Education Department Repayment Assistance Plan (RAP): 2026 Guide to Payments, Forgiveness, and Eligibility
The Education Department’s Repayment Assistance Plan (RAP) is a new income-driven repayment plan that became the primary option for federal student loan borrowers on July 1, 2026. Payments range from 1% to 10% of adjusted gross income, minus $50 per dependent**, with a **$10 minimum. Remaining balances are forgiven after 30 years of qualifying payments. Parent PLUS loans are largely excluded.
Quick Facts
Item
Information
Program
Repayment Assistance Plan (RAP)
Agency
U.S. Department of Education, Federal Student Aid
Eligibility
Direct Subsidized, Unsubsidized, Grad PLUS, and Direct Consolidation Loans; excludes Parent PLUS and FFEL loans
Income Limits
No income ceiling; payments scale from 1% to 10% of AGI
Monthly Benefit (Payment)
$10 minimum; 1%–10% of AGI divided by 12, minus $50 per dependent
Annual income recertification through IRS data authorization
Available States
All 50 states, D.C., and territories
Last Updated
July 1, 2026 (effective date)
What Is the Education Department Repayment Assistance Plan?
The Repayment Assistance Plan is a single, simplified income-driven repayment plan created by the Working Families Tax Cuts Act (Public Law 119-21), signed July 4, 2025, and implemented by the Education Department effective July 1, 2026. It replaces the “myriad” of prior income-driven repayment (IDR) options for new borrowers and is available as an option for many existing borrowers.
The plan’s stated goals are to:
Simplify repayment by collapsing multiple IDR formulas into one sliding-scale structure.
Prevent negative amortization through an interest waiver and a principal subsidy.
Extend the forgiveness timeline to 30 years, reducing the share of borrowers who receive outright forgiveness.
The Education Department estimated that borrowers with typical undergraduate debt of $25,000 to $50,000 will repay under RAP in about 12 years on average, compared with 15 years under Income-Based Repayment (IBR). Because balances decline faster, the department projected that only about 8% of borrowers with typical undergraduate debt will receive forgiveness under RAP, versus roughly a third under IBR.
Who Qualifies for RAP?
You qualify for RAP if you have eligible Direct Loans and you authorize the Education Department to access your IRS tax information. Eligibility depends on when your loans were first disbursed and what type of loans you have.
Who qualifies
Borrowers with Direct Subsidized Loans, Direct Unsubsidized Loans, Grad PLUS Loans, or Direct Consolidation Loans.
Borrowers whose loans were all disbursed before July 1, 2026: RAP is optional; you may switch to it or remain on an older plan you still qualify for.
Borrowers with at least one Direct Loan disbursed on or after July 1, 2026: RAP is the only income-driven plan available; you must repay all eligible Direct Loans under RAP or the Tiered Standard Plan, even loans disbursed before July 1, 2026.
Who does NOT qualify
Parent PLUS Loan borrowers are not eligible for RAP, and neither are borrowers with a Direct Consolidation Loan that included a Parent PLUS Loan (including “double consolidated” loans). Parent PLUS borrowers who took out loans on or after July 1, 2026, are limited to the Tiered Standard Plan. Some Parent PLUS borrowers with older loans could qualify only if they consolidated before July 1, 2026, under specific rules.
Federal Family Education Loan (FFEL) Program borrowers cannot request RAP for FFEL loans. They may need to consolidate into a Direct Consolidation Loan to access RAP, and consolidation itself can trigger the “new borrower” rules.
Perkins Loans and Health Education Assistance Loans are not eligible for RAP as standalone loans.
Common exceptions and edge cases
Existing borrowers who never take a new loan: may keep access to IBR, PAYE, and ICR in addition to RAP, depending on their loan history and plan eligibility.
Borrowers who consolidate after July 1, 2026: may be treated as new borrowers for repayment-plan purposes, losing access to legacy IDR plans for the entire consolidated balance.
Borrowers in default: RAP is a repayment plan, not a default-resolution program. Defaulted borrowers generally need to rehabilitate or consolidate first.
RAP Payment Formula and Income Brackets
RAP calculates your monthly payment as a percentage of your prior-year adjusted gross income (AGI), divided by 12, then reduced by $50 for each dependent you claim on your federal tax return. The minimum payment is $10.
Source: Federal Student Aid servicer guidance and state attorney general summaries.
Dependent deduction
Each dependent claimed on your federal tax return reduces your monthly payment by $50**, but the payment **cannot fall below $10. For a borrower with an AGI of $53,000 and one dependent, the calculation is: 5% of $53,000 = $2,650 per year ÷ 12 = $221 per month, minus $50 = **$171 per month** .
