How The Repayment Assistance Plan (RAP) Works: Payments, Eligibility, And Forgiveness

The number of federal student loan repayment plans is shrinking. Starting July 1, 2026, new Direct Loan borrowers will only have access to two plans: the Tiered Standard Plan and the Repayment Assistance Plan, known as RAP.

The Department of Education recently refreshed StudentAid for RAP, showing the repayment math, and how the plan's interest subsidy and matching principal benefit actually work.

Here's a clear look at how RAP calculates your payment, who can use it, and the details that catch borrowers off guard: especially married couples and anyone with Parent PLUS debt.

Who Is Eligible For RAP

If any federal student loan (including a Direct Consolidation Loan) is first disbursed on or after July 1, 2026, your only repayment options are RAP and the Tiered Standard Plan.

That applies to all of your Direct Loans, even ones first disbursed before July 1, 2026.

RAP is open to:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Grad PLUS Loans
• Direct Consolidation Loans that do not include a Parent PLUS loan

RAP is not available for:

• Parent PLUS Loans
• Direct Consolidation Loans that include a Parent PLUS loan
• Double-consolidation loans that include a consolidation loan containing a Parent PLUS loan

If you hold a mix of eligible and ineligible loans, the Parent PLUS-linked debt can be kept on the Tiered Standard Plan separately from your RAP-eligible loans.

FFEL, Perkins, and HEAL Program loans can't be repaid under RAP or the Tiered Standard Plan at all — those stay on their existing plans.

How Your Monthly Payment Is Calculated

Your RAP payment starts with your Adjusted Gross Income (AGI). The Department applies a percentage based on your AGI bracket, divides by 12 to get a monthly amount, then subtracts $50 for each dependent you claim on your tax return.

The minimum payment is $10 a month.

RAP payments are:

• AGI ≤ $10,000: Flat payment of $120/year ($10/month)
• $10,001–$20,000: 1% 
• $20,001–$30,000: 2% 
• $30,001–$40,000: 3% 
• $40,001–$50,000: 4%
• $50,001–$60,000: 5%
• $60,001–$70,000: 6% 
• $70,001–$80,000: 7%
• $80,001–$90,000: 8%
• $90,001–$100,000: 9%
• AGI > $100,000: 10% of AGI

A single borrower earning $55,000 with no dependents would pay about $229 per month ($55,000 × 5% ÷ 12). A borrower earning $75,000 with two dependents would pay roughly $337 per month ($75,000 × 7% ÷ 12 = $437.50, minus $100 for the two dependents).

You can run your exact numbers through The College Investor's RAP Calculator.

To enroll, go to StudentAid.gov, and you'll authorize the Department to pull your income and dependent data from the IRS, or you'll submit documentation yourself. Your payment re-certifies annually based on updated numbers.

Interest Subsidy And Matching Principal Payment

Two features give RAP an advantage over IBR for some borrowers.

Interest subsidy. If your full, on-time payment doesn't cover the interest that accrued since your last due date, the Department waives it. If you make every monthly payment on time, your balance should never exceed what you owed when you first entered RAP.

Matching principal payment. When your full, on-time payment reduces your principal by less than $50, the secretary of education adds a matching contribution to bring the principal reduction up to $50 (or the total you paid, if less than $50). Make a $10 required minimum payment, your principal reduces by $10. 

The catch: paying more than your required monthly payment can reduce or eliminate both benefits. Any amount above the bill goes to accrued interest first, then principal, which can reduce or eliminate the subsidy and matching payment for that month.

Bottom line: if you're on the RAP plan, it's likely not in your best interest to make additional payments. Use additional money to start investing. If you goal is loan repayment, consider a fully amortized repayment plan, like the standard plan.

Married Borrowers: How Spousal Income Works

Married borrowers need to pay attention to how filing status shapes the payment.

