The New RAP Student Loan Plan Explained (July 2026)
How the Repayment Assistance Plan calculates payments, who must use it, the $50 principal match, and how it compares with standard repayment.
CalciTools Editorial · · 8 min read
The Repayment Assistance Plan (RAP) is the new income-driven repayment plan for federal student loans. For loans first disbursed on or after July 1, 2026, it’s one of only two choices, alongside the Tiered Standard plan. Borrowers with older loans can switch to it too.
How the RAP payment is calculated
- Take your adjusted gross income (AGI) from your tax return.
- Find your rate: 1% for AGI of $10,001–$20,000, rising one point per $10,000, up to 10% above $100,000. AGI of $10,000 or less pays the $10 minimum.
- Multiply AGI by the rate and divide by 12.
- Subtract $50 for each dependent. The payment can’t go below $10.
| AGI | Dependents | Monthly RAP payment |
|---|---|---|
| $18,000 | 0 | $15 |
| $45,000 | 0 | $150 |
| $45,000 | 2 | $50 |
| $75,000 | 1 | $388 |
| $120,000 | 0 | $1,000 |
Unlike older plans, the percentage applies to your whole AGI — there’s no poverty-line allowance subtracted first. That makes RAP more expensive than IBR or the defunct SAVE plan for many low- and middle-income borrowers, and cheaper for some with large families.
The two built-in protections
- Interest waiver: if your payment doesn’t cover the month’s interest, the unpaid interest is not charged. Your balance can’t grow from interest while you pay on time.
- Principal match: if your payment reduces principal by less than $50, the government adds the difference (up to the amount you paid), so your balance always falls.
Example: a teacher with $60,000 of loans
A teacher with $60,000 of loans at 6.5%, $52,000 AGI and one dependent:
- Standard 10-year: $681/month, $81,755 total.
- Tiered Standard: $447/month, $107,363 total.
- RAP: starts at $167/month; $114,155 paid in total.
- RAP + PSLF: $27,007 paid over 10 years, then $54,000 forgiven tax-free.
For public-service workers, RAP plus Public Service Loan Forgiveness is usually the cheapest path by far. For everyone else, the best plan depends on the ratio of debt to income — the student loan calculator compares every option with your numbers, including what paying extra saves.
Frequently asked questions
When did RAP start?
RAP was created by the One Big Beautiful Bill Act and applies to federal Direct Loans; it is the only income-driven option for loans first disbursed on or after July 1, 2026.
Can my RAP payment be $0?
No. The minimum is $10 a month, unlike older plans such as IBR, which allow $0 payments at low incomes.
Is RAP forgiveness taxable?
RAP forgives any remaining balance after 360 qualifying payments. The federal tax exclusion for income-driven forgiveness that applied through 2025 has expired, so that forgiveness may count as taxable income. PSLF forgiveness remains tax-free.
Sources
Estimates for planning, not financial, tax or legal advice. CalciTools calculators use published government figures and the assumptions shown on each page. Your actual numbers depend on details we don’t model. Check important decisions with a qualified professional.