Interest waiver and principal subsidy
Two features distinguish RAP from older IDR plans:
Unpaid interest waiver: If your full on-time payment does not cover the interest that accrued that month, the remaining interest is waived and does not capitalize onto your balance.
**Principal subsidy of up to $50 per month:** If your on-time payment reduces principal by less than $50, the government applies a matching payment so that at least $50 goes toward principal that month.
These features are designed to ensure that balances decline every month for borrowers who pay on time, even when payments are small. However, the parameters are not indexed to inflation, meaning rising nominal incomes can push borrowers into higher brackets over time.
RAP vs. IBR vs. SAVE: Comparison Table
Feature
RAP
IBR (new borrower)
SAVE (ended March 2026)
Payment formula
1%–10% of AGI on sliding scale
10%–15% of discretionary income
5%–10% of discretionary income
Dependent deduction
$50/month per dependent
Based on poverty guidelines
Based on poverty guidelines
Minimum payment
$10
$0 possible
$0 possible
Interest waiver
Yes, unpaid interest waived if full payment made
Partial, depending on plan
Yes, unpaid interest waived
Principal subsidy
Up to $50/month
No
No
Forgiveness timeline
30 years (360 payments)
20–25 years
10–25 years, depending on balance
PSLF eligible?
Yes, on-time payments count
Yes
Yes (before court order ended plan)
Parent PLUS eligible?
No (with limited exceptions)
Yes, if consolidated
Yes, if consolidated
New borrowers after July 1, 2026
Only IDR option
Not available
Not available
Sources: Forbes, Yahoo Finance, and Brookings summaries of RAP and prior IDR plans.
PSLF and RAP: How They Interact
On-time RAP payments count toward Public Service Loan Forgiveness (PSLF), but only if you meet PSLF’s separate employment and payment requirements. The Education Department’s final regulations clarify that repaying under RAP qualifies for PSLF if all other eligibility criteria are met.
For borrowers who take out loans on or after July 1, 2026, RAP is the only income-driven plan that keeps the PSLF clock running. The Tiered Standard Plan does not count toward PSLF for new borrowers.
Important limits:
**$0 payments do not count toward PSLF under RAP.** The minimum RAP payment is $10, and PSLF requires an on-time, full payment.
RAP payments are not eligible for the PSLF Buyback program, which allows borrowers to “buy back” months that did not count because of certain deferments or forbearances.
PSLF remains a 120-payment (10-year) program, even though RAP forgiveness is 30 years. Public service borrowers still need 120 qualifying payments while working full-time for a qualifying employer.
Income Limits and Asset Limits
RAP has no income ceiling and no asset test. Unlike SSI or other need-based benefits, RAP does not disqualify borrowers for earning too much or for having savings. The “limit” is structural: at higher incomes, the payment percentage rises to a maximum of 10% of AGI.
What counts as income
RAP uses adjusted gross income (AGI) from your most recent federal tax return. AGI includes wages, self-employment income, and other taxable income, reduced by certain above-the-line deductions such as student loan interest and contributions to traditional retirement accounts.
What does not count
RAP does not use discretionary income, poverty guidelines, or a formula that subtracts a living allowance. This is a key difference from IBR and SAVE, which base payments on income above a poverty threshold. Because RAP applies a percentage to total AGI, some lower-income borrowers may pay more under RAP than they would have under SAVE or PAYE, even at the 1% or 2% bracket.
Asset limits
There are no asset limits for RAP. Savings, home equity, and retirement accounts do not affect your payment.
Household Requirements and Dependents
RAP does not use household size in the way older IDR plans did. Instead, it uses the number of dependents claimed on your federal tax return, and each dependent reduces the payment by a flat $50 per month.
This means:
A single borrower with no dependents receives no deduction.
A borrower with two dependents receives a $100 monthly reduction.
The deduction applies after the percentage-of-AGI calculation and is subject to the $10 floor.
The number of dependents is based on your federal tax return, not on household size for poverty-guideline purposes.
Spouses: RAP generally uses the borrower’s AGI. For married borrowers filing separately, the calculation may use the borrower’s individual AGI. Borrowers should confirm with their servicer how joint versus separate filing affects the calculation.
Citizenship and Immigration Rules
RAP eligibility is based on loan type and repayment status, not on citizenship or immigration status. Federal student loan borrowers, including eligible noncitizens who qualified for Direct Loans, can generally access RAP if their loans are eligible.
Key points:
No separate citizenship test applies to RAP beyond the eligibility rules that applied when the loan was originated.
IRS data authorization is required to calculate payments; borrowers must authorize the Education Department to obtain tax information from the IRS.
