U.S. Student Loan Overhaul: New RAP Plan Raises Monthly Payments for Most, Available July 1, 2026

The U.S. Department of Education will launch the Repayment Assistance Plan (RAP) on July 1, 2026, phasing out other income-driven plans. For most borrowers, this results in higher monthly payments than the existing Income-Based Repayment (IBR) plan. As of March 2026, 2.65 million borrowers held $176.7 billion in IBR debt. RAP calculates payments as a percentage of adjusted gross income, with a $10 minimum and $50 reduction per dependent. Unpaid interest is waived if the payment doesn't cover accruing interest, so balances never grow. Loan forgiveness requires 360 qualifying payments, compared with 240 or 300 under IBR. IBR caps payments at the 10-year standard amount; RAP has no cap. Borrowers who switch from IBR to RAP carry over payment counts toward forgiveness, but moving out of RAP later resets those counts for IBR forgiveness. IBR remains available to those who borrowed before July 1, 2026.