Wealthy PotRepayment Assistance Plan (RAP): Payments, Rules and Calculator
The Repayment Assistance Plan (RAP) is the income-driven repayment plan for federal student loans created by the One Big Beautiful Bill Act (Public Law 119-21). It started on July 1, 2026. Your payment is a flat 1% to 10% of your adjusted gross income, depending on your income band, minus $50 a month for each dependent, and never less than $10. Interest your payment doesn't cover is waived, and any balance left after 30 years of payments is cancelled.
The Short Answer
- Payment: your AGI times the rate for its band (1% just above $10,000, rising one point per $10,000, 10% above $100,000), divided by 12, minus $50 per dependent, at least $10 a month. AGI of $10,000 or less pays $120 a year.
- No growing balance on time: if an on-time payment doesn't cover the month's interest, the rest is not charged, and the Education Department adds up to $50 so your principal falls by at least $50 (or by what you paid, if less).
- Forgiveness: after 360 qualifying payments (30 years). That forgiveness is taxable federal income under current law.
- PSLF: on-time RAP payments count toward Public Service Loan Forgiveness (120 payments, tax-free).
- Who: any Direct Loan borrower except Parent PLUS. For loans made from July 1, 2026, RAP is the only income-driven plan.
RAP Payment Calculator
Enter the AGI from your latest tax return (joint AGI if you are married and file jointly), your dependents and your federal loans. The calculator applies the formula in the law, the interest waiver and the principal match, and projects 30 years at the same income.
RAP Payments by Income
The rate applies to your whole AGI, not just the part above a threshold, so a small raise that crosses into a new band raises the payment on every dollar. Monthly payments by AGI and number of dependents:
| AGI | Rate | No dependents | 1 dependent | 2 dependents |
|---|---|---|---|---|
| $9,000 | $120 a year | $10 | $10 | $10 |
| $25,000 | 2% | $41.67 | $10 | $10 |
| $35,000 | 3% | $87.50 | $37.50 | $10 |
| $45,000 | 4% | $150 | $100 | $50 |
| $55,000 | 5% | $229.17 | $179.17 | $129.17 |
| $65,000 | 6% | $325 | $275 | $225 |
| $85,000 | 8% | $566.67 | $516.67 | $466.67 |
| $120,000 | 10% | $1,000 | $950 | $900 |
Our arithmetic with the formula in 20 U.S.C. 1087e(q). Bands: over $10,000 to $20,000 is 1%, over $20,000 to $30,000 is 2%, and so on to 9% for over $90,000 to $100,000; over $100,000 is 10%.
The Education Department's own example: a single borrower with no dependents, $35,000 of debt and $45,000 of income pays $150 a month under RAP, against $176 under the earlier income-driven plans, with about $40 of interest waived and a $50 principal match each month.
Interest Waiver and Principal Match
Two features keep a low payment from letting the balance grow, as long as each payment is on time:
- Interest waiver: if your payment is less than the interest that accrued that month, the unpaid interest "shall not be charged to the borrower," the law says.
- Principal match: if your payment lowers your principal by less than $50, the department reduces the principal further, so the total reduction equals $50 or the amount you paid, whichever is less. It does not apply during deferment or forbearance.
A hypothetical borrower with $40,000 at 6% and AGI of $30,000 pays $50 a month. Interest is $200 a month, so $150 is waived each month and the $50 match brings the principal down by $50. After a year the balance is $39,400; after 30 years of the same income about $22,000 would be cancelled (our arithmetic with the calculator above).
Who Can Use RAP
- Eligible: Direct Loan borrowers, including those with older loans. Parent PLUS loans and consolidation loans that repaid a Parent PLUS loan are excluded.
- New loans from July 1, 2026: only RAP or the Tiered Standard plan are available for them. The law reads as applying to the borrower's older loans too, but the department's final rule is worded less clearly, so check with your servicer before taking a new loan if you are on IBR.
