A single borrower with $45,000 of adjusted gross income (AGI) and no dependents pays $150 a month under the Repayment Assistance Plan (RAP). The rule for that income band is 4% of AGI: 4% of $45,000 is $1,800 a year, and $1,800 divided by 12 is $150. If the same borrower claims two dependents on their tax return, the payment falls by $50 for each one, to $50 a month.
That is the core of the payment formula: a percentage of AGI that steps up with income, divided by 12, minus $50 per dependent, and not less than $10 a month except for a loan's final payment. A married couple who both have loans and whose joint income is used then split the result, as shown below. The rules come from the Department of Education's final regulations, published in the Federal Register on May 1, 2026 and effective July 1, 2026, which put the Repayment Assistance Plan created by Public Law 119-21 into 34 CFR 685.209. For Direct Loans made on or after July 1, 2026, RAP is the only income-driven option: the regulation says only Direct Loans made before that date may be repaid under PAYE, IBR or ICR, and it closes REPAYE to anyone who has received such a loan.
The formula is short, but two details change what borrowers actually pay and owe. The percentage applies to all of your AGI, not just the part above a threshold, so crossing a band edge by one dollar raises the payment for the whole year. And the plan does not charge unpaid interest and adds up to $50 a month of principal reduction for on-time payments, so an on-time borrower in repayment does not see the balance grow. Both are worked below. The rule text was checked against the Federal Register and the current eCFR text of 34 CFR 685.209 on October 28, 2026.
The base-payment table
The regulation calls the yearly amount the "base payment". It depends only on AGI, and the bands are $10,000 wide:
| Adjusted gross income | Yearly base payment | Monthly, before the dependent reduction |
|---|---|---|
| $10,000 or less | $120 | $10.00 |
| $10,001 to $20,000 | 1% of AGI | $8.33 to $16.67, raised to the $10 floor where lower |
| $20,001 to $30,000 | 2% of AGI | $33.34 to $50.00 |
| $30,001 to $40,000 | 3% of AGI | $75.00 to $100.00 |
| $40,001 to $50,000 | 4% of AGI | $133.34 to $166.67 |
| $50,001 to $60,000 | 5% of AGI | $208.34 to $250.00 |
| $60,001 to $70,000 | 6% of AGI | $300.01 to $350.00 |
| $70,001 to $80,000 | 7% of AGI | $408.34 to $466.67 |
| $80,001 to $90,000 | 8% of AGI | $533.34 to $600.00 |
| $90,001 to $100,000 | 9% of AGI | $675.01 to $750.00 |
| Over $100,000 | 10% of AGI | $833.34 and up |
Monthly figures are rounded to the cent; the regulation does not say how servicers round. AGI is the adjusted gross income on your federal tax return. For a married borrower who files jointly, it is the couple's combined AGI, unless the borrower certifies that they are separated from the spouse or cannot reasonably access the spouse's income. A married borrower who files separately is assessed on their own AGI only.
Married borrowers: joint or separate returns
Filing status can move the payment a great deal. Take a borrower with $50,000 of AGI and student loans, married to a spouse with $40,000 of AGI and no student loans, with no dependents.
| Filing status | AGI used for RAP | Band | Monthly payment |
|---|---|---|---|
| Married filing jointly | $90,000 | 8% | $600.00 |
| Married filing separately | $50,000 | 4% | $166.67 |
On a joint return, the spouse's income both adds to AGI and pushes the whole amount into a higher band, so the payment is 3.6 times the separate-return figure. If the spouse also had eligible loans, the regulation would split the $600 between them: each borrower's payment is multiplied by that borrower's share of the couple's combined principal and interest balance on eligible loans, and a share that works out under $10 is raised to $10. Any change in the couple's federal income tax from filing separately has to be set against the payment difference. This page does not estimate that tax effect, which depends on the couple's whole return.
