The Repayment Assistance Plan opened July 1, 2026, and by July 1, 2028 most borrowers in the older income-driven plans have to pick a new one. This guide compares the choices with real payments and shows where RAP helps and where it costs more.
The 2025 budget law (Public Law 119-21) created RAP and the Tiered Standard plan and phases out the older income-driven plans. The figures below follow the law as summarized by the Congressional Research Service (report IF13075, July 31, 2025) and the Department of Education’s fact sheet (reviewed June 11, 2026). For your own payment, payoff date and forgiveness estimate, use the RAP student loan calculator.
July 1, 2025: the “double consolidation” route for Parent PLUS loans closed. July 1, 2026: RAP and the Tiered Standard plan opened. Loans first disbursed on or after this date can be repaid only under those two plans, and a borrower with older loans who takes out a new loan loses the older income-driven options for all of their Direct Loans. The same date brought new borrowing limits: Grad PLUS ended for new borrowers, graduate students are capped at $20,500 a year and professional students at $50,000, and every student has a $257,500 lifetime limit (the federal student loan limit calculator applies them). July 1, 2028: borrowers in the plans being phased out must choose RAP, Tiered Standard or IBR.
| RAP | IBR | Tiered Standard | |
|---|---|---|---|
| Formula | 1%-10% of total AGI by $10,000 tier, minus $50 per dependent | 10% of AGI above 150% of the poverty guideline (15% for pre-2014 borrowers) | Fixed payment over 10-25 years by amount borrowed |
| Minimum payment | $10 | $0 | Amortizing |
| Unpaid interest | Waived on on-time payments | Subsidized loans: first 3 years covered; otherwise accrues | Not applicable |
| Principal help | Match brings principal reduction to $50 a month | None | None |
| Forgiveness | After 360 payments (30 years) | After 20 years (25 for pre-2014 borrowers) | None; paid off |
| Counts for PSLF | Yes | Yes | Check with your servicer |
| Who can use it | Direct Loans except Parent PLUS | Existing borrowers with loans before July 1, 2026 | Required option for new loans; anyone after July 1, 2026 |
Tiered Standard terms depend on how much you borrowed; the Department’s example is a $30,000 balance repaid over 15 years at $262 a month.
Monthly payments using 2026 HHS poverty guidelines for IBR (family size = borrower, spouse if joint, and dependents):
| Borrower | RAP | IBR (10%) | Lower |
|---|---|---|---|
| Single, $28,000 | $46.67 | $33.83 | IBR |
| Single, $45,000 | $150.00 | $175.50 | RAP |
| Parent of two, $60,000 | $150.00 | $158.50 | RAP |
| Single, $75,000 | $437.50 | $425.50 | IBR |
| Married, one child, $110,000 joint | $866.67 | $575.17 | IBR |
IBR is lower at the bottom, where its poverty-line allowance shelters most income, and again at higher incomes, where RAP’s rate reaches 7% to 10% of all AGI. RAP is lower in a middle band, here a single borrower at $45,000 and a parent of two at $60,000. The crossover points move with family size and the tier edges, so check your own numbers. A lower payment is not the only test: RAP waives unpaid interest and adds the principal match, so a RAP balance does not grow, while IBR forgives sooner. Borrowers who expect to pay in full anyway should look at total cost, not the monthly figure.
RAP applies the tier rate to all household AGI when a couple files jointly, and the rate rises with income. Two borrowers earning $50,000 each are in the 4% tier on their own and pay 4% of $50,000 apiece if they file separately: $166.67 each, $333.33 together. Filing jointly, their $100,000 of AGI falls in the 9% tier: $750.00 a month for the household, split by each spouse’s share of the debt. That is $416.67 more a month. A child brings the joint figure down by $50, to $700.00. Filing separately can cost more in income tax (it rules out the student loan interest deduction and several credits), so compare the tax cost with the payment saving before choosing.
RAP discharges whatever is left after 360 qualifying payments. Because the federal exclusion for income-driven forgiveness expired after 2025, a balance forgiven under RAP is generally taxable income in the year of discharge. Public Service Loan Forgiveness after 120 qualifying payments remains tax-free, and RAP payments count toward it. A borrower in public service who expects PSLF mostly cares about keeping payments low; a borrower who expects 30-year forgiveness should plan for the tax.
New loan after July 1, 2026? Your choice is RAP or Tiered Standard. Pick RAP if your payment under it is lower than Tiered Standard and you value the interest waiver; pick Tiered Standard if you want a fixed end date and can afford it. Older loans, currently in a plan being phased out? Compare RAP and IBR with your actual AGI and family size before July 1, 2028; IBR tends to win at low and higher incomes, RAP in the middle, and the interest waiver favors RAP when the payment would not cover interest. Working toward PSLF? Choose the plan with the lowest qualifying payment. Married, both with loans? Run joint and separate numbers. Parent PLUS borrower? RAP is not available; check IBR eligibility and the deadlines with your servicer.
Letting income certification lapse, which can raise the payment; paying late, which forfeits that month’s interest waiver and match; assuming a pre-tax 401(k) contribution does not matter (it lowers AGI and can drop you a tier); and forgetting that a single new loan after July 1, 2026 ends access to the older income-driven plans for your existing Direct Loans.
Congressional Research Service, The Repayment Assistance Plan (RAP) in P.L. 119-21, IF13075 (July 31, 2025). U.S. Department of Education, fact sheet on simplifying student loan repayment (reviewed June 11, 2026). HHS ASPE, 2026 Poverty Guidelines (January 15, 2026). Electronic Code of Federal Regulations, 34 CFR 685.209 (accessed October 2026).
July 1, 2026. Loans made on or after that date can be repaid only under RAP or the Tiered Standard plan.
July 1, 2028. Borrowers in the plans being phased out must choose RAP, Tiered Standard or IBR by then.
Often. RAP applies one rate to combined AGI, and the rate rises with income, so two incomes can move a couple into a higher tier.
Generally yes under current law, because the temporary exclusion ended after 2025. PSLF forgiveness is not taxable.
No. Parent PLUS loans and consolidation loans that include one are not eligible.
$10 a month, which applies when AGI is $10,000 or less or when dependent reductions bring the payment below $10.