RAP Plan Begins July 1 Your 2026 Plan Guide
RAP plan begins July 1 Your 2026 Plan Guide. If you’ve been swiping past those emails from your student loan servicer, this is the one to open. The Saving on a Valuable Education (SAVE) plan the program that froze payments and interest for more than 7 million borrowers is officially over. In its place comes a new income-driven plan called the RAP plan, and the clock, meanwhile, is now the part that should worry you.
Here’s the trap. Once your servicer sends its notice, you get just 90 days to choose a new plan. Do nothing, and the government picks one for you almost always the pricier Standard option. Your bill could jump from $0 to several hundred dollars a month, and you never agreed to it.
Table of Contents
So this guide skips the legalese. First, you’ll get a plain-English breakdown of what changed. Then you’ll see side-by-side RAP vs Standard payment examples, and finally a simple decision tree so you walk away knowing exactly which plan to pick before your window slams shut.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Confirm your specific options at StudentAid.gov or with your loan servicer before making a decision.
Is the SAVE Plan Really Ending?
Yes. SAVE is ending. A federal court vacated the plan on March 10, 2026, and it can no longer be used. Starting July 1, 2026, servicers begin notifying the 7-million-plus SAVE borrowers, who then get 90 days to switch to a legal repayment plan or be moved automatically.
Next, the transition begins. According to the U.S. Department of Education, federal loan servicers will start mailing notices on or around July 1, 2026. Each notice carries a specific deadline: 90 days to enroll in a lawful plan. For most people, that means a decision by late September 2026.
However, miss it, and you don’t get to stay in limbo. You’ll be auto-enrolled in the Standard plan or the new Tiered Standard plan both of which, the Department admits, “generally have higher payments than IDR plans.” That’s the loss-aversion piece in plain numbers: inaction has a price tag.
Miss it, and you don’t get to stay in limbo. You’ll be auto-enrolled in the Standard plan or the new Tiered Standard plan — both of which, the Department admits, “generally have higher payments than IDR plans.” That’s the loss-aversion piece in plain numbers: inaction has a price tag.
What Is the RAP Plan?
The RAP plan was created by the 2025 reconciliation law, so it becomes the main income-driven option for the future. The mechanism is simpler than SAVE however, that’s both its strength and its catch.
RAP was created by the 2025 reconciliation law and becomes the main income-driven option for the future. The mechanism is simpler than SAVE and that’s both its strength and its catch.
Instead of shielding a chunk of your income before calculating the bill, RAP looks at your entire AGI and applies a flat percentage based on which bracket you land in:
| Annual AGI | RAP rate |
|---|---|
| $10,000 or less | $10/month (flat) |
| $10,001 – $20,000 | 1% of AGI |
| $20,001 – $30,000 | 2% of AGI |
| $30,001 – $40,000 | 3% of AGI |
| $40,001- $50,000 | 4% of AGI |
| $50,001 – $60,000 | 5% of AGI |
| $60,001 – $70,000 | 6% of AGI |
| $70,001 – $80,000 | 7% of AGI |
| $80,001 – $90,000 | 8% of AGI |
| $90,001 – $100,000 | 9% of AGI |
| Over $100,000 | 10% of AGI |
A few details make a real difference. First, you subtract $50 from the monthly figure for each dependent. In addition, every borrower pays at least $10 there’s no more $0 bill like SAVE allowed. And the RAP plan comes with two genuine safety nets: if your payment doesn’t cover the month’s interest, the unpaid interest is waived, and if your payment doesn’t shrink your principal by at least $50, the government chips in a matching payment to make up the difference. So your balance can’t balloon while you pay.
Still, the trade-offs are just as real. For example, forgiveness takes 30 years, not the 20 or 25 of older plans. Parent PLUS loans aren’t eligible. And here’s the one that bites: once you enter RAP, you can’t switch back to a Standard plan later. Choose deliberately.
RAP Plan vs Tiered Standard: Real Payment Examples
This is where the government and university pages go quiet. They explain the rules, but then leave you to do the math. So let’s do it.
The RAP plan is calculated from your income. Meanwhile, the Standard and Tiered Standard plans are calculated from your balance. That’s the key to comparing them.
First, RAP by income (single borrower, no dependents):
| Your AGI | RAP rate | Estimated RAP payment |
|---|---|---|
| $25,000 | 2% | ~$42/mo |
| $35,000 | 3% | ~$88/mo |
| $50,000 | 4% | ~$167/mo |
| $75,000 | 7% | ~$438/mo |
| $110,000 | 10% | ~$917/mo |
Next, the Tiered Standard plan by balance. According to PHEAA estimates (6.4% interest), the term stretches as your balance grows:
| Your Balance | Term | Median monthly payment |
|---|---|---|
| $0 – $25,000 | 10 years | ~$141/mo |
| $25,000 – $50,000 | 15 years | ~$325/mo |
| $50,000 – $100,000 | 20 years | ~$555/mo |
| Over $100,000 | 25 years | ~$736/mo |
Quick sidebar the median snapshot: A borrower with a small $25k balance pays roughly $141/mo on Tiered Standard, while a borrower with a $110k balance pays about $736/mo stretched over 25 years. RAP, by contrast, ignores your balance entirely and tracks your paycheck so a $35k earner pays around $88/mo no matter how big the debt.