Undocumented borrowers generally do not qualify for federal student aid in the first place, so RAP is not typically available to them.
Legal immigrants with eligible Direct Loans are subject to the same RAP rules as citizens.
State Differences
RAP is a federal program with uniform payment formulas across all states. There are no state supplements or state-specific RAP benefit amounts.
However, state-level differences matter in three ways:
State tax treatment of forgiven debt. Forgiveness under RAP is generally taxable at the federal level for amounts forgiven in 2026 and later, and some states may also tax it. Borrowers should check their state’s treatment of student loan forgiveness.
State loan repayment assistance programs. Some states run separate repayment assistance programs for teachers, health professionals, or public servants. These are not RAP but may stack with federal benefits.
State attorney general guidance. Several states have published borrower-facing summaries of RAP and have taken legal positions on related federal rules, including PSLF litigation.
Required Documents
To apply for or enroll in RAP, you generally need your loan account information, IRS tax authorization, and identity verification through StudentAid.gov.
Common requirements:
FSA ID (your Federal Student Aid login).
IRS authorization for the Education Department to access your tax return data, including AGI and dependents.
Loan details from your servicer, including loan types and disbursement dates.
Contact and income information for verification.
Consolidation application if you need to consolidate FFEL or certain other loans to become RAP-eligible.
You do not need to submit paper tax returns directly to the servicer if you complete the IRS data authorization.
How to Apply
You can apply for RAP through StudentAid.gov or through your loan servicer’s portal.
The primary online application route is StudentAid.gov, which connects to your servicer and the IRS authorization system. The Education Department’s loan simulator allows you to compare RAP payments against other plans for which you remain eligible, such as IBR. Servicers including Nelnet, Edfinancial, and MOHELA also provide RAP information and application pathways through their portals.
Borrowers should be cautious of third-party “debt relief” companies that charge fees for RAP enrollment. RAP enrollment through StudentAid.gov and servicers is free.
Processing Time
RAP application processing times vary by servicer, but plan changes are generally faster than initial disability or benefit applications because they rely on tax data and loan records rather than medical evidence. Most servicers process complete repayment-plan applications within weeks, though backlogs can occur during peak transition periods.
For context, the July 1, 2026 rollout coincided with the end of the SAVE plan and the transition of millions of borrowers, which created elevated call volumes and processing delays at some servicers.
Payment Schedule and Frequency
RAP payments are monthly. After enrollment, your servicer will provide a payment schedule based on your calculated amount. Payments are due each month until the loan is repaid or forgiven after 30 years of qualifying payments.
Payment frequency: Monthly.
First payment: Generally the month after your plan is approved and your grace period or deferment ends.
Auto-pay: Optional, but enrolling by December 31, 2026, can qualify you for a temporary 1% interest rate reduction through June 30, 2028.
Missed payments: Only on-time payments count toward RAP forgiveness and PSLF. Late or partial payments can delay your progress and may affect the interest waiver and principal subsidy for that month.
Renewal Process
RAP requires annual income recertification, typically through IRS data authorization. If your income or number of dependents changes, your payment is recalculated.
Key renewal points:
Recertify annually using the IRS authorization process.
Report income changes if required by your servicer; failure to recertify can result in your payment being recalculated, potentially at a higher amount.
Dependents: The $50-per-dependent reduction is based on your tax return; if your dependent count changes, your payment should be updated at recertification.
No separate “renewal” application beyond the annual income certification.
Reasons Applications Are Denied
RAP enrollment can be denied or delayed for loan-type ineligibility, missing IRS authorization, default status, or servicer processing errors.
Common reasons:
Parent PLUS Loan or consolidation that included Parent PLUS: categorically ineligible except in limited pre-July 2026 consolidation scenarios.
FFEL or Perkins Loans not consolidated into a Direct Consolidation Loan.
Failure to authorize IRS data access.
Defaulted loans that have not been rehabilitated or consolidated.
Incomplete or inconsistent application information.
Servicer error or system transition issues during the 2026 rollout.
Appeals Process
RAP does not have a standalone “appeals” process like SSI or SSDI. Disputes are handled through the servicer’s reconsideration process and, if unresolved, through the Federal Student Aid Ombudsman Group.
Steps if your RAP application is denied or miscalculated
Contact your servicer and request a written explanation of the denial or calculation.
Request a plan recalculation if your AGI or dependent information is wrong.
File a complaint with the Federal Student Aid Feedback System or the Consumer Financial Protection Bureau (CFPB).
Contact the FSA Ombudsman Group for unresolved disputes.
For PSLF-related disputes, use the PSLF reconsideration process.