Why the bands create cliffs
The four older income-driven plans subtract a poverty-line allowance before applying their percentage: 225% of the federal poverty guideline for REPAYE, 150% for IBR and PAYE, and 100% for ICR. A small raise therefore adds a small amount to the payment. RAP works differently. The percentage applies to the whole AGI, so stepping into the next band raises the rate on every dollar at once.
| AGI moves from | Monthly payment | Yearly payment increase |
|---|---|---|
| $20,000 to $20,001 | $16.67 to $33.34 | $200.02 |
| $40,000 to $40,001 | $100.00 to $133.34 | $400.04 |
| $60,000 to $60,001 | $250.00 to $300.01 | $600.06 |
| $80,000 to $80,001 | $466.67 to $533.34 | $800.08 |
| $100,000 to $100,001 | $750.00 to $833.34 | $1,000.10 |
The jump at each edge is about 1% of the band edge itself, so it grows from about $200 a year at $20,000 to about $1,000 a year at $100,000. A borrower whose AGI lands just over an edge pays more for the year than someone a few dollars below it would pay. This follows from the arithmetic of the regulation's table, and it means the exact AGI figure matters more under RAP than it did under IBR or PAYE.
Because the plan reads AGI, anything that lowers AGI, such as pre-tax 401(k) deferrals (which are not reported as wages on the return), a deductible traditional IRA contribution, the HSA deduction or the student loan interest deduction, also lowers the RAP base. A borrower with $40,500 of AGI pays $135 a month (4% of $40,500 is $1,620 a year). Bringing AGI to $40,000 would make it $100 a month, $420 less over the year. Whether a contribution like that makes sense depends on the rest of the household's finances. The point here is only that RAP rewards an AGI figure just under a band edge more than the older plans did. The federal income tax brackets guide explains how AGI is built from gross income, and the 401(k) guide covers the contribution limits that cap how far a pre-tax deferral can move it.
The lowest band has a quirk of its own. AGI of exactly $10,000 gives a flat $120 base, but $10,001 gives 1% of AGI, $100.01, which is less. Both end at the $10 monthly floor, so the oddity costs nobody anything, but it shows the table was written as a schedule of flat rates rather than a smooth curve.
Monthly payments at eleven incomes
The regulation subtracts $50 a month for each dependent and then applies the $10 minimum. A "dependent" for RAP is someone who qualifies as a dependent under section 152 of the Internal Revenue Code and was claimed on the borrower's federal return. For a married borrower filing separately, only the dependents on the borrower's own return count. That is narrower than "family size" under the older plans, which can include a spouse who files jointly, children who get more than half their support from the borrower, and other people who live with the borrower and get more than half their support from them.
| AGI | No dependents | 1 dependent | 2 dependents | 3 dependents |
|---|---|---|---|---|
| $12,000 | $10.00 | $10.00 | $10.00 | $10.00 |
| $25,000 | $41.67 | $10.00 | $10.00 | $10.00 |
| $35,000 | $87.50 | $37.50 | $10.00 | $10.00 |
| $45,000 | $150.00 | $100.00 | $50.00 | $10.00 |
| $55,000 | $229.17 | $179.17 | $129.17 | $79.17 |
| $65,000 | $325.00 | $275.00 | $225.00 | $175.00 |
| $75,000 | $437.50 | $387.50 | $337.50 | $287.50 |
| $85,000 | $566.67 | $516.67 | $466.67 | $416.67 |
| $95,000 | $712.50 | $662.50 | $612.50 | $562.50 |
| $110,000 | $916.67 | $866.67 | $816.67 | $766.67 |
| $150,000 | $1,250.00 | $1,200.00 | $1,150.00 | $1,100.00 |
Show the numbers behind this figure
| AGI | Yearly base payment | Monthly, no dependents | Monthly, 2 dependents |
|---|---|---|---|
| $10,000.00 | $120.00 | $10.00 | $10.00 |
| $20,000.00 | $200.00 | $16.67 | $10.00 |
| $20,001.00 | $400.02 | $33.34 | $10.00 |
| $30,000.00 | $600.00 | $50.00 | $10.00 |
| $40,000.00 | $1,200.00 | $100.00 | $10.00 |
