A major shake-up is coming to federal student loan repayment starting July 1, 2026. The new Repayment Assistance Plan (RAP)—introduced under former President Donald Trump’s “big, beautiful bill”—will become the default income-based repayment option for most federal student loan borrowers.
RAP is designed to simplify repayment, but it also replaces several existing income-driven repayment (IDR) plans. For some borrowers, it may mean lower monthly payments—but over a much longer period, possibly increasing total repayment costs.
⚡ RAP Overview at a Glance
-
Launch Date: July 1, 2026
-
Forgiveness Timeline: 30 years
-
Monthly Payments: 1%–10% of adjusted gross income (AGI)
-
Minimum Payment: $10 (for AGI under $10,000)
-
Eligible Loans: Federal Direct Loans and Grad PLUS Loans
-
Not Eligible: Parent PLUS Loans
Who Is RAP Best For?
Borrowers with high debt and low-to-moderate income, especially those taking out loans on or after July 1, 2026. These new borrowers will no longer be eligible for legacy IDR plans like SAVE, PAYE, or ICR.
📅 RAP Rollout Timeline & Key Deadlines
| Date | What Happens |
|---|---|
| July 1, 2026 | RAP launches. Available to all federal borrowers. New borrowers limited to RAP or standard plan. |
| July 1, 2026 – June 30, 2028 | Existing borrowers can remain in SAVE, PAYE, ICR, or IBR. Must switch to IBR by June 30, 2028, to stay in an IDR plan. |
| July 1, 2028 | Borrowers still in SAVE, PAYE, or ICR will be automatically moved to RAP. IBR will no longer be an option for them. |
🧾 RAP Eligibility and Loan Type Rules
✅ Who Qualifies for RAP
-
Federal Direct Loan borrowers
-
Graduate PLUS Loan borrowers
-
Borrowers who take out any new loan on or after July 1, 2026
❌ Who Doesn’t Qualify
-
Parent PLUS borrowers
-
Unless loans are consolidated before July 1, 2026, and enrolled in ICR by July 1, 2028
-
Important: If you take out any new loan after July 1, 2026—even if you have older loans—all your loans must switch to RAP or standard repayment.
💡 Example: What Happens If You Borrow After July 1, 2026
-
You started college in 2024 and borrowed under SAVE
-
In 2026, you borrow again for the 2026–27 year
-
Because of the new borrowing date, all loans become ineligible for IBR, SAVE, PAYE, or ICR
📊 How RAP Monthly Payments Are Calculated
RAP uses Adjusted Gross Income (AGI) instead of discretionary income. Your payment tier is based on your income bracket from the previous tax year.
RAP Income Brackets & Payment Tiers
| Annual AGI | Payment Rate |
|---|---|
| $0 – $10,000 | $10/month flat rate |
| $10,001 – $20,000 | 1% of AGI |
| $20,001 – $30,000 | 2% of AGI |
| $30,001 – $40,000 | 3% of AGI |
| $40,001 – $50,000 | 4% of AGI |
| $50,001 – $60,000 | 5% of AGI |
| $60,001 – $70,000 | 6% of AGI |
| $70,001 – $80,000 | 7% of AGI |
| $80,001 – $90,000 | 8% of AGI |
| $90,001 – $100,000 | 9% of AGI |
| $100,001+ | 10% of AGI |
RAP Monthly Payment Formula:
(Annual RAP base payment ÷ 12) – $50 per dependent child = Estimated monthly payment
👨👩👧👦 What About Parent PLUS Borrowers?
Parent PLUS loans are not eligible for RAP. However, there’s a workaround:
To stay on an IDR plan:
-
Consolidate your Parent PLUS loans before July 1, 2026
-
Enroll in Income-Contingent Repayment (ICR) before July 1, 2028
-
Transition to IBR after one ICR payment
If you miss these steps, you’ll be locked into the standard 10-year plan, even on older loans.
🏛️ RAP and Public Service Loan Forgiveness (PSLF)
If you borrow on or after July 1, 2026 and work in public service, you must use RAP to qualify for Public Service Loan Forgiveness (PSLF).
🤔 RAP vs. Existing Income-Driven Repayment Plans
| Plan | Forgiveness Time | Payment Basis | Lowest Payment | Family Size Adjustment | Interest Benefits |
|---|---|---|---|---|---|
| RAP | 30 years | 1–10% of AGI | $10 | $50 off/month per child | No interest growth on unpaid balance |
| IBR | 20 or 25 years | 10–15% of discretionary income | As low as $0 | Full family considered | Partial interest subsidy |
| SAVE | 20 or 25 years | 10% of discretionary income | As low as $0 | Full family considered | Full unpaid interest subsidy |
| ICR | 25 years | 20% of discretionary income | As low as $0 | Full family considered | No interest subsidy |
| PAYE | 20 years | 10% of discretionary income | As low as $0 | Full family considered | Partial interest subsidy |
⚠️ Key Differences That May Cost You
-
RAP doesn’t adjust for inflation – payments are based on raw AGI
-
Family discounts are limited – only dependent children count
-
No $0 payment option – even unemployed borrowers pay at least $10/month
-
More expensive than SAVE – across all income levels, according to borrower advocacy groups
🛡️ How Existing Borrowers Can Avoid Being Auto-Enrolled in RAP
If you’re currently on SAVE, PAYE, or ICR, you’ll be automatically moved into RAP after July 1, 2028, unless you switch to IBR.
To avoid being forced into RAP:
-
Enroll in IBR at studentaid.gov/IDR
-
Do so before June 30, 2028
-
Once in IBR, you can stay indefinitely or choose to switch later
🔍 Bottom Line: Is RAP Right for You?
| Consider RAP if… | Avoid RAP if… |
|---|---|
| You’re a new borrower after July 1, 2026 | You qualify for IBR and prefer more flexibility |
| You have no access to other IDR plans | You want lower payments with SAVE |
| You don’t mind longer repayment (30 years) | You may benefit from shorter forgiveness |
✅ What to Do Now
-
If you already have federal loans, evaluate whether switching to IBR makes sense
-
If you’re planning to borrow in 2026 or later, prepare for RAP to be your only income-based option
-
Track deadlines and apply early—applications can take time to process
Need help deciding? Stay tuned to Creditvana.com for tools, calculators, and up-to-date advice to help you manage your student loans smarter.
