The repayment assistance plan is the new federal student loan plan that bases your payment on your income, and my brother found out about it from an email he left unopened for three weeks.
He’s 34, he’d been on the SAVE Plan, and his payment had been sitting at zero for so long that he forgot he had a payment at all. Then the subject line showed up: “You Have 90 Days to Select a New Repayment Plan.” He called me that night, a little panicked, mostly embarrassed.
So I read the official pages on StudentAid.gov and the Department of Education’s fact sheets, sat down with him and a calculator, and built his new number into his budget. This is the plain-English version, with the real math. It’s general education, not financial advice, and your servicer has the final word on your account.
What the repayment assistance plan actually is
RAP is an income-driven plan created by the 2025 reconciliation law, which the Department of Education calls the Working Families Tax Cuts Act and StudentAid.gov files under the One Big Beautiful Bill Act. Same law, two names. Fitting.
It opened to borrowers on July 1, 2026. The basic idea: your monthly payment is a percentage of your adjusted gross income, from 1% to 10%, divided by 12. Then it drops by $50 a month for every dependent on your tax return. It can’t go below $10.
A few things set it apart from the older plans:
- Unpaid interest gets waived. If your full, on-time payment doesn’t cover that month’s interest, the leftover interest is subsidized instead of piling onto your balance.
- There’s a principal match. If your on-time payment doesn’t knock at least $50 off your principal, the Department adds a matching payment of up to $50.
- It’s long. Any balance left after 360 qualifying payments, which is 30 years, can be forgiven.
That last one has a catch. StudentAid.gov says IDR discharges where the last payment lands on or after Jan. 1, 2026, are taxed as federal income. Thirty years is far off, but forgiveness may come with a tax bill.
Who can use it, and who can’t
This part depends on your loan type and when the money was first paid out. My brother had no idea what kind of loans he had. His StudentAid.gov dashboard told him in about a minute.
- Eligible: Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for grad or professional students, and Direct Consolidation Loans that don’t include a parent PLUS loan.
- Eligible only if consolidated: FFEL Program Stafford loans, FFEL grad PLUS, FFEL consolidation loans without a parent PLUS, and Federal Perkins Loans. They’d have to go into a Direct Consolidation Loan first.
- Never eligible: parent PLUS loans, including consolidation loans that paid one off, even a double consolidation.
If every one of your loans was disbursed on or after July 1, 2026, RAP is the only income-driven plan you can pick. Your only fixed option is the new Tiered Standard Plan, with a 10 to 25 year term based on your balance.
Older loans have more choices, and that’s where most of the confusion lives.
How the RAP payment is calculated
The bracket table below comes from the servicer pages on StudentAid.gov. It’s applied to your whole AGI, not just the slice inside the bracket.
- AGI up to $10,000: $120 a year, which is the $10 monthly minimum.
- $10,001 to $20,000: 1%. Each $10,000 band after that adds a point: 2%, 3%, 4%, and so on.
- $90,001 to $100,000: 9%.
- Over $100,000: 10%.
The math: AGI times your percentage, divided by 12, minus $50 per dependent. Minimum $10.
The Department’s own example uses a single borrower with no dependents earning $45,000 and owing $35,000. That’s the 4% band, so $1,800 a year, or $150 a month. The Department says the old IDR plans would have charged that person $176, and RAP also waives about $40 a month in interest and adds the $50 match.
Married and filing jointly? It uses your combined income, reduced if your spouse also has federal loans. File separately and only your income counts. It’s recalculated every year, so a raise or a new baby changes it.
What happens if you were on SAVE, IBR, PAYE or ICR
A court order ended the SAVE Plan in March 2026. If you were on it, you have to move, and the clock starts when your servicer contacts you, not when you get an email from Federal Student Aid.
- SAVE borrowers: servicers started sending notices July 1, 2026, in batches, and say every SAVE borrower will be notified before the end of 2026. You get 90 days from your notice. StudentAid.gov’s own example: a July 1 notice meant a Sept. 29 deadline.
- If you miss it: you get a final 30-day notice. After that you’re placed in the Standard Repayment Plan, or the Tiered Standard Plan if you have a loan from July 1, 2026, or later that’s in repayment. Either one may cost more per month than an income-driven plan.
- PAYE and ICR borrowers: both plans end no later than July 1, 2028. The Department says borrowers in phased-out plans with loans made before July 1, 2026, have until July 1, 2028, to choose RAP, Tiered Standard, or IBR.
- IBR borrowers: IBR stays available for loans disbursed before July 1, 2026. Nothing I read today says you have to leave it.
One hard truth for former SAVE folks: months in the SAVE forbearance don’t count toward IDR forgiveness or PSLF. Payments made before it still do.
If you work in public service, don’t let the deadline pass you by. RAP counts toward PSLF, and the Tiered Standard Plan doesn’t.
My brother’s notice came in August and he opened it in week four. Depending on when your notice went out, you may still have time, and some borrowers haven’t been notified yet. Open it tonight and check the date.
How to switch plans, step by step
We did his application in one sitting with takeout. The Department says about 10 minutes, which was close once he found his password.
- Find your deadline. Search your inbox for “You Have 90 Days to Select a New Repayment Plan” or check the inbox on your servicer’s website.
- Check your loans. Log in to StudentAid.gov and look at your loan types and disbursement dates on the dashboard.
- Run the Repayment Calculator. Log in first so it imports your loans. It shows your estimated payment on every plan you qualify for, side by side.
- Apply at StudentAid.gov/idr. Give consent for the IRS to share your tax info. It speeds things up and lets them recertify you automatically each year.
- Watch for your new bill. Your servicer has to tell you the new amount at least 21 days before the first due date.