Common Mistakes
Assuming RAP is automatically better than IBR. For some borrowers, especially those with older loans and lower balances, IBR may still offer a shorter forgiveness timeline (20–25 years) and lower total cost.
Taking out a new loan or consolidating after July 1, 2026, without understanding the consequences. One new disbursement can make your entire loan balance subject to the new plan rules and eliminate access to legacy IDR plans.
Ignoring the Parent PLUS exclusion. Parent PLUS borrowers may need to consolidate before the deadline or accept the Tiered Standard Plan.
Missing payments. RAP’s interest waiver and principal subsidy require on-time full payments; one late payment can forfeit that month’s benefits.
Forgetting the tax consequences of forgiveness. Federal tax-free treatment of forgiven student loan debt expired at the end of 2025; forgiveness in 2026 and later is generally taxable.
Not recertifying income. Failure to recertify can result in a higher payment or loss of plan terms.
Paying for help. RAP enrollment is free through StudentAid.gov and servicers.
Recent Changes (2025–2026)
July 4, 2025: The Working Families Tax Cuts Act (Public Law 119-21) created RAP and directed the Education Department to implement it.
October 30, 2025: The Education Department published final PSLF regulations effective July 1, 2026, clarifying that RAP payments can qualify for PSLF.
January 30, 2026: Proposed rule implementing RAP and related loan changes published.
March 10, 2026: A court order ended the SAVE plan; borrowers were notified and given 90 days to choose a new plan.
May 1, 2026: Final regulations published for the Reimagining and Improving Student Education loan program, including RAP.
July 1, 2026: RAP and the Tiered Standard Plan became effective; new borrowers limited to these two options.
October 2026: The Trump administration dropped its appeal of a court loss that had blocked a separate PSLF employer-eligibility rule, preserving PSLF access for many public service employers.
Practical Examples: Who Might Benefit?
College student graduating in 2027 with $30,000 in Direct Loans and a $45,000 starting salary
RAP payment: 4% of $45,000 = $1,800 per year ÷ 12 = **$150 per month**, before dependents. With one dependent, $100 per month. Likely benefit: RAP is the only IDR option for new borrowers, but the principal subsidy and interest waiver can keep the balance declining even at $100–$150 per month. PSLF remains available if the borrower works for a qualifying employer.
Borrowed before July 1, 2026, with $60,000 in loans and $55,000 income
RAP payment: 5% of $55,000 = $2,750 ÷ 12 = $229 per month, before dependents. IBR comparison: IBR may offer a lower payment if the borrower has a large household or high discretionary income threshold, but RAP’s interest waiver and principal subsidy may reduce the total balance faster. The borrower should compare both plans using the Loan Simulator.
Parent PLUS borrower with a $40,000 balance
RAP eligibility:Not eligible for Parent PLUS loans, and not eligible for a consolidation that included Parent PLUS loans, unless the borrower consolidated before July 1, 2026, under the limited exception. Option: Tiered Standard Plan or, if consolidated before the deadline, potentially IBR or RAP under special rules.
Teacher with $25,000 in Direct Loans and $50,000 salary pursuing PSLF
RAP payment: 5% of $50,000 = $2,500 ÷ 12 = $208 per month, before dependents. PSLF: On-time RAP payments count toward the 120 payments needed for PSLF. After 10 years of qualifying public service employment, the remaining balance can be forgiven tax-free under PSLF rules (PSLF forgiveness is not subject to the 2026 taxability change for IDR forgiveness).
Borrowed $100,000 for graduate school, earns $80,000
RAP payment: 8% of $80,000 = $6,400 ÷ 12 = $533 per month, before dependents. Forgiveness: At this income and balance, the borrower may repay the loan in full before 30 years, meaning RAP forgiveness may never be used. The interest waiver and principal subsidy still provide protection if income drops.
RAP payment: 2% of $28,000 = $560 ÷ 12 = **$47 per month**, before dependents. **Principal subsidy:** If $47 does not reduce principal by $50, the government adds a subsidy to ensure at least $50 in principal reduction. This borrower may become debt-free faster under RAP than under older plans because of the principal subsidy.
Related Government Benefits
If you are managing student loan repayment alongside other financial pressures, these programs may also be relevant.
Public Service Loan Forgiveness (PSLF): forgives the remaining balance on Direct Loans after 120 qualifying payments while working full-time for a qualifying government or nonprofit employer. RAP payments count.
Teacher Loan Forgiveness: up to $17,500 for highly qualified teachers who teach five complete consecutive academic years at a low-income school or educational service agency.
