Payments, forgiveness, and who qualifies

Federal student loans make up the majority of outstanding education debt, and part of their appeal is that they’ve historically offered more repayment options and borrower protections than other loans. In fact, more than half of all federal student loan borrowers — about 55% — are enrolled in an alternative repayment plan.

But the U.S. Department of Education is phasing out most existing payment options, and as of July 1, 2026, the new Repayment Assistance Plan (RAP) will be the primary income-based repayment option going forward. The new plan changes how loan servicers calculate borrowers’ monthly payments and extends the repayment term for many borrowers.

Understanding how the new RAP plan works, who is eligible, and how to enroll will help you manage your federal student loan debt.

Who qualifies for RAP?

RAP will be available to most federal student loan borrowers starting on July 1, 2026. Eligible borrowers include those with:

The one major exception is borrowers with Parent PLUS Loans. Parent PLUS Loan borrowers who take out any federal loans on or after July 1, 2026, are not eligible for RAP. Their only repayment option is the new tiered standard repayment plan.

Parent PLUS Loan borrowers who had loans prior to July 1, 2026, can qualify for RAP and other repayment plans, but only if they consolidate their loans with a Direct Consolidation Loan prior to July 1.

The following loan types are not eligible for RAP in any circumstance:

IRS authorization requirements

Eligible federal loan borrowers can only qualify for the RAP if they authorize the U.S. Department of Education to obtain tax information from the IRS showing their income and the number of claimed dependents. The Department of Education will use that information to calculate your payments and will adjust them annually based on your tax return.

Related: What student loan repayment will look like after Trump’s budget bill

How RAP calculates your monthly payment

The RAP bases your monthly payment on a percentage of your adjusted gross income (AGI), divided by 12. Your payment is reduced by $50 for each dependent you claim on your federal tax return. But all borrowers, regardless of income or number of dependents, will pay at least $10 per month.

Here’s how payments work out, based on your AGI. This chart does not account for any dependents you claim.

Source: Federal Student Aid

For example, say your household income is $55,000, and you have one child. Under the RAP, you would pay 5% of your $55,000 income, or $2,750 annually. Divide that number by 12, and your monthly payment amount would be $229.17.

But because you have a child, your payment amount is reduced by $50, giving you a monthly payment of $179.17.

How does the RAP handle interest?

If you make your required payments on time and the payment amount is less than the interest that accrued over the last month, the RAP will waive any unpaid interest. Assuming you make all of your payments on time and never take periods of deferment or forbearance, your total loan balance will never exceed the balance you had when you first entered the RAP.

How does marital status affect RAP payments?

If you’re married and file a joint tax return, your RAP payments are based on your joint income. However, your payments are usually lower if your spouse also has federal student loans.

If you’re married and file your taxes separately, only your income and dependents are considered when calculating your payment amount.

Student loan forgiveness under RAP

There are two core ways to qualify for loan forgiveness with the RAP:

Payment term forgiveness

If you still have a balance on your loans after making payments under the RAP for 30 years, the remaining balance is forgiven.

Forgiveness through the RAP payment term is taxable as income.

Public Service Loan Forgiveness

At the end of April 2026, the U.S. Department of Education announced a final rule amending the provisions of the Working Families Tax Act and clarified that RAP borrowers will be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

The final rule confirmed that on-time payments made under the RAP will count toward the 120 required payments needed for PSLF. Forgiveness under PSLF is not taxable as income.

Related: Will I be taxed on student loan forgiveness?

Pros and cons of RAP

Pros

• Interest subsidy: The RAP offers an interest subsidy to cover any unpaid interest that your payment amount doesn’t cover, resulting in cost savings over time. While previous federal repayment plans offered something similar, only certain loans were eligible for a limited time.

• Simpler structure: Rather than having to decide between several income-driven plans, replacing the existing plans with the RAP simplifies repayment.

• Considers spousal debt: For those who are married filing jointly, the RAP considers your partner’s federal student loan debt when calculating your payments.

Cons

• Longer payment term: Previously, you could qualify for loan forgiveness under an income-driven repayment (IDR) plan in 20 or 25 years. With the RAP, you only qualify if you still have a balance after 30 years of payments.

• Payments may be higher: Under the new formula, you may find that your payment is much higher than it was under previous plans like Saving on a Valuable Education (SAVE).

• Requires a minimum payment: In previous income-based plans, low-income borrowers could qualify for $0 payments. But the RAP requires all borrowers, regardless of income, to pay at least $10 per month.

How to enroll in RAP

Enrollment for the RAP is not yet available. It is expected to be available on StudentAid.gov on July 1, 2026.

In the meantime, you can use the federal student loan payment simulator to view other payment options and see estimates of your payments under different payment plans.

Your repayment options — and whether you’re eligible for the new RAP — depend on your loan type and when you took out your debt. The chart below outlines what payment options you have for each loan type and disbursement date:

Repayment Plan Options Based on Federal Student Loan Disbursement Dates

*The U.S. Department of Education is phasing out the ICR and PAYE repayment plans by July 1, 2028. 
†To qualify for these plans, borrowers must consolidate their loans before July 1, 2026.