Repaying Grad School Debt Under the New Repayment Assistance Plan
By Muntasir Minhaz • Published Aug 04, 2026 • Graduate & Professional School
The Repayment Assistance Plan (RAP) replaced SAVE, PAYE, and ICR for federal borrowers starting July 1, 2026. Your monthly payment is set as a percentage of your adjusted gross income, with forgiveness after 30 years of payments.
💵 Payments range from 1% to 10% of your AGI depending on income, with a $10 minimum.
Each dependent you claim cuts your payment by $50 a month.
⏱️ Forgiveness arrives after 360 monthly payments, 30 years total.
Grad PLUS loans stopped for new borrowers on July 1, 2026, replaced by federal caps of $20,500 a year ($100,000 lifetime) for grad students and $50,000 a year ($200,000 lifetime) for professional programs.
What Changed for Grad Borrowers
The One Big Beautiful Bill Act, signed into law in July 2025, rewrote federal student loan repayment for millions of borrowers. Starting July 1, 2026, the Repayment Assistance Plan (RAP) replaced SAVE, PAYE, and ICR as the main income-driven option for federal loans, including the Direct Unsubsidized and former Grad PLUS debt that most graduate students carry.
If your first federal loan came after July 1, 2026, RAP and the Standard repayment plan are your only two choices, according to Earnest's comparison of SAVE and RAP . If you borrowed earlier, older plans including Income-Based Repayment stay available while SAVE, PAYE, and ICR phase out. Log into studentaid.gov/idr to see which plans apply to your loans.
How RAP Calculates Your Payment
RAP sets your monthly payment as a share of your adjusted gross income (AGI) instead of the discretionary income formula SAVE used. The percentage rises in steps as your income increases.
| Adjusted Gross Income | Monthly Payment |
|---|---|
| $10,000 or less | $10 flat |
| $10,001 to $20,000 | 1% of AGI |
| $20,001 to $30,000 | 2% of AGI |
| $30,001 to $40,000 | 3% of AGI |
| $40,001 to $50,000 | 4% of AGI |
| $50,001 to $60,000 | 5% of AGI |
| $60,001 to $70,000 | 6% of AGI |
| $70,001 to $80,000 | 7% of AGI |
| $80,001 to $90,000 | 8% of AGI |
| $90,001 to $100,000 | 9% of AGI |
| Over $100,000 | 10% of AGI |
The plan lowers your payment by $50 a month for each dependent you claim on your tax return, per NerdWallet's breakdown of RAP . If your payment does not cover the interest accruing that month, the government waives the difference so your balance stops growing beyond what you actually owe.
RAP vs the Standard Plan
The Standard plan fixes your payment over 10 years, which clears your balance faster and caps total interest, but the monthly amount does not adjust for your income. RAP lowers your payment when your income is low, useful during a low-paying postdoc, fellowship, or job search, but stretches repayment out for decades if your income stays modest.
Run both scenarios before you pick one. A strong job offer after a PhD or professional degree might pay off faster and cheaper under Standard, while a nonprofit or academic salary might make RAP the safer choice while you look for higher pay.
Forgiveness Takes Longer Than SAVE Offered
RAP forgives your remaining balance after 360 qualifying monthly payments, 30 years total. Graduate borrowers under SAVE were on track for forgiveness after 20 to 25 years, so RAP stretches the timeline for most people carrying grad school debt.
Payments you already made under SAVE, PAYE, or ICR generally count toward your 360-payment total after the switch. Confirm your exact payment count with your loan servicer rather than assuming, since transition tracking has produced errors for some borrowers.
Grad PLUS Ends, New Borrowing Caps Take Over
Grad PLUS loans stopped for new borrowers on July 1, 2026. If you already held a Grad PLUS loan before that date, you keep access to the program for up to three more years or until your program ends, whichever comes first, according to Saving for College's summary of the changes .
New federal borrowing runs through Direct Unsubsidized Loans with annual and lifetime caps: $20,500 a year and $100,000 lifetime for most graduate programs, and $50,000 a year and $200,000 lifetime for professional programs like law and medicine. Once you reach those caps, you need private loans, savings, or program funding to cover the rest.
Programs with high tuition, medicine, law, and some doctoral tracks, are the most exposed to this cap. Talk to your financial aid office early about whether the school covers the gap through institutional loans, and compare private loan rates against federal rates before you sign anything.
How to Apply and Recertify
Apply for RAP through the income-driven repayment application at studentaid.gov/idr. The form pulls your tax return through the IRS data retrieval tool, or you can enter your income manually if that does not work for your situation.
You need to recertify your income and family size every year. If you miss recertification, your servicer moves you to a payment based on outdated or estimated income, which is often higher than what you would pay with updated numbers. Set a reminder around the date you first applied.
If Your Income Changes Mid-Year
A job loss, a new position, or a return to school changes what you owe. Contact your loan servicer directly when your income shifts significantly rather than waiting for the annual recertification, since RAP recalculates your payment based on your most recently documented income.
What to Do Before Your Next Payment
Recalculate your payment on studentaid.gov using your latest tax return.
Compare RAP against the Standard repayment plan and pick based on your realistic income trajectory.
If you plan to borrow for a new program, map your total costs against the new caps before you enroll. Grad PLUS will not fill the gap the way it used to.
Ask your school's financial aid office about assistantships, fellowships, or employer tuition benefits that reduce how much you need to borrow.