| $40,001.00 | $1,600.04 | $133.34 | $33.34 |
| $50,000.00 | $2,000.00 | $166.67 | $66.67 |
| $60,000.00 | $3,000.00 | $250.00 | $150.00 |
| $70,000.00 | $4,200.00 | $350.00 | $250.00 |
| $80,000.00 | $5,600.00 | $466.67 | $366.67 |
| $90,000.00 | $7,200.00 | $600.00 | $500.00 |
| $100,000.00 | $9,000.00 | $750.00 | $650.00 |
| $100,001.00 | $10,000.10 | $833.34 | $733.34 |
| $125,000.00 | $12,500.00 | $1,041.67 | $941.67 |
| $150,000.00 | $15,000.00 | $1,250.00 | $1,150.00 |
The dependent reduction is a flat dollar amount, so it matters most at low and middle incomes. At $45,000 two dependents cut the payment by two thirds. At $150,000 the same two dependents cut it by 8%. Your loan balance does not appear anywhere in the formula. Two borrowers with the same AGI and dependents owe the same monthly RAP payment whether they borrowed $15,000 or $150,000. The balance decides how long the payments last and whether the subsidies below apply, which the next sections cover.
Interest that is waived and principal that is matched
Two subsidies sit behind the payment, and both depend on the payment arriving on time.
Unpaid interest is not charged. During periods of repayment under RAP, the Department does not charge the account for accrued interest that the borrower's on-time payment for the month does not cover. A payment smaller than the month's interest therefore does not add unpaid interest to the balance.
Principal is matched up to $50. In a month when the borrower is not in deferment or forbearance and makes an on-time payment that reduces principal by less than $50, the Department reduces principal by the difference between $50 (or the payment itself, if smaller) and the amount of the payment that went to principal.
Taken together, a borrower paying at least $50 on time sees principal fall by at least $50 a month, and a borrower paying $10 sees it fall by at least $10. Take a borrower with $30,000 of new undergraduate Direct Loans at 6.52%, the fixed rate for undergraduate Direct Subsidized and Unsubsidized Loans first disbursed from July 1, 2026 to June 30, 2027, and AGI of $45,000. Interest runs $163 a month at the start, and the RAP payment is $150.
| One year on RAP, $30,000 at 6.52% | No dependents | 2 dependents |
|---|---|---|
| Monthly payment | $150.00 | $50.00 |
| Paid during the year | $1,800.00 | $600.00 |
| Interest not charged | $138.07 | $1,338.07 |
| Principal matched by the Department | $600.00 | $600.00 |
| Balance after 12 months | $29,400.00 | $29,400.00 |
Both borrowers end the year $600 lower, because in every month their own payment covers none of the principal and the $50 match does all of it. The borrower with two dependents pays a third as much and has $1,200 more of interest left uncharged. Under IBR and PAYE, by contrast, the regulation waives unpaid interest only on subsidized loans and only for the first three consecutive years on the plan, and under ICR it charges all accrued interest, so a payment below the interest lets the balance climb. Under RAP, in months of repayment with an on-time payment, the balance does not grow. Months of deferment or forbearance are outside both subsidies, so interest that accrues then is a separate question for the loan type.
There is a catch in the regulation for anyone who pays extra. If a payment is larger than the amount due, the next payment due date is automatically advanced, and the regulation says a borrower is not eligible for the matching principal and interest payment for periods without a due date. The borrower can opt out of the due-date advance, when paying electronically or by contacting the servicer, and the Department must disclose the consequences of either choice. A borrower who prepays without opting out loses the subsidies for the months the prepayment covered. Those months still count toward RAP forgiveness and as payments for Public Service Loan Forgiveness.
