 2026, the RAP will be one of just two repayment options — and the only income-driven repayment plan — available to you.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
FAQ
Are graduate student loans treated differently under RAP?
No, graduate student loans aren’t treated differently under the RAP repayment plan. However, effective July 1, 2026, there will be annual borrowing caps on graduate and professional Direct Loan limits to $20,500 and $50,000, respectively. Aggregate limits also apply.
Are existing borrowers eligible for RAP or only new borrowers?
Existing federal student loan borrowers with Direct Loans made before July 1, 2026 can choose to switch from their existing plan to RAP through July 1, 2028. For any new Direct Loans made after July 1, 2026, RAP will be the only available IDR plan.
Is there a minimum monthly payment under the Repayment Assistance Plan?
The minimum monthly student loan payment under the new Repayment Assistance Plan is $10. This flat payment requirement is for borrowers with an adjusted gross income under $10,000. Some borrowers with higher incomes may pay only $10 if they have dependent children which reduce their payment amounts to the minimum.
Does interest continue to accrue under the Repayment Assistance Plan?
Under RAP, the possibility for negative amortization — when accrued interest outpaces how much monthly payments chip away at the loan balance — is removed. The government will subsidize any interest that isn’t covered by your monthly payment, and will provide up to $50 toward your principal as long as your payment is made on time.
How is RAP different from income-driven repayment plans?
RAP differs from previous years’ income-driven repayment plans in terms of how monthly payments are calculated, the lowest possible payment amount for the lowest-earning borrowers, and the plan’s repayment period. For RAP, payments are as low as $10 per month up to 10% of a borrower’s adjusted gross income (AGI) over a 30-year term.
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