A major shift in student loan repayment is coming. Beginning July 1, 2026, the Repayment Assistance Plan (RAP)—created as part of former President Donald Trump’s “big, beautiful bill”—will officially launch.
This new plan will replace most existing income-driven repayment (IDR) options. While RAP may offer lower monthly payments for some borrowers, it comes with a longer repayment term and could result in paying more over time.
If you have federal student loans or plan to borrow in the future, here’s what you need to know.
🔍 What Is the Repayment Assistance Plan (RAP)?
RAP is a new federal student loan repayment option that bases monthly payments on your adjusted gross income (AGI)instead of discretionary income (as used in current IDR plans). It features:
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Repayment term: 30 years until forgiveness
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Monthly payments: Between $10 and 10% of AGI, depending on income
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Eligibility: Most federal student loan borrowers with Direct Loans or Grad PLUS Loans
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Not eligible: Parent PLUS borrowers cannot use RAP
Best for: Borrowers with high debt relative to their income, especially those taking out new loans after July 1, 2026.
🗓️ RAP Timeline & Key Deadlines
| Date | What Happens |
|---|---|
| July 1, 2026 | RAP becomes available. New borrowers can only choose RAP or standard repayment. |
| July 1, 2026 – June 30, 2028 | Borrowers with only pre-July 2026 loans can remain in IDR (SAVE, PAYE, ICR, or IBR). Must switch to IBR by June 30, 2028 to avoid being moved to RAP. |
| July 1, 2028 | Borrowers still on SAVE, PAYE, or ICR are automatically transitioned to RAP. |
👉 Tip: If you want to stay on a traditional income-driven plan, switch to Income-Based Repayment (IBR) before June 30, 2028.
💸 How RAP Monthly Payments Are Calculated
RAP ties payments to your previous year’s AGI, not discretionary income, and does not account for inflation. Here’s a breakdown of base annual payments:
| Annual Income | RAP Base Payment |
|---|---|
| $0 – $10,000 | $10 flat monthly payment |
| $10,001 – $20,000 | 1% of AGI annually |
| $20,001 – $30,000 | 2% of AGI |
| … | … |
| $100,001+ | 10% of AGI |
Monthly Payment Formula:
(RAP base annual payment ÷ 12) – $50 per dependent child = Estimated monthly payment
Example:
If your AGI is $45,000 and you have two dependents:
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4% of $45,000 = $1,800 per year → $150/month
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$150 – ($50 x 2) = $50/month RAP payment
❗ Parent PLUS Borrowers: RAP Is Off the Table
If you have Parent PLUS loans, you are not eligible for RAP. To stay in the income-driven system, you must:
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Consolidate your loans before July 1, 2026
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Enroll in Income-Contingent Repayment (ICR) by July 1, 2028
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After making one ICR payment, switch to Income-Based Repayment (IBR)
If you borrow any new Parent PLUS loan on or after July 1, 2026, all your PLUS loans (even older ones) become ineligible for income-driven repayment.
🧾 How RAP Compares to Current Income-Driven Repayment Plans
| Plan | Repayment Term | Payment Basis | Protected Income? | Family Size Consideration | Interest Treatment |
|---|---|---|---|---|---|
| RAP | 30 years | 1–10% of AGI | ❌ None | ✅ Only dependent children | ✅ No balance growth |
| IBR | 20 or 25 years | 10–15% of discretionary income | ✅ Yes (150% FPL) | ✅ Full family size | ❌ Partial interest waiver |
| SAVE | 20 or 25 years | 10% of discretionary income | ✅ Yes (225% FPL) | ✅ Full family size | ✅ No balance growth |
| ICR | 25 years | 20% of discretionary income | ✅ Yes (100% FPL) | ✅ Full family size | ❌ No interest subsidy |
| PAYE | 20 years | 10% of discretionary income | ✅ Yes (150% FPL) | ✅ Full family size | ❌ Partial interest waiver |
🔁 Can You Avoid Being Moved to RAP?
If you’re currently on SAVE, PAYE, or ICR, and you don’t switch to IBR before July 1, 2028, your loan servicer will automatically move you to RAP.
To avoid this:
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Log in to studentaid.gov/IDR
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Submit your IBR application before June 30, 2028
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Once enrolled, you can remain on IBR or choose RAP or standard repayment later
🎯 Should You Choose RAP or IBR?
It depends on your situation:
| Choose RAP if: | Choose IBR if: |
|---|---|
| You earn a low income but aren’t eligible for IBR | You qualify for IBR and want shorter forgiveness |
| You want fixed calculations based on AGI | You prefer payments adjusted for family size |
| You’re a new borrower after July 1, 2026 | You borrowed before July 1, 2026 |
Before deciding, use the Education Department’s Loan Simulator to compare monthly payments, interest costs, and forgiveness timelines.
🧠 Key Takeaways
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RAP starts July 1, 2026, replacing most existing income-driven plans
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Monthly payments will range from $10 to 10% of AGI
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Parent PLUS loans are not eligible
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Existing borrowers must switch to IBR by June 30, 2028 to avoid auto-enrollment into RAP
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No $0 payments — lowest possible RAP payment is $10