Joint filers, both spouses have federal student loans. The calculation uses combined AGI, but the payment is reduced to reflect the spouse's own federal loan balance. The monthly payment burden gets shared across both borrowers. For example, let's take a couple who make $120,000 combined with two kids. You both have equal loans of $30,000 each. Your combined monthly student loan payment would be $900 per month, or technically $450 each.

Joint filers, only one spouse has federal student loans. Combined AGI still drives the payment, and there's no spousal-loan reduction to soften it. This scenario tends to produce the highest RAP payment for a married borrower. So, in the situation above, $120,000 combined AGI with two kids, but the monthly payment is still $900 - for just the single borrower.

Separate filers. Only your income and the dependents you claim on your own return count. Filing separately can sharply lower a RAP payment when the non-borrower spouse earns more but it can also cost you at tax time by disqualifying you from credits and deductions (including the student loan interest deduction). Run both scenarios before choosing.

What To Know About Switching Plans

Existing borrowers with RAP-eligible loans can opt in once RAP goes live. Payments already made under IBR, PAYE, ICR, or SAVE generally count toward RAP's 360-payment discharge threshold, so borrowers don't start from scratch. 

However, given that RAP is a 30 year timeframe versus IBR at 20 or 25 years, it may make more sense to choose IBR moving forward. Here's the RAP vs. IBR decision tree to follow.

It's important to note: a borrower CAN switch from RAP to IBR (if they're an existing borrower with IBR access), but RAP months do not count toward IBR's 20- or 25-year forgiveness clock. 

PSLF, Loan Forgiveness, And Taxes

Payments under RAP generally count toward Public Service Loan Forgiveness (PSLF), provided they're made on time and in full. 

For RAP's own time-based loan forgiveness, any remaining balance is forgiven after 360 qualifying on-time, full payments over at least 30 calendar years.

However, you may owe federal and state income tax on the discharged amount. This is called the student loan tax bomb and you should plan accordingly. Check out The College Investor's Tax Bomb Calculator for estimates.

Frequently Asked Questions

Does interest capitalize if I leave RAP for another repayment plan?

The Department of Education has not yet published definitive guidance on capitalization treatment when a borrower leaves RAP. Under the 2023 capitalization rule, most plan-change capitalization events were eliminated for federal student loans, which suggests unpaid interest would remain as interest rather than being rolled into principal when switching plans. We'll update this answer once the Department confirms the rule for RAP specifically.

Do I need to consolidate my loans to enroll in RAP?

No. Direct Subsidized, Direct Unsubsidized, graduate PLUS Loans, and Direct Consolidation Loans that don't include Parent PLUS debt are all eligible for RAP on their own. Consolidation is not really necessary except as a pathway to get out of student loan default.

What happens to my interest subsidy during deferment or forbearance?

The interest subsidy only applies to months in which you receive a RAP bill and make a full, on-time payment. Interest that accrues during deferment, forbearance, or any period when your loan isn't in an active repayment status is not subsidized. Those months also don't count toward the 360-payment discharge threshold.

What happens if I miss a payment or pay less than the billed amount?

A missed or partial payment costs you the interest subsidy and matching principal benefit for that month. That month also doesn't count toward your 360-payment discharge threshold or toward PSLF. Standard delinquency and default rules still apply on top of those missed benefits.

Can I pay extra without losing the interest subsidy?

Be careful. Any amount you pay above the billed monthly payment gets applied first to accrued interest, then to principal and that can reduce or eliminate both the interest subsidy and the $50 matching principal payment for that month. 

Can I switch between RAP and the Tiered Standard Plan?

Yes. Borrowers with RAP-eligible loans can generally elect either plan and switch between them, though the Department of Education typically requires all of your Direct Loans to be on the same plan (with the Parent PLUS exception noted earlier). 

What if my income changes mid-year?

RAP payments are recalculated annually based on updated income and dependent information. If your income drops significantly mid-year (job loss, reduced hours, or similar) you can re-certify early so your payment adjusts without waiting for the next annual cycle. If your income rises, use that to your advantage as you won't see your payments rise until your next annual cycle. 

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