Income-Based Repayment (IBR): a legacy IDR plan still available to many borrowers who do not take new loans after July 1, 2026; forgiveness after 20–25 years.
Tiered Standard Repayment Plan: the other new plan, with fixed terms of 10, 15, 20, or 25 years based on loan balance. Does not count toward PSLF for new borrowers.
Child Tax Credit: a tax credit for qualifying children.
State repayment assistance programs: some states offer loan repayment help for teachers, health professionals, and public servants. Check your state’s higher education agency.
Common Questions
1. Is the Repayment Assistance Plan the same as income-driven repayment?
Yes. RAP is a type of income-driven repayment plan. It replaces most older IDR plans for new borrowers and is optional for many existing borrowers. It uses a sliding-scale percentage of AGI rather than discretionary income.
2. Do I have to switch to RAP if I already have loans?
Not necessarily. If all your Direct Loans were disbursed before July 1, 2026, you may be able to stay on IBR, PAYE, or ICR, depending on your loan history and eligibility. If you take out a new loan or consolidate after July 1, 2026, you may be limited to RAP or the Tiered Standard Plan for your entire balance.
3. How is my RAP payment calculated?
Your payment is a percentage of your prior-year AGI, divided by 12, minus $50 per dependent, with a $10 minimum. The percentage rises from 1% to 10% in $10,000 AGI brackets.
4. Does RAP qualify for Public Service Loan Forgiveness?
Yes, on-time RAP payments count toward PSLF if you meet the employment and payment requirements. $0 payments do not count; the minimum RAP payment is $10.
5. What happens to my loans after 30 years on RAP?
Any remaining balance is forgiven after 360 qualifying monthly payments. The forgiven amount is generally taxable at the federal level for forgiveness occurring in 2026 or later, because the temporary federal tax-free treatment expired at the end of 2025.
6. Can Parent PLUS borrowers use RAP?
Generally no. Parent PLUS Loans and consolidation loans that included Parent PLUS Loans are excluded from RAP, with limited exceptions for borrowers who consolidated before July 1, 2026. Parent PLUS borrowers who take out new loans after that date are limited to the Tiered Standard Plan.
7. Does RAP have an income limit?
No. There is no income ceiling. Payments cap at 10% of AGI for incomes above $100,000. Higher earners pay more but are not disqualified.
8. Does RAP have an asset test?
No. Savings, home equity, and retirement accounts do not affect RAP eligibility or payment amount.
9. What is the principal subsidy under RAP?
If your on-time payment does not reduce your principal by at least $50, the government applies a subsidy so that at least $50 goes toward principal that month. This helps ensure balances decline even when payments are small.
10. What happens if I miss a payment on RAP?
Only on-time full payments count toward forgiveness and trigger the interest waiver and principal subsidy. A late or partial payment can forfeit that month’s benefits and delay your progress.
11. Can I switch from RAP to IBR later?
If you are an existing borrower who still has access to IBR, you may generally switch plans, but payments made under RAP may not transfer as qualifying payments toward IBR’s forgiveness timeline. RAP payments do not transfer to other IDR plans for forgiveness purposes.
12. Is RAP forgiveness taxable?
For forgiveness in 2026 and later, forgiven student loan debt is generally included in federal taxable income because the temporary exclusion expired. PSLF forgiveness remains tax-free. Borrowers should plan for a potential “tax bomb” if a large balance is forgiven under RAP.
Key Takeaways
RAP is the Education Department’s new income-driven repayment plan, effective July 1, 2026.
Payments are 1%–10% of AGI, minus $50 per dependent, with a $10 minimum.
Remaining balances are forgiven after 30 years (360 qualifying payments).
RAP has no income ceiling and no asset test.
Parent PLUS loans are largely excluded.
New borrowers after July 1, 2026, are limited to RAP or the Tiered Standard Plan.
RAP payments count toward PSLF if employment and payment requirements are met.
The interest waiver and $50 principal subsidy keep balances declining for on-time payers.
Forgiveness in 2026 and later is generally taxable at the federal level, unlike PSLF.
Use StudentAid.gov’s Loan Simulator to compare RAP against any legacy plan you may still qualify for.
Official Government Resources
Federal Student Aid (StudentAid.gov):StudentAid.gov — RAP information, Loan Simulator, PSLF Help Tool, and repayment plan applications.
U.S. Department of Education:ED.gov — final rules implementing RAP and related loan changes.
Federal Register:FederalRegister.gov — text of the May 1, 2026, final regulations.
Consumer Financial Protection Bureau (CFPB):consumerfinance.gov — student loan borrower complaints and guidance.
IRS:IRS.gov — tax treatment of forgiven student loan debt.