At a higher income the subsidies fade. The same $30,000 borrower at $70,000 of AGI pays $350 a month, which more than covers the interest, and receives neither subsidy. That borrower would clear the loan in about 116 months at a constant income. The $45,000 borrower, with the $50 a month match, would need about 435 months, which is longer than the 30-year forgiveness horizon described below. Both payoff counts assume income, dependents and the payment stay the same throughout, which real careers rarely do.
When the balance is forgiven
Under 34 CFR 685.209(k)(7), a RAP borrower's remaining balance is forgiven after 360 monthly payments or the equivalent, made over at least 30 years. The borrower must have been on RAP at some point and must have made the final payment under RAP before the loan is cancelled. The Department tracks progress toward forgiveness and forgives qualifying loans without an application.
The 360 payments can include more than RAP payments. The regulation lists:
- on-time RAP payments, and on-time payments under the Tiered Standard plan for loans made on or after July 1, 2026;
- payments under any other plan of at least the amount due on a 10-year standard plan;
- IBR payments of at least the required amount;
- before July 1, 2028, payments of at least the required amount under an income-contingent repayment plan or an alternative repayment plan;
- months in an unemployment or economic hardship deferment;
- months that ended before July 1, 2026 in listed deferments and forbearances, such as a cancer treatment deferment or a military service deferment.
Thirty years is longer than the forgiveness periods in the older plans: 20 years (240 payments) for new IBR borrowers and PAYE, 25 years (300 payments) for other IBR borrowers and ICR, with REPAYE also offering (on paper) a shorter path for original balances of $12,000 or less. For a borrower with a modest balance and an income that grows, the difference may not matter, because the loan can be paid off well before then. It matters most to borrowers with large balances relative to income, such as the $45,000 borrower above, whose loan would still have a balance at year 30 if their income never rose.
RAP also counts for Public Service Loan Forgiveness. The final rule adds RAP to the PSLF regulation's list of qualifying repayment plans, and the PSLF rule still requires the equivalent of 120 monthly payments while working full time for a qualifying employer. One difference sits in the PSLF text: the list of deferments and forbearances that count as PSLF months is introduced with the words "Except during periods when a borrower is enrolled in the Repayment Assistance Plan", so those paused months do not count toward the 120 for a RAP borrower.
RAP against IBR, for loans made before July 1, 2026
Borrowers whose loans were all made before July 1, 2026 can still choose Income-Based Repayment. New loans cannot. For a borrower who has the choice, the two formulas compare like this.
IBR charges 10% of discretionary income for new borrowers or 15% for everyone else, divided by 12. For IBR, a new borrower is one who had no outstanding Direct or FFEL balance before July 1, 2014 (or none on the date of a later loan made before July 1, 2026) and gets no new loan on or after July 1, 2026. Discretionary income is AGI minus 150% of the federal poverty guideline for your family size. The IBR payment is capped at what you would have paid on a 10-year standard plan, based on the loan balances and rates when you began paying under IBR. For 2026 the HHS poverty guideline for the 48 contiguous states and DC is $15,960 for one person and $27,320 for three, so the IBR allowances are $23,940 and $40,980.
The table assumes the same $30,000 at 6.52% as above, so the IBR cap is the $340.95 ten-year standard payment. That is an illustrative rate: loans eligible for IBR were made before July 1, 2026, and at the 2025-26 undergraduate rate of 6.39% the cap would be $338.97.
| Borrower | RAP | IBR at 10% | IBR at 15% |
|---|---|---|---|
| $30,000 AGI, single, no dependents | $50.00 | $50.50 | $75.75 |
| $45,000 AGI, single, no dependents | $150.00 | $175.50 | $263.25 |
| $45,000 AGI, 2 dependents (family of 3) | $50.00 | $33.50 | $50.25 |
| $70,000 AGI, single, no dependents | $350.00 | $340.95 (capped; formula $383.83) | $340.95 (capped; formula $575.75) |
| $70,000 AGI, 2 dependents (family of 3) | $250.00 | $241.83 | $340.95 (capped; formula $362.75) |
For a single borrower without dependents, RAP's monthly payment is lower than IBR at both rates in the first two rows. With dependents the order can flip. The IBR allowance grows by $8,520 of income (150% of the $5,680 step between family sizes in the 2026 guideline) for each extra family member, which at 10% is worth $71 a month, against RAP's flat $50 per dependent. So a borrower who qualifies for the 10% IBR rate and supports a family can pay less under IBR. And once income is high relative to the balance, the IBR cap takes over: at $70,000 the $30,000 borrower would pay $340.95 under IBR against $350 under RAP, because RAP has no cap tied to the balance.
