Archive · 21 Aug 2025
New Student Loan Repayment Plan: How It Will Work
The government is changing how people pay back their student loans with a new plan called RAP.
Instead of looking at how much money someone has, RAP uses a person's adjusted gross income to figure out payments.
Payments will be a percentage of the income with the lowest payment being $10 a month.
There are some differences: RAP won't give you $0 monthly payments if you lose your job, it only considers dependent children, and it takes 30 years for the loans to be forgiven.
The new plan starts in 2026, but people already paying back loans have a little more time to decide if they want it or not.
The Repayment Assistance Plan (RAP) is a new student loan repayment plan replacing existing income-driven plans.
RAP calculates payments based on adjusted gross income (AGI), not shielding a portion of income.
Borrowers will pay a percentage of their AGI, with a minimum monthly payment of $10.
RAP has a flat 30-year loan forgiveness timeline and removes long deferment windows.
RAP is expected to be available by July 1, 2026; existing borrowers can choose to avoid RAP if they sign up for IBR before July 1, 2028.
- Who
- Student loan borrowers affected by the second Trump administration.
- What
- The new Repayment Assistance Plan (RAP) for student loans.
- When
- Expected to be available by July 1, 2026, with existing borrowers automatically enrolled by July 1, 2028 if they don't choose IBR.
- Where
- N/A
- Why
- To streamline income-driven repayment plans and modify monthly payments based on income.
Potential Benefits for Borrowers
Potential Drawbacks for Borrowers
Impact on Monthly Payments and Total Cost
Potential Benefits for Borrowers
Some borrowers may have lower monthly bills compared to existing income-driven repayment plans.
Potential Drawbacks for Borrowers
Borrowers may see a longer repayment term and pay more overall.
- Plan Name
- Repayment Assistance Plan (RAP)
- Payment Calculation
- Based on adjusted gross income (AGI)
- Minimum Payment
- $10 per month
- AGI Percentage for $10,001–$20,000 Income
- 1%
- Maximum AGI Percentage
- 10% (for income over $100,000)
- Dependents Deduction
- $50 per dependent
- Loan Forgiveness Timeline
- 30 years