So what’s the takeaway? If your balance is high but your income is modest, the RAP plan usually wins. However, if you earn well and owe little, the Standard math can finish faster and cheaper overall. In short, there’s no universal winner only the right fit for your two numbers.
SAVE Borrower? Exactly What to Do in Your 90-Day Window
Forget the panic. Instead, work the decision in order. Here’s the tree.
Step 1, Confirm the clock. Don’t guess your deadline. Wait for the servicer notice (arriving from July 1, 2026) and read the exact date. The 90 days start from that notice, not a blog rumor.
Step 2, Pull your two numbers. Your latest AGI (from your tax return) and your total federal loan balance. Every choice below hinges on these.
Step 3, Run the comparison. Plug both into the official Loan Simulator at StudentAid.gov. It now models RAP and Tiered Standard side by side.
Step 4, Pick your lane:
- Chasing PSLF or low income vs. high balance? Lean income-driven. Compare RAP against IBR both count toward Public Service Loan Forgiveness.
- Solid income, smaller balance? The Standard or Tiered Standard plan may cost less in total interest and finish years sooner.
- Not sure and want to keep options open? Consider IBR as your landing spot. It’s still available, it’s income-driven, and unlike RAP it isn’t a one-way door.
Step 5, Enroll before the deadline. Log in to StudentAid.gov; the application takes about 10 minutes. While you’re there, switch on auto-pay from July 1, 2026, it earns a 1% interest rate reduction, up from the old 0.25%.
What Most People Get Wrong About the 90-Day Deadline
Here’s the part the rule-explainer pages bury and it can save you money.
You’re not forced straight into RAP. Leaving SAVE within 90 days is mandatory. Choosing RAP is not. IBR survived the overhaul (and it dropped its old “financial hardship” entry requirement), so it’s open to far more borrowers as an income-driven alternative with shorter forgiveness timelines.
RAP is a one-way door. This is the costliest mistake waiting to happen. Once you’re in RAP, you can’t move to a Standard plan later. If there’s any chance your income or strategy shifts, factor that in before you click.
Don’t pay into a forbearance hoping it counts. Payments made during the SAVE forbearance haven’t counted toward PSLF or IDR forgiveness. If forgiveness is your goal, the priority is getting into a qualifying plan not making payments that earn no credit.
Auto-enrollment is the expensive default. Skip the decision and you land in Standard or Tiered Standard, which the Department says generally cost more than income-driven plans. The 90-day window isn’t red tape it’s your one chance to choose the cheaper path on purpose.
Frequently Asked Questions
Is the SAVE plan really ending in 2026?
Yes. A federal court vacated SAVE on March 10, 2026, and the law phases it out entirely. Beginning July 1, 2026, servicers notify enrolled borrowers, who then have 90 days to switch to a legal repayment plan before being moved automatically.
What is the RAP plan?
The Repayment Assistance Plan (RAP) is the new income-driven plan launching July 1, 2026. It charges 1% to 10% of your adjusted gross income, with a $10 minimum payment, a $50 cut per dependent, built-in interest waivers, and loan forgiveness after 30 years of qualifying payments.
How much will RAP cost me each month?
RAP costs a set percentage of your AGI based on your income bracket. For example, a single borrower earning $50,000 pays about $167 a month (4%), while someone earning $110,000 pays roughly $917 (10%). Subtract $50 per dependent, with a $10 monthly minimum.
What happens if I miss the 90-day deadline?
If you don’t choose a plan within your 90-day window, your servicer automatically enrolls you in the Standard plan or the new Tiered Standard plan. The Department of Education notes these generally carry higher monthly payments than income-driven options like RAP or IBR.
Should I pick the RAP plan or IBR?
It depends on your numbers. RAP forgives balances after 30 years; IBR keeps the shorter 20-to-25-year timeline and lets you switch plans later. Both count toward PSLF. Run both through the StudentAid.gov Loan Simulator before deciding, since RAP is irreversible once selected.
Can I switch off the RAP plan later?
No. Once you enroll in RAP, you cannot move back to a Standard repayment plan. This makes RAP a one-way decision, so weigh your long-term income outlook carefully before choosing it over a more flexible option like IBR.
Are Parent PLUS loans eligible for RAP?
No. Parent PLUS loans and consolidation loans that repaid Parent PLUS debt are not eligible for RAP. Parent borrowers who want income-driven repayment generally need to consolidate and enroll in an eligible plan before the relevant deadlines. Check your options with your servicer.
The Bottom Line
Three things to remember. SAVE is gone, and your 90-day clock starts the moment your servicer’s notice lands. RAP ties your payment to your income and shines for high-balance, modest-income borrowers but it’s a one-way door with a 30-year forgiveness timeline. And doing nothing is the most expensive choice of all, because the auto-enrollment default usually costs more.
So pull your AGI and your balance, run them through the official Loan Simulator, and lock in your plan before the window closes. Future you will be glad you didn’t let the government choose.
Which plan are you leaning toward for your 90-day window RAP, IBR, or Standard? Tell us in the comments.
