Federal student loan borrower reviewing Repayment Assistance Plan details on a government website

By Dom Shipley — Reviewed by Marcus Whitfield 21 May 2026 5 min read

The Repayment Assistance Plan (RAP): What Borrowers Need to Know for July 2026

FEDERAL OPTIONS · RAP EXPLAINER

By Student Relief Solutions Editorial — Reviewed by Marcus Whitfield

The Repayment Assistance Plan (RAP) launches July 1, 2026 as a new federal repayment option. Here is what it actually does, how the payment formula works, how it compares to IBR, and who should consider enrolling.

The short version

RAP is not a replacement for SAVE. It does not mimic SAVE's payment structure. It is a different plan with a different formula — tiered percentages of AGI (1% to 10%) across 11 income brackets rather than a percentage of discretionary income. RAP does not allow $0 monthly payments. Every enrollee pays something. For some borrowers, IBR will still produce a lower monthly payment than RAP. For others, RAP's AGI-based formula may be more favorable. The two plans need to be compared side by side using your actual numbers before you enroll in either.

Why RAP exists

The One Big Beautiful Bill Act of 2025, signed July 4, 2025, eliminated SAVE and several other IDR plans while creating RAP as the new federal IDR framework. RAP was finalized in the Federal Register in May 2026 and is scheduled to open for enrollment July 1, 2026.

The political context: the legislation that created RAP significantly restructured the federal IDR landscape as part of a broader federal budget reconciliation package. The SAVE plan had been created through regulatory action rather than legislation; Congress used this reconciliation bill to codify a new plan that it could explicitly authorize. Whether this represents a better or worse deal for borrowers depends entirely on your income and balance profile.

How RAP calculates your payment

RAP uses Adjusted Gross Income (AGI) rather than "discretionary income" (the SAVE/IBR formula). This is a meaningful difference.

Under IBR, discretionary income = your income minus 150% of the federal poverty guideline for your family size. So a single borrower earning $40,000 would have discretionary income of $40,000 minus $22,590 (150% of the 2026 poverty line for family of 1) = $17,410. Their IBR payment would be 10% of $17,410 divided by 12 = approximately $145/month.

Under RAP, the payment is calculated as a percentage of your full AGI. Per the May 2026 Federal Register final regulations, RAP uses 11 income tiers with percentages ranging from 1% to 10% of annual AGI. The final tier breakpoints and percentages by income level will be confirmed in the enrollment guide at studentaid.gov before July 1, 2026.

What this means in practice: For very low-income borrowers, IBR's formula (10% of income above 150% of poverty) may produce a lower payment than RAP's 1% of full AGI — because IBR exempts the first $22,590 (for a single borrower) from the calculation, while RAP applies a percentage to all income from dollar one. For higher-income borrowers, RAP's capped percentage tiers may produce payments that are comparable to or lower than IBR. You must run your specific numbers before choosing.

No $0 payments

A deliberate structural difference: SAVE and IBR both allowed $0 monthly payments for borrowers whose calculated payment fell below a minimum threshold. RAP does not. Every RAP enrollee pays at least 1% of AGI annually, divided into monthly payments. For a borrower with $20,000 AGI, that is $200/year or approximately $17/month minimum.

Forgiveness under RAP

RAP includes a forgiveness track. The exact forgiveness timeline and whether forgiven debt is taxable were still being finalized as of the May 2026 Federal Register publication. The legislation creating RAP also amended the forgiveness framework, and implementing guidance was pending from the Department of Education. Verify the current forgiveness terms at studentaid.gov before enrolling, particularly if forgiveness is part of your long-term plan.

PSLF eligibility: Payments under RAP are expected to qualify for Public Service Loan Forgiveness, consistent with other qualifying IDR plans. Confirm this at studentaid.gov before enrolling if PSLF is part of your strategy.

Who RAP is designed for

RAP is explicitly designed as the primary IDR plan for borrowers who take out new federal loans on or after July 1, 2026. New borrowers will default to RAP in the same way borrowers previously defaulted to SAVE. For existing borrowers, RAP will be an available option that you can switch into, though the transition mechanics and any grace periods are subject to implementation guidance.

RAP vs IBR: which is better for you?

There is no universal answer. Here is the framework:

Factor	IBR may win	RAP may win
Very low income	IBR's poverty-line exemption may produce a lower payment	RAP minimum is 1% of AGI regardless
Moderate to high income	IBR payment at 10% of income above poverty could be significant	RAP's tiered percentage cap may limit payments more
$0 payment need	IBR allows $0 if income is low enough	RAP does not allow $0
PSLF track	Both are expected to qualify — confirm at studentaid.gov	Both are expected to qualify — confirm at studentaid.gov
Established rules	IBR rules are settled and well-documented	RAP implementation guidance still being finalized

Run your numbers at studentaid.gov/loan-simulator. The Loan Simulator is expected to include RAP as an option once it launches July 1, 2026.

What happened to SAVE borrowers

Borrowers who were enrolled in SAVE when it was struck down in 2025 were placed in administrative forbearance. That forbearance is not a repayment plan. Months in SAVE forbearance do not count toward IDR forgiveness or PSLF without specific servicer confirmation that they have been credited (this has been subject to ongoing policy disputes).

If you were in SAVE administrative forbearance, you have two options currently: enroll in IBR, or wait for RAP enrollment to open on July 1, 2026 and compare both plans before choosing. Do not remain in administrative forbearance by default if you are pursuing PSLF or IDR forgiveness — confirm your current status with your servicer.

Common mistakes to avoid

Treating RAP as a SAVE replacement with the same payment formula. It is not. The payment formula is structurally different. Do not assume RAP will give you a lower payment than SAVE did without running the numbers.
Enrolling in RAP without comparing to IBR. Use the Loan Simulator. For some borrower profiles, IBR produces a meaningfully lower payment.
Relying on forgiveness projections under RAP before the forgiveness terms are finalized. Wait for confirmed guidance from ED.gov before building a long-term financial plan around RAP forgiveness.
Assuming PSLF eligibility under RAP without confirmation. Verify at studentaid.gov before counting RAP months toward your PSLF 120-payment track.

How to enroll when RAP opens

RAP enrollment is expected to open at studentaid.gov/idr on July 1, 2026. You will need your FSA ID and income documentation (most recent federal tax return or alternative income documentation if your income has changed significantly since your last filing). Processing time is typically 2 to 6 weeks with most servicers.

If you want to lock in IBR now rather than waiting for RAP, you can enroll in IBR immediately through studentaid.gov and then evaluate RAP after July 1, 2026. Switching between IDR plans is allowed, though each switch resets nothing on your forgiveness clock — qualifying months count regardless of which IDR plan you were on when you made them (for both IBR and PSLF purposes, subject to plan eligibility).

Related guides

This article was generated by AI under editorial supervision. All program rules and figures are sourced from primary government documents (studentaid.gov, CFPB, ED.gov). This is information, not financial advice — talk to a fiduciary or your servicer about your specific situation.