Repayment Assistance Plan (RAP): What It Is, How It Works

The Repayment Assistance Plan (RAP) is a new income-driven repayment option for federal student loan borrowers. It’s a key component of the sweeping federal student loan policy overhaul that took effect July 1, 2026. Depending on when your loans were disbursed, it may be one of only a few repayment plans available to you.

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What is the RAP?

RAP is the newest income-driven repayment plan for eligible federal student loan borrowers. It became available July 1, 2026, as part of the federal student aid overhaul.

Like other income-driven repayment plans, RAP bases your monthly payment on your income and family size rather than your loan balance. However, instead of using discretionary income, RAP calculates payments based on your adjusted gross income (AGI). Depending on how much you earn, you’ll pay between 1% and 10% of your AGI each year. Any remaining balance is forgiven after 30 years of qualifying payments.

How are RAP payments calculated?

Under RAP, your monthly payment is based on the income reported on your federal tax return after certain deductions. The larger that amount is, the bigger the percentage of it that goes toward your student loan payment will be.

Your annual payment amount is divided into 12 equal monthly payments. You’ll also receive a $50 monthly payment reduction for each qualifying dependent claimed on your tax return. However, your payment can’t be reduced below $10 per month.

RAP also includes protections designed to keep your balance from growing. If your monthly payment doesn’t cover all the interest that accrues, the unpaid amount is waived instead of added to your balance. If your payment reduces your principal by less than $50 in a given month, the federal government contributes enough to bring the total principal reduction up to $50.

Who qualifies for RAP?

RAP is available to borrowers with the following types of Direct Loans:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans for graduate and professional students
• Direct Consolidation Loans that don’t include parent PLUS loans

Your repayment options depend on when your loans were disbursed. Borrowers with federal student loans from before July 1, 2026, may qualify for RAP or certain older repayment plans. 

Borrowers with any loans disbursed on or after July 1, 2026, can choose between RAP and the Tiered Standard Repayment Plan.

There is no maximum income limit to qualify.

Are parent PLUS loans eligible for RAP?

Parent PLUS loans are not eligible for RAP, even though they’re part of the Direct Loan program. Direct Consolidation Loans that include a parent PLUS loan also aren’t eligible for RAP. 

Should you choose RAP or IBR?

Both RAP and Income-Based Repayment (IBR) calculate your monthly payment on your income and family size, and can eventually lead to loan forgiveness. But these two plans use different payment formulas and have different forgiveness timelines.

Here’s an overview of how IBR vs. RAP differ:

How does RAP affect borrowers on SAVE?

The Department of Education eliminated the Saving on a Valuable Education (SAVE) Plan in March 2026 following a federal court ruling. Borrowers enrolled in SAVE in July 2026 began receiving notices from their loan servicers directing them to choose a new repayment plan within 90 days.

Former SAVE borrowers may be able to enroll in RAP. Borrowers who don’t select a new plan by the deadline may be automatically placed on the Standard Repayment Plan or the new Tiered Standard Repayment Plan. 

Learn More: Current Federal Student Loan Repayment Plans 

Does RAP count toward PSLF?

Qualifying payments made under RAP count toward Public Service Loan Forgiveness (PSLF). To qualify for PSLF, you need to make 120 on-time, monthly payments while working for a qualifying employer.  

What to consider before enrolling in RAP 

Before enrolling in RAP, compare your repayment options carefully. The right plan depends on your loan types, income, monthly payment, and whether you’re pursuing loan forgiveness.

Consider taking these steps:

• Review your federal loan types: Not all federal loans qualify for RAP, so start by confirming whether you have Direct Loans and whether any parent PLUS loans could affect your eligibility. 
• Check your current repayment plan: If you’re enrolled in another income-driven repayment plan, find out whether you need to switch plans and, if so, what the deadline is.
• Compare your estimated payments: Use the Department of Education’s Repayment Calculator to compare estimated monthly payments and total lifetime costs under both RAP and IBR. 
• Update your contact information: Make sure the mailing address, email address, and phone number your loan servicer has on file are current, so you won’t miss important notices.
• Certify your employment: If you’re working toward PSLF, submit your employment information once a year to ensure your payments are accurately tracked.
• Be cautious about refinancing: Think carefully before refinancing federal loans with a private lender. In some cases, this could lower your interest rate, but you’ll permanently lose access to federal benefits like RAP, IBR, and other protections such as deferment and forbearance.