The monthly payment is not the only difference. IBR does not have RAP's monthly interest waiver on unsubsidized loans or the $50 principal match, and its forgiveness clock runs 20 or 25 years instead of 30. A lower IBR payment can leave a larger balance growing underneath it. These tables only show how the two formulas behave on stated inputs; your servicer applies them to your own balances, rates and repayment history.
Who ends up on RAP, and when
The regulation sorts borrowers into three groups.
Loans made on or after July 1, 2026. A borrower with these loans may select the Tiered Standard plan or RAP, and a borrower who selects nothing is placed on Tiered Standard. Tiered Standard is a fixed-payment plan of at least $50 a month (or the remaining balance, if that is less than $50), with a term set by the total Direct Loans owed when the borrower enters repayment:
| Total Direct Loans at entry to repayment | Tiered Standard term |
|---|---|
| Less than $25,000 | 10 years |
| $25,000 to less than $50,000 | 15 years |
| $50,000 to less than $100,000 | 20 years |
| $100,000 or more | 25 years |
On $30,000 at 6.52%, a 15-year fixed payment is $261.66 a month, against RAP's $150 at $45,000 of AGI and $350 at $70,000. RAP payments follow income. Tiered Standard payments follow the balance.
Borrowers on PAYE or ICR. Before July 1, 2028, they must choose a plan they are eligible for: RAP, IBR, a standard plan, a graduated or extended plan, or, through June 30, 2028, their current plan. The terms of the new plan start on July 1, 2028, or earlier if the borrower asks. A borrower who has not chosen by July 1, 2028 is placed on RAP for loans eligible for it, and on IBR for loans that are not. Section 685.209(c)(2) still lists REPAYE (the plan once branded SAVE) through June 30, 2028 for borrowers with no Direct Loan made on or after July 1, 2026, but the final rule's preamble says the SAVE plan was held unlawful in federal court and the Department is enjoined from implementing it, so it is not a plan to count on.
Parent PLUS borrowers. Direct PLUS loans made to parents are not eligible for RAP, and neither are consolidation loans that repaid a parent PLUS loan. There is one exception. A consolidation loan that repaid a parent PLUS loan, and that was being repaid under ICR, PAYE or IBR on any date from July 4, 2025 through June 30, 2028, falls outside the excluded category. The regulation defines "being repaid" as at least one payment under those plans.
Eligible loan types for RAP are Direct Subsidized and Unsubsidized Loans, Direct PLUS loans made to graduate or professional students, and Direct Consolidation Loans that are not in the excluded parent PLUS category. Defaulted loans of those types are eligible too. FFEL loans are not on the list, so a FFEL borrower would need a Direct Consolidation Loan to bring that debt under it. The regulation also has a separate removal-from-default rule: the Department stops treating a loan as in default if the borrower supplies the information to calculate a payment, the payment "calculated pursuant to paragraph (f)" is $0, and the income information covers the point at which the loan defaulted. On a plain reading, paragraph (f) is the formula itself, before the $10 minimum in paragraph (g) is applied, and the regulation does not spell out how the two interact for a RAP borrower, so that case is one to confirm with the servicer.
Recertifying every year, and what happens if you don't
A RAP payment is set for 12 months at a time. To enter or stay on the plan, the borrower, and a spouse whose income is used, approves disclosure of federal tax information to the Department. That approval can be given in the promissory note or on the plan application. Without it, or if the Department has approval but cannot get the tax information from the IRS, the borrower has to send documentation of income and the number of dependents.