- Turn on autopay. Borrowers enrolled by Dec. 31, 2026, get a 1% interest rate reduction through June 30, 2028.
And don’t pay anyone to do this for you. StudentAid.gov says help from your federal servicer is free.
How to budget the new payment
His calculator result was $217 a month: about $52,000 AGI, no dependents, the 5% band, $2,600 a year.
That $217 didn’t exist in his budget. For over two years his loan line had said $0, and that money had turned into restaurant money and a nicer phone plan. He didn’t do anything wrong. He stopped seeing a bill, so he stopped saving for one.
A payment you forgot about is still a payment. It just shows up meaner.
We found it in three pieces. He dropped a $38 streaming bundle he’d stopped watching, cut his takeout from about $260 a month to $160, and moved the rest out of what he’d been sending to savings until his next raise. It wasn’t glamorous, but it worked.
Then we did the thing I swear by: the payment gets pulled out of one specific paycheck the day it lands. He’s paid every other Friday, so $217 a month works out to about $100 a paycheck sitting in a separate account. I wrote the whole method for fitting a student loan payment into a tight budget, and it works the same way for RAP.
If the payment still won’t fit after you’ve cut what you can, that’s not a character flaw. My guide to paying off debt on a low income is for that month. StudentAid.gov also lists deferment or forbearance as short-term relief, though interest can keep adding up.
Cozy tip: Before you apply, write your estimated RAP number at the top of next month’s budget, above rent. Even if you only set aside $20 this week, give it a labeled envelope or sub-account. My free monthly budget printable has a fixed-payments row up top for exactly this, and starting small counts.
Repayment assistance plan payments by income and household size
I made this table for my brother, then kept going. Every row uses the formula from StudentAid.gov: AGI times the bracket rate, divided by 12, minus $50 per dependent, with a $10 floor. These are estimates for single filers, rounded to the dollar. Your real number comes from the Repayment Calculator.
| Household (example) | AGI | Bracket rate | Base per year | Dependent cut per month | Est. RAP payment per month | Set aside per biweekly paycheck |
|---|---|---|---|---|---|---|
| Part-time worker, no dependents | $9,000 | Flat $120 | $120 | $0 | $10 | $5 |
| Single, no dependents | $25,000 | 2% | $500 | $0 | $42 | $19 |
| Single parent, 1 child | $25,000 | 2% | $500 | -$50 | $10 (minimum) | $5 |
| Single, no dependents | $40,000 | 3% | $1,200 | $0 | $100 | $46 |
| Single, no dependents | $45,000 | 4% | $1,800 | $0 | $150 | $69 |
| Single parent, 2 kids | $45,000 | 4% | $1,800 | -$100 | $50 | $23 |
| My brother, no dependents | $52,000 | 5% | $2,600 | $0 | $217 | $100 |
| Single, 1 dependent | $62,000 | 6% | $3,720 | -$50 | $260 | $120 |
| Single, no dependents | $110,000 | 10% | $11,000 | $0 | $917 | $423 |
Look at the $40,000 row. Because the rate applies to your whole AGI, crossing a bracket line bumps the payment: on the table as written, $40,000 is $100 a month and $40,001 would be about $133. Near a line? Check the calculator before you assume anything.
The dependent cut is the other surprise. Two kids took $100 off the $45,000 payment, which is a third of it.
Repayment assistance plan mistakes I’d skip
- Letting the deadline pick for you. Auto-placement means a fixed plan that may cost more, and Tiered Standard doesn’t count toward PSLF. Choose on purpose.
- Budgeting the forbearance number. If your loans sat at $0 for a while, your budget probably absorbed that money. Find your RAP number first, then go hunting for it.
- Skipping IRS consent. Without it you’re uploading paperwork every year and risking a missed recertification, which can push your payment up.
My brother’s first RAP payment went out in October, on autopay, from the account where his $100 per paycheck lands. He texted me a screenshot. No caption. I knew what it meant.
If you’re figuring this out late, you have company. My roundup of budgeting statistics made me feel a lot less alone. There’s more in the debt payoff section when you’re ready.
Frequently Asked Questions
Who qualifies for the repayment assistance plan?
Borrowers with Direct Subsidized, Direct Unsubsidized, grad PLUS, and Direct Consolidation Loans that don’t include a parent PLUS loan. FFEL and Perkins loans can qualify after consolidating into a Direct Consolidation Loan. Parent PLUS loans never qualify, even consolidated. Check your loan types on your StudentAid.gov dashboard.
What is the minimum payment on RAP?
$10 a month. If your AGI is $10,000 or less, your base payment is $120 a year, which is $10 a month. The $50-per-dependent reduction can’t push you below that $10 floor either.
What happens if I don’t leave the SAVE Plan by my deadline?
After your 90 days, your servicer sends a final 30-day notice. If you still don’t choose, you’re enrolled in the Standard Repayment Plan, or the Tiered Standard Plan if you have a newer loan in repayment. Those payments may be higher than an income-driven plan, and Tiered Standard doesn’t count toward PSLF.
Does RAP count toward Public Service Loan Forgiveness?
Yes. StudentAid.gov lists RAP, along with IBR, ICR and PAYE, as plans that count toward PSLF if you meet the other requirements. Time spent in the SAVE forbearance doesn’t count, so switching sooner gets you to 120 qualifying payments faster.
Is RAP forgiveness taxable?
Under RAP, any balance left after 360 qualifying payments can be forgiven. StudentAid.gov says IDR discharges on or after Jan. 1, 2026, are taxed as federal income, and states vary. PSLF forgiveness isn’t federally taxed. Talk to a tax professional before your forgiveness date.
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