- SAVE borrowers: the SAVE plan was vacated on March 10, 2026. Servicers began sending notices on July 1, 2026, each giving at least 90 days to choose a plan; borrowers who don't choose are placed on a standard plan, not RAP. Our SAVE borrower guide covers the deadline and options.
- PAYE and ICR borrowers: must leave those plans before July 1, 2028; if they don't, the law places RAP-eligible loans in RAP.
- Married borrowers: use joint AGI if you file jointly; if you file separately, only your own AGI and the dependents on your own return count.
RAP vs IBR and the Tiered Standard Plan
IBR stays open for loans made before July 1, 2026: 10% of income above 150% of the poverty line with forgiveness after 20 years for borrowers who first borrowed on or after July 1, 2014, otherwise 15% and 25 years. Because IBR exempts income up to 150% of the poverty line, it can be lower than RAP for some lower incomes, and it forgives sooner. But months on RAP do not count toward IBR forgiveness, so switching between the two resets the clock you are aiming for. Compare both on your servicer's estimate before choosing.
The Tiered Standard plan is a fixed payment over a term set by your total Direct Loan principal when you enter repayment:
| Total principal | Repayment term |
|---|---|
| Under $25,000 | 10 years |
| $25,000 to under $50,000 | 15 years |
| $50,000 to under $100,000 | 20 years |
| $100,000 or more | 25 years |
Tiered Standard payments do not count toward PSLF, and there is no forgiveness at the end. Our student loan forgiveness guide covers the other programs and the end of SAVE.
Forgiveness, PSLF and Taxes
- After 360 qualifying payments the remaining balance is cancelled, provided your last payment before cancellation was under RAP. Qualifying payments include on-time RAP payments and some payments under other plans the law lists.
- PSLF: on-time RAP payments count (see our PSLF guide), so a public service worker can reach forgiveness after 120 payments, tax-free under 26 U.S.C. 108(f)(1). RAP months in deferment or forbearance do not count, and PSLF buyback is not available for them.
- Taxes: the 2021-2025 exclusion for student loan forgiveness expired. Forgiveness at the end of RAP is generally taxable federal income under current law, unless an exclusion such as insolvency applies. Death and disability discharges are permanently tax-free.
Sources & Methodology
- Public Law 119-21, section 82001: the Repayment Assistance Plan (new 20 U.S.C. 1087e(q)), the Tiered Standard plan and the transition from ICR-type plans; section 70119 for taxes.
- Education Department final rule, May 1, 2026: RAP eligibility (34 CFR 685.209), RAP months and IBR, PSLF.
- Missouri v. Trump, order of March 10, 2026: SAVE vacated.
- 26 U.S.C. 108(f): tax treatment of student loan discharges.
Method notes. Payment figures and the calculator use the statutory formula; the calculator rounds to the cent and assumes simple monthly interest, constant AGI and family size, and on-time payments. Your servicer's figure, based on your tax data, is the one that counts. The department's example comes from its RAP fact sheet.
This article is general information, not financial or tax advice. Facts checked on October 20, 2026.
FAQ
How is the RAP payment calculated?
Take your AGI, multiply by the rate for its band (1% for $10,000 to $20,000 up to 10% above $100,000), divide by 12, and subtract $50 for each dependent. The minimum is $10 a month; AGI of $10,000 or less pays $120 a year.
When did the Repayment Assistance Plan start?
July 1, 2026, under Public Law 119-21.
Is RAP better than IBR?
It depends on income and family size. RAP waives unpaid interest and adds a principal match, but forgives after 30 years; IBR forgives after 20 or 25 years and only for loans made before July 1, 2026. RAP months don't count toward IBR forgiveness.
Do RAP payments count for PSLF?
Yes. On-time RAP payments are qualifying payments for Public Service Loan Forgiveness.
Is RAP forgiveness taxable?
Under current law, generally yes: the federal exclusion for student loan forgiveness covered only 2021 through 2025. PSLF and death or disability discharges stay tax-free.
Can Parent PLUS loans use RAP?
No. Parent PLUS loans, and consolidation loans that repaid them, are excluded from RAP.