How the Repayment Assistance Plan works
The Repayment Assistance Plan (RAP) is the new federal income-driven repayment plan created by the 2025 reconciliation law (the One Big Beautiful Bill Act, P.L. 119-21). Starting July 1, 2026, it becomes the primary income-driven option for federal Direct Loan borrowers, and the only income-driven plan available to most new borrowers. You can apply online at StudentAid.gov.
Your required monthly payment is a base percentage of your adjusted gross income (AGI), divided by 12. The percentage rises with income — from 1% up to a maximum of 10% — then the result is reduced by $50 for each dependent you claim on your tax return. Your payment is never less than $10 a month.
RAP base payment percentage by income
| Adjusted gross income (AGI) | Base payment |
|---|---|
| Not more than $10,000 | $120 / yr |
| $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 |
| More than $100,000 | 10% of AGI |
The base payment is the annual figure before dependents. Divide it by 12 for the monthly amount, subtract $50 per dependent, and apply the $10 minimum.
Two features that make RAP different
RAP is designed so your balance falls even when your payment is small — through two guarantees that no earlier income-driven plan offered together.
Forgiveness and who qualifies
Any remaining balance is forgiven after 30 years (360 qualifying monthly payments) under RAP. Borrowers working toward Public Service Loan Forgiveness (PSLF) may still reach forgiveness after 10 years. Forgiven amounts may be treated as taxable income.
RAP is available to Direct Loan borrowers, including Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for graduate or professional students, and Direct Consolidation Loans — except consolidation loans that include a Parent PLUS loan, which are not eligible for RAP.
How this calculator works
The tool applies the statutory base-payment table above to your AGI, divides the annual base payment by 12, subtracts $50 for each dependent, and enforces the $10 monthly minimum. If you enter a loan balance and interest rate, it computes a first-month snapshot: the interest that accrues that month, how much unpaid interest is waived if your payment is smaller, and the matching principal payment that guarantees your principal falls by at least the amount you paid (up to $50). The snapshot is a single-month illustration; your actual AGI, dependents and balance change over time, so a full 30-year projection will differ. This tool estimates the federal RAP payment only and is not financial advice.
- Federal Student Aid servicer — Repayment Assistance Plan (RAP): base payment table, $50 dependent reduction, $10 minimum, interest subsidy, matching principal, 30-year forgiveness
- Congressional Research Service — The Repayment Assistance Plan (RAP) in P.L. 119-21
- StudentAid.gov — Income-Driven Repayment plans overview
Frequently asked questions
When can I enroll in RAP?
Applications open at StudentAid.gov on July 1, 2026. RAP becomes the main income-driven plan for new federal Direct Loan borrowers.
Does my spouse's income count?
If you file a joint federal tax return, RAP uses your combined AGI. If you file separately, only your own AGI and the dependents on your return are used. If your spouse also has federal student loans, your payment may be adjusted.
Is RAP better than IBR?
It depends on your income and balance. RAP can produce a lower payment for lower earners and, unlike older plans, waives unpaid interest and guarantees principal reduction — but its forgiveness horizon is 30 years. Compare your specific numbers before switching. Use the official Loan Simulator at StudentAid.gov to confirm.
Will interest capitalize under RAP?
No. Unpaid interest is waived each month you pay on time rather than being added to your balance, so it does not capitalize.