rewrite this title What Is the New Repayment Assistance Plan (RAP) for Student Loans? – NerdWallet

The Repayment Assistance Plan, or RAP, is the newest student loan repayment plan, created from President Donald Trump’s “big, beautiful bill.”

The plan is slated to roll out on July 1, 2026. It will replace the existing income-driven repayment program. While some borrowers might have lower monthly bills on RAP compared to existing income-driven repayment plans, they may also see a longer repayment term and pay more overall.

Most federal student loan borrowers can access RAP, including borrowers with graduate school debt. However, parent PLUS loan borrowers aren’t eligible.

New and existing borrowers may sign up for RAP starting on July 1, 2026.

If you took out all of your student loans prior to July 1, 2026, you will have these repayment options going forward:

The Education Department will eliminate the Saving on a Valuable Education (SAVE), Pay as You Earn (PAYE) and Income-Contingent Repayment (ICR) plans by July 1, 2028. IBR and RAP will be your only income-driven options.

If you take out a new student loan on or after July 1, 2026, all of your loans will become ineligible for IBR, along with the graduated and extended plans. (July 1, 2026 is the first day you can take out a federal student loan for the 2026-27 academic year.)

Instead, you will only have two repayment options:

This is the case even if you have some older loans, because you must repay all loans on the same repayment plan. For example:

RAP monthly payments are graduated based on your annual adjusted gross income (AGI) in the previous tax year. The more you earn, the larger the slice of your income you’ll pay each month toward your student loans.

Once you have your base payment, use this formula to calculate your monthly RAP bill:

(RAP base payment / 12) – $50 per dependent = Estimated monthly RAP payment

If you have existing parent PLUS loans, and you want lower payments based on income at any point in the future, you must do the following:

These moves will allow you to transition to the IBR plan, so you can stay in the income-driven repayment system until you pay off your loans. If you don’t do this, the standard repayment plan will be your only option going forward.

Any borrowers who take out a new parent PLUS loan on or after July 1, 2026 can only access the standard plan — including for any older parent PLUS loans. Keep this in mind if you have a student who is currently in college.

Borrowers who take out loans on or after July 1, 2026, must choose RAP in order to benefit from Public Service Loan Forgiveness (PSLF). PSLF forgives remaining federal student debt after 10 years of working a public service job and making student loan payments.

Though the RAP still ties payments to income, it has a few key differences from existing income-driven repayment plans. For example:

RAP doesn’t take inflation into account. RAP uses adjusted gross income (AGI) to calculate payments, while IDR plans use discretionary income.

Discretionary income for IDR plans is the difference between your income and 100%, 150% or 225% of the federal poverty line. Additionally, the federal poverty line changes over time in response to inflation, so discretionary income — and student loan payments — change as a result.

AGI is your income minus some tax deductions, and it does not take inflation over time into account. That means RAP payments may become more difficult to manage in the long-term.

Changes to family size discounts. IDR plans adjust payments based on family size — which may include parents or other adults in your home. The RAP calculation only considers dependent children.

No $0 payments. Unlike income-driven repayment plans, you’ll never have $0 monthly payments on RAP if you lose your job or have a very low income. The lowest payment you can have is $10.

RAP is more expensive than SAVE for all borrowers. Borrowers face higher monthly payments on RAP than on SAVE, regardless of their income or family size, according to a recent analysis by the Student Borrower Protection Center, a nonprofit borrower advocacy and research group. Introduced by the Biden administration, SAVE was previously the most affordable student loan plan.

The ICR plan is the only existing income-driven option that is consistently more expensive than RAP, the analysis found.

If you’re currently enrolled in one of the three income-driven repayment plans that are going away — SAVE, PAYE or ICR — your student loan servicer will automatically move you into the RAP by July 1, 2028. There’s no going back.

You can avoid RAP by signing up for the Income-Based Repayment (IBR) plan on studentaid.gov/IDR before July 1, 2028 — at the very latest. Don’t delay your IBR enrollment, since applications can take time to process, and the Education Department may try to speed up this deadline.

If you enroll in IBR, you can stay on that plan until you pay off your loans. You’ll still have the option to switch to RAP or the standard plan down the line.

The better repayment plan — RAP or IBR — depends on your income, overall financial situation, family size and student debt amount. Before choosing between RAP and IBR, compare your estimated monthly payments, total repayment costs and forgiveness timelines under each plan.