How the Repayment Assistance Plan Works for Federal Student Loans
By Muntasir • Published Jul 23, 2026 • Updated Aug 08, 2026 • US Student Loans
The Repayment Assistance Plan (RAP) is the new federal income-driven repayment plan that started July 1, 2026. Your monthly payment is 1% to 10% of your adjusted gross income, and any remaining balance is forgiven after 30 years of qualifying payments.
💵 Payment percentage rises with income, from 1% of AGI at the bottom bracket to 10% above $100,000
Payment drops by $50 a month for each dependent you claim on your taxes
Minimum payment is $10 a month, even for borrowers with very low or no income
Unpaid interest is waived every month you make your full payment on time
The government adds up to $50 a month toward your principal if your payment does not cover that much
⏱️ Forgiveness comes after 360 qualifying monthly payments (30 years) for most borrowers
What the Repayment Assistance Plan Is
The Repayment Assistance Plan (RAP) is a new income-driven repayment option for federal Direct Loans, created by the 2025 reconciliation law known as the One Big Beautiful Bill Act. It became available on July 1, 2026, and replaced the old income-driven menu (IBR, PAYE, ICR, SAVE) for anyone taking out a new federal loan after that date. The Department of Education built RAP to tie your payment directly to income and to guarantee your balance shrinks every month you pay on time.
If you already had federal loans before July 1, 2026, and do not take out any new federal loans after that date, you keep access to your old repayment options, including the current Standard, Graduated, Extended, and legacy Income-Based Repayment plans. You can also switch into RAP if it lowers your payment.
How Your Monthly Payment Is Calculated
RAP looks at your adjusted gross income (AGI) from your most recent tax return and applies a percentage that rises in steps as your income rises. Federal Student Aid publishes the bracket schedule below.
| Adjusted gross income | Payment percentage |
|---|---|
| $10,000 or less | $10 flat minimum |
| $10,001 to $20,000 | 1% |
| $20,001 to $30,000 | 2% |
| $30,001 to $40,000 | 3% |
| $40,001 to $50,000 | 4% |
| $50,001 to $60,000 | 5% |
| $60,001 to $70,000 | 6% |
| $70,001 to $80,000 | 7% |
| $80,001 to $90,000 | 8% |
| $90,001 to $100,000 | 9% |
| Above $100,000 | 10% |
Take the percentage for your bracket, apply it to your yearly AGI, and divide by 12 to get your base monthly payment. Then subtract $50 for every dependent listed on your federal tax return. Your payment never drops below $10 a month, no matter how many dependents you claim or how low your income runs.
Interest and Principal Protections
RAP builds in two protections that older plans did not have. If your on-time payment does not cover the interest that built up that month, the Department of Education waives the leftover interest instead of adding it to your balance. If your payment covers interest but reduces principal by less than $50, the government adds a matching contribution up to $50 toward your principal.
Both benefits depend on paying on time. Skip a payment or get approved for a $0 payment month, and you lose the interest waiver and the principal match for that month, per Nelnet's RAP guidance .
Who Can Use RAP
Anyone with eligible Direct Loans can apply for RAP starting July 1, 2026, through the income-driven repayment application on studentaid.gov . Borrowers who took out their first federal loan on or after July 1, 2026, have RAP as their only income-driven choice. Borrowers with older loans can opt into RAP voluntarily or stay on a legacy plan.
Loan Forgiveness Timeline
RAP forgives any remaining balance after 360 qualifying monthly payments, which works out to 30 years. If you work in public service and qualify for Public Service Loan Forgiveness, RAP payments count toward the shorter 120-payment, 10-year PSLF timeline instead.
How to Apply
Apply through the income-driven repayment application at studentaid.gov. Submit income information, either through the IRS data retrieval tool or by uploading tax documents, and recertify your income and family size every year to keep your payment accurate.