The new Payment Assistance Plan (RAP) explained: Payments, forgiveness and who qualifies

Federal student loans make up the majority of outstanding educational debt, and part of their appeal is that they have historically offered more repayment options and borrower protection than other loans. In fact, more than half of all federal student loan borrowers (about 55%) are enrolled in an alternative repayment plan.

But the U.S. Department of Education is phasing out most existing payment options, and starting July 1, 2026, the new Payment Assistance Plan (RAP) will be the primary income-based payment option going forward. The new plan changes the way loan servicers calculate borrowers’ monthly payments and extends the repayment term for many borrowers.

Understanding how the new RAP plan works, who is eligible, and how to enroll will help you manage your federal student loan debt.

Who qualifies for RAP?

RAP will be available to most federal student loan borrowers starting July 1, 2026. Eligible borrowers include those with:

The only major exception is borrowers with Parent PLUS loans. Parent PLUS loan borrowers who take out federal loans on or after July 1, 2026 are not eligible for RAP. Your only payment option is the new standard tiered payment plan.

Parent PLUS loan borrowers who had loans before July 1, 2026 may qualify for RAP and other repayment plans, but only if they consolidate their loans with a Direct Consolidation Loan before July 1.

The following types of loans are not eligible for RAP under any circumstances:

IRS Authorization Requirements

Eligible federal loan borrowers can only qualify for RAP if they authorize the U.S. Department of Education to obtain tax information from the IRS showing their income and the number of claimed dependents. The Department of Education will use that information to calculate your payments and adjust them annually based on your tax return.

Related: What student loan repayment will look like after Trump’s budget bill

How RAP calculates your monthly payment

The RAP bases your monthly payment on a percentage of your adjusted gross income (AGI), divided by 12. Your payment is reduced by $50 for each dependent you claim on your federal tax return. But all borrowers, regardless of income or number of dependents, will pay at least $10 a month.

Here’s how payments are calculated, based on your AGI. This chart does not take into account any dependents you claim.

Fountain: Federal Student Aid

For example, let’s say your household income is $55,000 and you have one child. Under the RAP, you would pay 5% of your income of $55,000, or $2,750 a year. Divide that number by 12 and your monthly payment amount would be $229.17.

But because you have a child, your payment amount is reduced by $50, giving you a monthly payment of $179.17.

How does the RAP handle interest?

If you make the required payments on time and the payment amount is less than the interest accrued over the last month, RAP will waive any unpaid interest. Assuming you make all your payments on time and never take deferment or forbearance periods, your total loan balance will never exceed the balance you had when you first entered RAP.

How does marital status affect RAP payments?

If you are married and file a joint tax return, your RAP payments are based on your joint income. However, your payments are typically lower if your spouse also has federal student loans.

If you are married and file your taxes separately, only your income and dependents are considered when calculating your payment amount.

RAP Student Loan Forgiveness

There are two main ways to qualify for loan forgiveness with the RAP:

Waiver of payment terms

If you still have a balance on your loans after making RAP payments for 30 years, the remaining balance is forgiven.

Forgiveness through the RAP payment term is taxable as income.

Public Service Loan Forgiveness

In late April 2026, the U.S. Department of Education announced a final rule amending provisions of the Working Families Tax Act and clarified that RAP borrowers will be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

The final rule confirmed that timely payments made under the RAP will count toward the 120 payments required by PSLF. Forgiveness under PSLF is not taxable as income.

Related: Will I have to pay taxes on student loan forgiveness?

Pros and cons of RAP

Advantages

• Interest subsidy: The RAP offers an interest subsidy to cover any unpaid interest that your payment amount does not cover, resulting in cost savings over time. While previous federal repayment plans offered something similar, only certain loans were eligible for a limited time.

• Simplest structure: Instead of having to decide between several plans based on income, replacing existing plans with the RAP simplifies payment.

• Consider marital debt: For those who are married and file jointly, the RAP considers your partner’s federal student loan debt when calculating your payments.

Cons

• Longest payment term: Previously, you could qualify for loan forgiveness under an income-driven repayment (IDR) plan in 20 or 25 years. With RAP, you only qualify if you still have a balance after 30 years of payments.

• Payments may be higher: Under the new formula, your payment may be much higher than in previous plans like Saving on a Valuable Education (SAVE).

• Requires a minimum payment: In previous income-based plans, low-income borrowers could qualify for $0 payments. But RAP requires all borrowers, regardless of income, to pay at least $10 a month.

How to sign up for RAP

RAP registration is not yet available. It is expected to be available on StudentAid.gov on July 1, 2026.

In the meantime, you can use the federal student loan repayment simulator to see other repayment options and estimates of your payments under different repayment plans.

Your repayment options (and whether you’re eligible for the new RAP) depend on your loan type and when you incurred your debt. The following table describes the payment options you have for each type of loan and disbursement date:

Payment plan options based on federal student loan disbursement dates

*The US Department of Education will phase out ICR and PAYE payment plans by July 1, 2028.
†To qualify for these plans, borrowers must consolidate their loans by July 1, 2026.