This page does not determine official eligibility and is not legal, tax, financial, or official program advice. Verify current rules with Federal Student Aid, your servicer, or another qualified source before acting.
Quick Answer
A major federal student loan repayment change begins July 1, 2026. The Department of Education's June 9, 2026 fact sheet says borrowers with new student loans will have access to two streamlined repayment options: the Repayment Assistance Plan, or RAP, and the Tiered Standard repayment plan. RAP is income-driven, with monthly payments based on 1% to 10% of income, reduced by $50 per month for each dependent. ED also describes an unpaid-interest waiver for borrowers who make on-time payments and a matching principal payment benefit of up to $50 per month when a borrower's payment does not reduce principal by at least $50. Borrowers still need to compare plans carefully because RAP is not automatically the lowest-cost option for every household.
What Borrowers Should Know
Federal student loan repayment is changing again, and the biggest new term borrowers will hear this summer is RAP: the Repayment Assistance Plan.
On June 9, 2026, the U.S. Department of Education released a fact sheet explaining how the Working Families Tax Cuts Act changes repayment options. Starting July 1, 2026, borrowers with new federal student loans will have access to the Repayment Assistance Plan and the Tiered Standard repayment plan. The Department describes the change as a move away from a complicated menu of repayment and discharge options toward two main repayment paths.
RAP is the new income-driven option. Unlike older income-driven repayment plans that used discretionary income, the Department says RAP monthly payments are based on a percentage of borrower income. The percentage ranges from 1% to 10%, depending on how much the borrower earns. RAP also reduces the calculated payment by $50 per month for each dependent.
That dependent reduction matters because RAP does not work exactly like older IDR plans. Borrowers should not assume that a payment under RAP will match a previous SAVE, PAYE, ICR, or IBR payment. ED says that for many borrowers RAP payments may be similar to or lower than prior IDR payments, but borrower outcomes depend on income, dependents, loan mix, and current plan.
RAP's headline borrower protection is its interest treatment. According to ED, when a borrower makes an on-time monthly payment under RAP, remaining unpaid monthly interest is waived. The plan also includes a matching principal payment. If the borrower's on-time payment does not reduce principal by at least $50, ED says it will provide a matching principal payment of up to $50 for that month.
The plan also includes a long forgiveness timeline. ED says borrowers who still have a remaining balance after making 360 monthly, on-time payments under RAP may receive a discharge. That is 30 years of on-time payments. Borrowers pursuing Public Service Loan Forgiveness or another discharge path should verify how RAP interacts with their specific program before changing plans.
The safest first step is practical: log in to StudentAid.gov, confirm every loan type, current repayment plan, servicer, payment count if applicable, and whether tax-information consent is on file. ED says borrowers who consent to federal tax-information sharing can apply faster because they do not need to manually upload income information.
RAP may be useful for borrowers who need income-based payments and want protection against unpaid monthly interest. It may be less attractive for borrowers who can pay off loans faster, who have a better result under IBR, or who are close to forgiveness under another pathway. Treat RAP as a new option that needs a borrower-specific comparison.
Action Checklist
- Log in to StudentAid.gov and confirm loan type, servicer, balance, payment status, and current plan.
- Save screenshots or PDFs before submitting any repayment, consolidation, forgiveness, or complaint form.
- Ask your servicer for written confirmation when the answer affects payment amount, eligibility, or deadlines.
- Recheck official sources on the day you act, especially when rules, dates, or application access may have changed.
What This Guide Covers
- What changed on June 9, 2026
- How RAP calculates monthly payments
- Interest waiver and principal match
- Forgiveness after 360 on-time payments
- What borrowers should check before switching