Your federal student loan repayment plan likely shifted at some point this year. You might not have noticed yet. In 2026, the Department of Education finalized a rule retiring the SAVE plan. That rule rebuilds how borrowers repay federal loans. At the center is a brand-new option: the Repayment Assistance Plan, or RAP. Borrowers stuck on an old plan now face a firm deadline to switch.
Below, you’ll find how RAP works and how it compares to your current plan. You’ll also see how to plan your next move.
How the Repayment Assistance Plan Works
RAP gives federal borrowers a fresh income-driven repayment option.
How RAP Calculates Your Payment
Your bill lands somewhere between 1% and 10% of your income each month. Where you fall in that range depends entirely on your earnings. Each dependent you claim knocks $50 off your payment. Two borrowers with identical incomes won’t pay the same amount if one supports a family.
How RAP Protects Your Balance
Borrowers have complained for years about payments that barely dent their debt. Under older plans, a payment could cover interest alone, letting the balance climb even during active repayment. RAP changes that equation. Timely payments erase any interest you didn’t cover that month. A stalled payment can’t inflate your loan anymore. When your payment falls short of chipping away $50 in principal, the government covers that gap. The cap sits at $50 a month. From here, your balance has nowhere to go but down.
RAP also builds a forgiveness clock into the plan. Stay current for 360 payments, three decades, and the government wipes out whatever debt lingers.
A Real Payment Example
Consider a borrower who earns $45,000 and carries $35,000 in student debt. Their old income-driven plan demanded $176 a month, with real potential for that balance to grow. Move that same borrower to RAP, and the bill drops to $150 a month. The plan cancels their interest charge and chips into the principal on the government’s dime
Why This Happened Now
RAP fills a gap left by SAVE. That plan stalled in court for years after its 2023 rollout and never fully took effect. Congress built RAP into the 2025 reconciliation law. The Department spent this year converting that law into finalized rules. Most of it kicked in July 1, 2026, so current borrowers are already navigating the new system.
Two other changes came bundled into that same rule.
The Tiered Standard Plan Replaces the One-Size 10-Year Plan
Every borrower used to land on the same 10-year standard plan regardless of how much they owed. That default no longer applies.
Now your loan balance decides your term: 10, 15, 20, or 25 years. A $10,000 balance still clears in a decade. Six-figure debt earns a longer runway and a smaller monthly bill. Unlike RAP, this plan locks in a fixed payment instead of basing it on income. It works well for borrowers who can handle a set bill. They also want certainty about their payoff date.
Grad PLUS Loans Are Gone
Grad students used to borrow up to their full cost of attendance through Grad PLUS loans. No ceiling applied. The Department now caps graduate borrowing both annually and over the life of the loan. Schools can layer on their own, tighter limits for individual programs, based on what graduates in that field typically earn.
Anyone headed to grad school should plan around a lower federal borrowing limit than before. Private loans may need to fill whatever gap remains.
The Deadline You Need to Know
If You Borrowed After July 1, 2026
Borrow a new federal loan after that date, and RAP plus the Tiered Standard Plan were already on your menu. Neither came with a waiting period. You had both from your very first payment.
If You’re on an Older Plan
SAVE, PAYE, and ICR borrowers should expect their plans to disappear. You have a window through July 1, 2028, to pick RAP, Tiered Standard, or Income-Based Repayment. IBR is the one legacy income-driven plan still standing. Wait past that date, and your servicer decides for you. Choosing early beats leaving it to chance.
Rules around rehabilitation, deferment, and forbearance follow a slower timeline, arriving July 1, 2027.
Frequently Asked Questions
What Loans Qualify for the Repayment Assistance Plan?
Direct Subsidized, Direct Unsubsidized, Grad PLUS, and most Direct Consolidation loans qualify for RAP. Whether you can enroll depends on which loan type you hold.
Are Parent PLUS Loans Eligible for RAP?
They’re not. Parent PLUS loans technically count as Direct Loans, but the rule specifically excludes them from RAP. Even a consolidation loan carrying Parent PLUS debt doesn’t qualify either.
How Do I Apply for RAP?
Head to StudentAid.gov to start your application. You can let the IRS share your income and dependent details automatically, or upload your own paperwork instead. Most borrowers finish in roughly 10 minutes. Your servicer handles the rest and confirms your updated payment once the switch goes through.
Is RAP Better Than the Tiered Standard Plan?
That answer hinges on your income and priorities. Borrowers earning less relative to their debt, who want a balance that steadily shrinks, tend to do better on RAP. Those who can comfortably afford a set bill and want to be debt-free sooner often prefer the Tiered Standard Plan.
Does Switching to RAP Hurt My Credit Score?
Changing plans by itself won’t touch your score. Your servicer keeps reporting your payment activity to the credit bureaus no matter which plan you’re on. Pay on time under RAP, and your score benefits the same way it always has. Miss a payment, and it still counts against you.
Bottom line: don’t ignore that message from your loan servicer about repayment changes. The plan carrying your debt today might not exist by 2028. Choosing your new plan on your own timeline keeps you in control. You decide your monthly payment and your path toward forgiveness.
Photo by Jonathan Borba: Unsplash
