The income bands
RAP drops the discretionary-income arithmetic that every earlier income-driven plan used. Your rate depends only on which $10,000 band your AGI falls into.
| Adjusted gross income | Annual payment | Monthly on the top of the band |
|---|---|---|
| $10,000 or less | $120 flat | $10 |
| $10,001 to $20,000 | 1% of AGI | $16.67 |
| $20,001 to $30,000 | 2% of AGI | $50.00 |
| $30,001 to $40,000 | 3% of AGI | $100.00 |
| $40,001 to $50,000 | 4% of AGI | $166.67 |
| $50,001 to $60,000 | 5% of AGI | $250.00 |
| $60,001 to $70,000 | 6% of AGI | $350.00 |
| $70,001 to $80,000 | 7% of AGI | $466.67 |
| $80,001 to $90,000 | 8% of AGI | $600.00 |
| $90,001 to $100,000 | 9% of AGI | $750.00 |
| Over $100,000 | 10% of AGI | Rises with income |
Each dependent on your tax return takes $50 a month off the result, and no payment falls below $10.
Watch the band edges
The rate applies to your whole AGI rather than to the slice inside the band, so a small raise across a band edge costs more than the raise. Earn $60,000 and you pay 5%, which is $250 a month. Earn $60,500 and you pay 6% on the lot, which is $302.50. The extra $500 of income costs you $630 over the year.
A pre-tax 401(k) contribution or an HSA deposit pulls AGI back under the edge and cuts your payment for the whole year. The take-home pay calculator shows what a deferral does to your paycheck before you set the percentage.
Two features that make RAP unusual
Interest never capitalizes. When your on-time payment falls short of the month's interest, the Department waives the shortfall. Borrowers on the old plans watched balances climb for years while paying every month; that stops here.
Principal falls by at least $50 a month. If an on-time payment reduces principal by less than $50, the Secretary of Education tops the reduction up to $50. A borrower paying $10 a month on $120,000 at 7% still cuts $600 a year off the balance, and reaches forgiveness with $18,000 already repaid by the match.
What the longer term costs you
Forgiveness arrives after 360 payments. Old IBR forgave at 300, PAYE and SAVE at 240 for undergraduate-only debt. A borrower who would have cleared the balance in 20 years now pays for 30, and the extra decade of payments is the price of the lower monthly figure and the interest waiver. Public Service Loan Forgiveness still runs on 120 payments, and months paid under RAP count toward it, so public-sector borrowers lose nothing from the longer horizon.
RAP or the new IBR
RAP charges a share of gross AGI. IBR charges 10% of income above 150% of the federal poverty level, so it shelters a fixed slab of income and then takes a steeper cut of the rest. The crossover depends on family size.
- Low income, several dependents: RAP usually wins, because $50 per dependent beats the poverty-level shelter.
- Income near the poverty line: IBR usually wins, because the shelter removes most of your income from the calculation.
- High income: RAP's 10% ceiling applies to all AGI, so IBR's discretionary base often produces a smaller payment.
- Pursuing PSLF: both count, so pick the cheaper monthly payment and keep the difference.
Run your figures through both before you certify. The Department's own comparison tool on StudentAid.gov gives the binding numbers.
Frequently asked questions
When did RAP open?
July 1, 2026. Borrowers taking new loans from that date choose between RAP and a tiered standard plan.
Do I have to leave SAVE?
Yes. SAVE closed, and borrowers move to RAP, the new IBR or a standard plan. Your servicer will write to you with a deadline.
Does RAP cover Parent PLUS loans?
Parent PLUS borrowers face tighter rules under the new law. Check with your servicer, because consolidation timing changes what you qualify for.
Is forgiven debt taxable?
Federal law excludes discharged student debt from income through 2025 and the treatment after that depends on later legislation. Several states tax it regardless. Treat a 2056 forgiveness date as an open question.
What if my income drops?
You recertify annually, and you may ask for a recalculation when income changes. A lower AGI moves you to a lower band straight away.
Does marriage change my payment?
Filing jointly puts combined AGI into the calculation. Filing separately usually keeps your spouse's income out of it, at the cost of losing some credits and deductions.