What Is a RAP Student Loan Repayment Plan?

Published August 12, 2026 Updated October 26, 2026 Loans Muhammad Rashid

Under the Repayment Assistance Plan, or RAP, your monthly federal student loan payment is a percentage of your adjusted gross income, from 1% to 10% depending on your income bracket, divided by 12, then reduced by $50 for each dependent, with a floor of $10 a month. A borrower with $55,000 of AGI pays 5%, which is $2,750 a year or $229.17 a month; with two dependents, that falls to $129.17. Any balance left after 360 qualifying payments, or 30 years, can be forgiven.

RAP is the income-driven plan created by the 2025 budget reconciliation law, and the Department of Education’s rules for it are in 34 CFR 685.209. Here is how the formula works, who can use it and what to watch for.

Who is eligible for the Repayment Assistance Plan?

RAP is available for Direct Loans, and the rules cover loans disbursed both before and after July 1, 2026. Borrowers with new loans made on or after that date generally choose between a standard plan and RAP, while existing borrowers can move to the new plan from older plans as those plans are phased out.

One group is left out entirely: Parent PLUS loans are never eligible for the plan. Parents need to look at the standard plan or other options that apply to their loans. Check Federal Student Aid’s FAQ on income-driven plans for the current options on your specific loan types, because transition rules differ by loan and disbursement date.

How is the monthly payment calculated?

The calculation has three steps:

Find your AGI on your most recent federal tax return.
Apply the percentage for your bracket and divide by 12.
Subtract $50 for each dependent; if the result is under $10, pay $10.

The bracket table rises by one percentage point for each $10,000 of income:

AGI up to $10,000: a flat $120 a year, which works out to $10 a month
$10,001 to $20,000: 1%
$20,001 to $30,000: 2%
$30,001 to $40,000: 3%
$40,001 to $50,000: 4%
$50,001 to $60,000: 5%
$60,001 to $70,000: 6%
$70,001 to $80,000: 7%
$80,001 to $90,000: 8%
$90,001 to $100,000: 9%
Over $100,000: 10%

Unlike earlier income-driven plans, this one does not subtract a poverty-line allowance before applying the percentage. The rate applies to your whole AGI, which is why the dependent reduction matters so much.

What do payments look like at different incomes?

Worked examples, all checked by hand:

AGI $25,000, single, no dependents: 2% × $25,000 = $500 a year, or $41.67 a month.
AGI $55,000, two dependents: 5% × $55,000 = $2,750, or $229.17 a month; minus $100 gives $129.17.
AGI $85,000, one dependent: 8% × $85,000 = $6,800, or $566.67 a month; minus $50 gives $516.67.
AGI $120,000, no dependents: 10% × $120,000 = $12,000, or $1,000 a month.
AGI $18,000, three dependents: 1% × $18,000 = $180, or $15 a month; minus $150 would be negative, so the $10 minimum applies.

Notice the jump at bracket edges: moving from $60,000 to $60,001 raises the rate from 5% to 6% of the entire AGI, about $50 more a month. If your income sits just above a threshold, contributions that lower AGI, such as traditional 401(k) deferrals, can have an outsized effect on your required payment.

How does forgiveness work under RAP?

After 360 qualifying monthly payments, which is 30 years, any remaining balance is eligible for forgiveness. That is longer than the 20 or 25 years used by some older income-driven plans, so for most borrowers RAP is primarily a payment-affordability tool rather than a fast route to forgiveness.

Plan for the tax side too. Loan servicer Edfinancial notes that the forgiven amount may be treated as taxable income, depending on the tax law in effect when forgiveness happens. Borrowers expecting a large forgiven balance decades from now should keep that in mind rather than assume it will be tax-free.

Is RAP better than a standard repayment plan?

It depends on your income relative to your debt. A borrower with $30,000 of debt and a $120,000 AGI pays $1,000 a month, which will usually clear the loan quickly; a standard plan may be cheaper per month. A borrower with $80,000 of debt and $40,000 of AGI pays 3% × $40,000 ÷ 12 = $100 a month, far below a standard payment, though interest builds over time.

Run both numbers. The RAP student loan calculator applies the bracket table and dependent reduction, and the student loan calculator shows the payoff timeline for a fixed payment.

How does RAP fit into a household budget?

Because the RAP payment is set from last year’s AGI, a raise this year will not change your payment until you recertify. Build the payment into your monthly plan with the budget calculator, and if you are deciding between paying extra on loans and saving, compare the after-tax picture using the income tax calculator.

What should you do before choosing RAP?

Confirm that each of your loans is a Direct Loan and not a Parent PLUS loan.
Pull your latest AGI from your tax return and find your bracket.
Count your dependents as they are listed on that return.
Compare the RAP payment with the standard plan for your balance.
Read your servicer’s notices about transition dates and recertification.

The RAP rules are new and still being implemented, so treat Federal Student Aid and your servicer as the final word on your account.

What happens if your income changes?

You recertify your income each year, and the new AGI sets the next year’s payment. If you lose your job or your income drops sharply, you do not have to wait for the annual date; you can ask your servicer to recalculate using current income documentation. Keeping your address and email current with the servicer matters, since missing a recertification notice can move you to a higher payment until the paperwork is processed.

Marriage can also change the result. How a spouse’s income counts depends on how you file your taxes, so married borrowers should check the current Federal Student Aid guidance and compare filing jointly with filing separately before tax season, not after.