Student’s Loan Changes: The U.S. student loan system is going through a huge change, and it’s already creating stress for a lot of borrowers. The government is starting a new setup called the Repayment Assistance Plan (RAP), and it’s going to work very differently than what people are used to. It’s tied to your income and is supposed to make things simpler.
RAP becomes the new rule
Starting July 1, 2026, anyone taking out federal student loans will be placed in the new RAP system automatically, unless they choose the standard 10-year plan. People who already have loans don’t get to ignore this change either they can stay on older plans like SAVE or IBR, but only until July 1, 2028. After that, they’ll have to move to RAP or the basic fixed payment plan.
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The Department of Education says RAP is part of a bigger law passed earlier this year, known as the “One Big, Beautiful Bill.” It’s meant to make loan repayment easier and clearer. But with change always comes questions, and this plan has raised a lot.
How RAP works?
This new plan calculates how much you pay each month based on your gross income (before taxes), not your discretionary income like past IDR plans. This means if you earn more, your monthly payments could be way higher than what you’d pay now under SAVE or PAYE. It doesn’t really leave room for people in the middle those who don’t make enough to comfortably pay big chunks, but also don’t qualify for $0 payments anymore.
if you’re a parent with Parent PLUS loans, RAP doesn’t apply to you at all. You’ll be stuck choosing from the standard plans, which might not help much.
How RAP works
The Repayment Assistance Plan (RAP) sets up payments based on adjusted gross income (AGI) and is different from past plans. Here is how it works:
- Minimum $10 a month if you make under $10,000.
- Pay 1% to 10% of your AGI as it grows.
- Get $50 off each month for each family member you support.
- After 30 years, the rest of what you owe is dropped, but you might have to pay tax on it.
- RAP stops interest from adding up, helping keep your debt from growing.
- RAP payments count towards the Public Service Loan Forgiveness program.
What things are being changed
The RAP is designed to replace nearly all existing income driven plans and will be the only choice for new loan takers, replacing:
- SAVE (Saving on a Valuable Education)
- PAYE (Pay As You Earn)
- REPAYE
- ICR (Income-Contingent Repayment)
- IBR (Income-Based Repayment)
Who it affects?
Even though RAP aims to fix the confusing mess of student loan options, it makes other things harder. The time to get loan forgiveness will take longer, and the break on interest isn’t automatic anymore you’ll only get it under certain conditions. That could lead to higher balances over time, especially for people who aren’t earning enough to really chip away at their loans.
Can Current Student’s Loan Borrowers Keep Their Repayment Plans Under the Big Beautiful Bill?
What borrowers need to do
If you already have loans and like your current plan, it’s super important to lock it in before July 2028. After that, switching won’t be an option. Financial aid experts say you should try using the federal loan simulator to figure out if RAP or sticking with your old plan works better for you. It’s also a good time to think about your future earnings, family plans, and whether you can manage these new monthly payments.
The biggest fear is that this move could drive more people toward private student loans, especially those in grad school who are already dealing with loan limits. Private loans often don’t have the same protections or forgiveness options, so that could add more risk.
