The Repayment Assistance Plan (RAP): What You'd Pay at Each Income, and Where the Payment Jumps

The Repayment Assistance Plan (RAP) started on July 1, 2026. Its payment is a percentage of your adjusted gross income (AGI), reduced for each dependent, and unlike Income-Based Repayment it is not based on the income left after a poverty-line allowance. That makes it simple to state and easy to misjudge, because the percentage applies to your whole income and steps up at every $10,000. This guide works through the table in the Department of Education's final rule, shows where the payment jumps, and compares RAP with the Tiered Standard plan, the other plan open to loans made on or after July 1, 2026. The figures come from the same engine as the RAP vs. IBR Calculator.

How the payment is worked out

Under 34 CFR 685.209 the borrower's base payment for the year is $120 if AGI is $10,000 or less, and above that a percentage of the whole AGI: 1% if AGI is more than $10,000 and not more than $20,000, 2% up to $30,000, and so on, one point for each further $10,000, to 9% up to $100,000 and 10% above $100,000. The monthly payment is the base payment divided by 12, less $50 for each dependent, and never less than $10. AGI is your own on your tax return; a married borrower filing jointly has the couple's combined AGI counted, and one filing separately only their own. A dependent is someone you claim on your federal return.

The top edge of each band belongs to the lower rate: an AGI of exactly $60,000 is in the 5% band, and $60,001 is in the 6% band.

The payment jumps at every $10,000

Because the rate applies to all of your income, crossing a band edge does not move only the dollars above it. At $60,000 the payment is $250.00 a month; at $60,001 it is $300.01, $50 more for one more dollar. The same happens at every $10,000 from $20,000 up to $100,000 (at $50,000 the rate goes from 4% to 5%, at $30,000 from 2% to 3%); above $100,000 the rate stays at 10%. Each jump is one percentage point of your income: $50 a month at $60,000, about $83 at $100,000, the last edge. For most people the AGI on the return is not something to adjust to hit a band, and the rule looks at the AGI on the tax return the servicer uses, not at what you earn during a month. It does mean that a small difference in AGI, such as a pre-tax retirement contribution or a deduction, can matter more here than in a bracket system where only the top dollars move.

What happens to the interest: the waiver and the $50 match

RAP has two features the older income-driven plans did not. If your payment does not cover the interest for the month, the unpaid interest is not charged to you, provided you paid on time (34 CFR 685.209(h)(4)). And when the payment reduces your principal by less than $50 in a month, the Department reduces it further by the lesser of $50 or your payment, minus whatever your payment already took off principal (685.209(o)(2)). Together they mean the balance never grows, and a payment of $50 or more takes principal down at least $50 a month.

Example: a $50,000 balance at 6.5% owes $271 of interest in the first month. At $30,000 of AGI the RAP payment is $50.00. That is less than the interest, so the interest is waived, and the $50.00 is matched to a $50.00 reduction in principal. After 360 payments you will have paid $18,000 in total, and the remaining $32,000 is forgiven. At $60,000 the payment is $250.00: still under the interest, so principal falls $50 a month again and the loan is not paid off in 30 years; $30,442 is forgiven after $90,000 of payments. At $80,000 the payment, $466.67, is larger than the interest, so the loan is repaid in about 13 years and nothing is forgiven.

RAP against the Tiered Standard plan

Loans made on or after July 1, 2026 can use only these two plans; Income-Based Repayment is not open to them. The Tiered Standard payment is fixed: 10 years for a balance under $25,000, 15 years from $25,000, 20 years from $50,000 and 25 years from $100,000 (685.208(c)). At 6.5%, the income at which RAP's monthly payment first reaches the Tiered Standard payment, for a single borrower with no dependents, is:

Below those incomes RAP's payment is smaller each month; above them the Tiered Standard payment is. Monthly payment is not the whole comparison, though. For the $50,000 loan:

What the table leaves out

• Forgiveness is taxable income. The federal exclusion for forgiven student debt covered discharges through 2025, so a balance forgiven under RAP in 2026 or later is generally federal taxable income in the year it is forgiven, at the end of 30 years. Public Service Loan Forgiveness is different.
• Parent PLUS loans are not eligible for RAP, nor are consolidation loans that repaid one; they can use the Tiered Standard plan.
• Income changes. The payment is redone each year from the latest return. Rising income raises the payment, and with it the chance that the loan is paid off before 30 years, as at $80,000 above.
• Older loans. Borrowers with loans made before July 1, 2026 may also have Income-Based Repayment and, until July 1, 2028, some other plans; the calculator compares RAP with IBR for them.

This guide explains the plan's arithmetic; it does not tell you which plan to pick, which depends on your income path, your goals and your other finances. Your servicer and studentaid.gov have your actual balance and options.