When three monthly payments remain in the 12-month period, the Department starts the recalculation. If it needs documents and does not get them by the time the last payment of the period is due, the regulation sets the payment at what the borrower would have paid on a 10-year standard plan based on the total balance of the loans when they entered repayment. For the $30,000 borrower at 6.52%, that is $340.95 a month instead of $150, about 2.3 times as much. A borrower who moved, changed email or let a tax-data consent lapse could meet this rule without having done anything else wrong.
The recalculation also works in the borrower's favour. A borrower whose circumstances change, such as a loss of income or employment or a divorce, can ask for a new calculation at any point in the 12-month period, and the period resets from the new information. To support a request, the regulation lists alternative documentation for cases such as a drop in income since the last tax return, separation from a spouse the borrower filed jointly with, and the birth or impending birth of a child. While the Department recalculates on that documentation, it grants a forbearance. Since the payment is priced on the tax information the Department last obtained, a borrower laid off in March would otherwise keep paying on the earlier income until the next recertification.
Two practical points follow from the dependent rule. Dependents count only if claimed on the return the Department uses, so a child born after that return was filed reduces the payment only after the borrower asks for a recalculation with documentation. And for a married couple filing separately, each borrower can count only the dependents on their own return.
The servicer's repayment disclosure is the authority on your own payment, and the regulation requires it to specify the payment and explain how it was calculated, so it can be checked against the base-payment table each year. This page explains how the regulation computes a payment; it is not financial or tax advice, and your servicer's figure is the one you owe. For the fixed-payment side, the student loan calculator runs a standard amortized payment: enter $30,000 at 6.52% over 120 months and it returns the $340.95 ten-year standard figure used above. It does not compute RAP. The debt payoff calculator shows how extra payments move a payoff date across several debts, and the debt avalanche vs snowball guide covers where a student loan sits among them. The guides index lists the rest of the borrowing guides.
Sources
- Federal Register, Reimagining and Improving Student Education: Federal Student Loan Program Final Regulations, May 1, 2026, effective July 1, 2026 (34 CFR 685.208 Tiered Standard terms; 685.209 RAP base payment table, dependent reduction, $10 minimum, spouse split, interest and matching principal rules, 360-payment forgiveness, IBR formulas, plan eligibility and transition, recertification, removal from default; 685.210 plan selection; 685.219 PSLF qualifying plans): https://www.federalregister.gov/documents/2026/05/01/2026-08556/reimagining-and-improving-student-education-federal-student-loan-program-final-regulations (checked October 28, 2026)
- eCFR, 34 CFR 685.208, 685.209 and 685.219, current text (eCFR up to date as of October 26, 2026; 685.209 last amended July 1, 2026): https://www.ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685 (checked October 28, 2026)
- Federal Register, Annual Notice of Interest Rates for Fixed-Rate Federal Student Loans Made Under the William D. Ford Federal Direct Loan Program, September 10, 2026 (6.52% undergraduate rate for loans first disbursed July 1, 2026 to June 30, 2027): https://www.federalregister.gov/documents/2026/09/10/2026-18493/annual-notice-of-interest-rates-for-fixed-rate-federal-student-loans-made-under-the-william-d-ford (checked October 28, 2026)
- U.S. Department of Health and Human Services, ASPE, 2026 Poverty Guidelines: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines (checked October 28, 2026)
- IRS, Schedule 1 (Form 1040), Part II Adjustments to Income (lines 13 HSA deduction, 20 IRA deduction, 21 student loan interest deduction): https://www.irs.gov/pub/irs-pdf/f1040s1.pdf, and IRS Topic no. 424, 401(k) plans (elective deferrals not reported as wages): https://www.irs.gov/taxtopics/tc424 (checked October 28, 2026)
- Payment tables, the cliff table, the one-year balance path, payoff months and the IBR comparisons are CalculatorVillage calculations on the rules above, with the inputs stated in each table.