RAP Plan FAQ & Guide
What is the OBBBA 2026?
The One Big Beautiful Bill Act (OBBBA) introduces the Repayment Assistance Plan (RAP), effective July 1, 2026. RAP uses a simple "1% step rule": your repayment rate increases by 1% for every $10,000 of income, capped at 10%. The rate applies to your full AGI, making it easy to estimate: Rate = min(10, floor(AGI / $10k) + 1)%.
How do dependents & the $10 minimum work?
If your AGI is below $10,000, you pay a flat $10/month minimum to keep your account active for forgiveness timelines. Each dependent you claim reduces your monthly payment by $50, but the floor is always $10/month — your payment can never drop below that.
Will my interest be subsidized?
Yes, similar to the previous SAVE plan, if your calculated RAP payment does not cover the monthly interest accrual, the remaining interest will be covered by the government. This prevents "negative amortization," ensuring your balance does not grow as long as you make your required payments.
RAP vs SAVE Plan — what changed?
The SAVE plan used 225% of the Federal Poverty Level (FPL) as a protected income floor, then charged 5% of income above that threshold. RAP replaces this with a simpler "1% step rule" — your rate rises by 1% for each $10,000 of AGI, starting at 1% and capping at 10%. RAP also introduces a per-dependent $50/month credit, which SAVE did not offer. The net effect: lower earners generally pay less, while higher earners may pay more.
When does the RAP plan take effect?
RAP officially replaces the SAVE plan on July 1, 2026. Borrowers currently enrolled in SAVE will be automatically transitioned. New borrowers entering repayment after that date will be placed into RAP by default if they choose an income-driven option. The Department of Education is expected to publish final implementation rules by spring 2026.
How is my RAP payment calculated step by step?
Step 1: Take your Adjusted Gross Income (AGI) from your most recent tax return. Step 2: Determine your rate using the formula: Rate = min(10, floor(AGI / $10,000) + 1)%. For example, $45,000 AGI → floor(45000/10000) + 1 = 5, so 5%. Step 3: Multiply AGI by the rate and divide by 12 for your monthly payment: $45,000 × 5% / 12 = $187.50. Step 4: Subtract $50 for each dependent. If you have 2 dependents: $187.50 − $100 = $87.50. The minimum payment is always $10/month.
Does RAP offer student loan forgiveness?
Yes. Like previous income-driven repayment (IDR) plans, RAP includes a forgiveness timeline. Borrowers with an original principal balance of $12,000 or less may receive forgiveness after 10 years of qualifying payments. For every additional $1,000 borrowed above $12,000, one extra year is added, up to a maximum of 20 years for undergraduate loans and 25 years for graduate loans. Payments made under SAVE, IBR, ICR, or PAYE count toward RAP forgiveness.
Does RAP apply to Parent PLUS loans?
Parent PLUS loans are not directly eligible for RAP. However, if a parent borrower consolidates their Parent PLUS loans into a Federal Direct Consolidation Loan, that consolidation loan becomes eligible for RAP. Keep in mind that consolidation restarts the forgiveness clock, so any prior qualifying payments will not carry over. Borrowers should weigh the trade-off carefully before consolidating.
What happens if my income changes mid-year?
RAP payments are recalculated annually based on your most recent tax return. If your income drops significantly mid-year (e.g., job loss or reduced hours), you can submit an alternative documentation of income to your servicer for an immediate recalculation. If your income rises, your payment won't increase until the next annual recertification. Missing the recertification deadline may result in being placed on the standard repayment plan temporarily.
What counts as AGI for RAP purposes?
AGI (Adjusted Gross Income) is the figure on Line 11 of your IRS Form 1040. It includes wages, salaries, tips, business income, investment income, and other taxable income — minus "above the line" deductions like student loan interest, IRA contributions, and educator expenses. It does not include non-taxable income such as child support received, gifts, or Roth IRA withdrawals. If you filed jointly, your combined household AGI is used.
Can married couples file separately to lower RAP payments?
Yes, married borrowers may file taxes separately (MFS) to exclude their spouse's income from the AGI used for RAP calculation. This can significantly lower your payment if your spouse earns substantially more. However, filing separately means losing access to certain tax benefits (education credits, student loan interest deduction, etc.), so you should compare the total financial impact. The filing toggle in our calculator lets you model both scenarios.
| AGI Range | Rate (1% Step Rule) | Example Monthly |
|---|---|---|
| < $10k | $10 flat minimum | $10.00 |
| $10k – $19k | 2% | $16.67 – $31.67 |
| $20k – $29k | 3% | $50.00 – $72.50 |
| $50k – $59k | 6% | $250.00 – $295.00 |
| $100k+ | 10% (cap) | $833.33+ |
Dependent credit: −$50/mo per dependent (min $10/mo). Examples shown without dependents.