Updated October 2026. General information for US readers, not personalized financial, tax, insurance or legal advice.
Federal student loan repayment changed in 2026. A new income-driven plan, the Repayment Assistance Plan (RAP), became available on July 1, 2026, and borrowers who take out new loans now have fewer plan choices. Here’s how RAP works and who it’s for.
Key takeaways
- RAP payments are 1% to 10% of your adjusted gross income, with a $10 minimum.
- Your payment drops by $50 a month for each dependent.
- Unpaid interest is waived, and your principal goes down by at least $50 a month.
- Remaining balances are forgiven after 30 years of qualifying payments.
What Is the Repayment Assistance Plan?
RAP was created by the reconciliation law known as the One Big Beautiful Bill Act, signed on July 4, 2025 (Massachusetts Attorney General). It’s an income-driven plan for federal Direct Loan borrowers and went live on July 1, 2026 (Student Loan Planner).
Parent PLUS loans, and consolidation loans that include Parent PLUS loans, are not eligible for RAP (NerdWallet).
How RAP Payments Are Calculated
Your yearly payment is a percentage of your adjusted gross income (AGI), based on your income level. It’s divided by 12, then reduced by $50 for each dependent you claim (Student Loan Planner; NerdWallet).
| Adjusted gross income | Yearly payment |
|---|---|
| $10,000 or less | $120 a year ($10 a month) |
| $10,001 – $20,000 | 1% of AGI |
| $20,001 – $30,000 | 2% |
| $30,001 – $40,000 | 3% |
| $40,001 – $50,000 | 4% |
| $50,001 – $60,000 | 5% |
| $60,001 – $70,000 | 6% |
| $70,001 – $80,000 | 7% |
| $80,001 – $90,000 | 8% |
| $90,001 – $100,000 | 9% |
| $100,001 or more | 10% |
Example 1: AGI of $45,000 with one dependent. 4% of $45,000 is $1,800 a year, or $150 a month. Minus $50 for one dependent, the payment is about $100 a month.
Example 2: Single borrower with AGI of $70,000 and no dependents. 6% is $4,200 a year, or about $350 a month.
Interest and Principal Help
- Interest: if your payment is less than the interest that builds up each month, the unpaid interest isn’t charged (Massachusetts Attorney General).
- Principal: if your payment wouldn’t cut your principal by at least $50 a month, a subsidy makes up the difference so your balance drops by at least $50.
That means your balance shouldn’t grow on RAP as long as you make your payments.
Forgiveness Under RAP
Any remaining balance is forgiven after 30 years, or 360 qualifying monthly payments. That’s longer than the 20 or 25 years in older income-driven plans. For Public Service Loan Forgiveness, RAP payments count toward the 120 payments needed (Student Loan Planner).
Payments must be made on time to count toward forgiveness. Payments made under RAP don’t count toward forgiveness under the older IBR, ICR and PAYE plans, and switching back can mean losing progress made on RAP (Massachusetts Attorney General).
What Changed for Other Plans
- New loans on or after July 1, 2026 (including consolidation loans) can use only RAP or a new tiered Standard Repayment Plan (NerdWallet).
- Loans from before July 1, 2026 still have access to older plans, including IBR, PAYE and ICR.
- PAYE and ICR are scheduled to end on July 1, 2028.
- SAVE has ended, and borrowers leaving it need to choose another plan.
Is RAP Right for You?
RAP can work well if your income is low or moderate compared with your debt, or if you have dependents. Its interest and principal help also stops balances from growing. Borrowers with older loans who are close to forgiveness under IBR may lose progress by switching, so compare carefully first.
Use the official Loan Simulator on studentaid.gov, or contact your loan servicer, to compare your payment on each plan you qualify for.
Watch Out for Student Loan Scams
Enrolling in a federal repayment plan is free at studentaid.gov or through your servicer. Be wary of companies that charge fees to “enroll” you, promise instant forgiveness, or ask for your FSA ID password.
Frequently Asked Questions
When did RAP start?
RAP became available on July 1, 2026.
What is the lowest RAP payment?
$10 a month, for borrowers with an AGI of $10,000 or less.
Can parents use RAP for Parent PLUS loans?
No. Parent PLUS loans and consolidation loans that include them aren’t eligible.
Related Guides
Sources: Massachusetts Attorney General: Repayment Assistance Plan; NerdWallet: What is the new Repayment Assistance Plan?; Student Loan Planner: Repayment Assistance Plan. Rules can change; confirm current details on studentaid.gov.