The Compensation Help Plan, or RAP, is the most recent scholar mortgage reimbursement plan, created from President Donald Trump’s “large, lovely invoice.”
The plan is slated to roll out on July 1, 2026. It can substitute the present income-driven reimbursement program. Whereas some debtors might need decrease month-to-month payments on RAP in comparison with present income-driven reimbursement plans, they could additionally see an extended reimbursement time period and pay extra general.
Most federal scholar mortgage debtors can entry RAP, together with debtors with graduate college debt. Nonetheless, mother or father PLUS mortgage debtors aren’t eligible.
RAP at a look:
Compensation time period till forgiveness: 30 years.
Cost quantities: 1-10% of your annual adjusted gross earnings; proportion is predicated on incomes stage. $10 flat funds for these incomes $10,000 per yr or much less.
Different {qualifications}: Should have federal direct or grad PLUS loans.
Greatest for: Debtors with a considerable amount of debt relative to their earnings, who take out a mortgage on or after July 1, 2026. These debtors are ineligible for present income-driven reimbursement plans.
Compensation Help Plan: timeline and choices for debtors
New and present debtors could join RAP beginning on July 1, 2026.
Should you took out your whole scholar loans previous to July 1, 2026, you’ll have these reimbursement choices going ahead:
The Schooling Division will remove the Saving on a Worthwhile Schooling (SAVE), Pay as You Earn (PAYE) and Earnings-Contingent Compensation (ICR) plans by July 1, 2028. IBR and RAP shall be your solely income-driven choices.
Should you take out a brand new scholar mortgage on or after July 1, 2026, your whole loans will change into ineligible for IBR, together with the graduated and prolonged plans. (July 1, 2026 is the primary day you possibly can take out a federal scholar mortgage for the 2026-27 educational yr.)
As a substitute, you’ll solely have two reimbursement choices:
Normal reimbursement plan, which isn’t tied to earnings.
That is the case even when you’ve got some older loans, since you should repay all loans on the identical reimbursement plan. For instance:
Say you began your undergraduate program through the 2024-2025 college yr and took out a federal scholar mortgage. Then for the third college yr — 2026-2027 — you’ll want to borrow extra. Now it’s after that July 1, 2026 deadline. So each loans, together with these from the 2024-2025 college yr, can be ineligible for IBR.
Or, possibly you completed your undergrad in 2024 and have already got federal loans. Should you return to highschool for a grasp’s diploma in 2027 and take out federal loans for it, each these and the undergrad loans would change into ineligible for IBR.
RAP timeline abstract and motion gadgets
RAP turns into accessible. New and present debtors can elect to enroll within the plan.
Debtors who take out a brand new mortgage on or after this date will solely have entry to RAP or the usual reimbursement plan.
July 1, 2026 – June 30, 2028.
Debtors with all pre-July 1, 2026 loans can stay of their present income-driven reimbursement plan – SAVE, PAYE, ICR or IBR – throughout this time.
Nonetheless, they need to enroll within the Earnings-Based mostly Compensation (IBR) plan by June 30, 2028 on the newest to get grandfathered into the income-driven reimbursement program.
The newest date when debtors with all pre-July 1, 2026 loans, who’re nonetheless enrolled in SAVE, PAYE or ICR, shall be moved into RAP. They won’t have the choice to enroll in IBR sooner or later.
Find out how to estimate your month-to-month Compensation Help Plan invoice
RAP month-to-month funds are graduated based mostly in your annual adjusted gross earnings (AGI) within the earlier tax yr. The extra you earn, the bigger the slice of your earnings you’ll pay every month towards your scholar loans.
Discover your RAP base cost
1% of adjusted gross earnings (AGI).
After getting your base cost, use this system to calculate your month-to-month RAP invoice:
(RAP base cost / 12) – $50 per dependent = Estimated month-to-month RAP cost
Father or mother PLUS loans ineligible for Compensation Help Plan
You probably have present mother or father PLUS loans, and also you need decrease funds based mostly on earnings at any level sooner or later, you need to do the next:
These strikes will assist you to transition to the IBR plan, so you possibly can keep within the income-driven reimbursement system till you repay your loans. Should you do not do that, the usual reimbursement plan shall be your solely choice going ahead.
Any debtors who take out a brand new mother or father PLUS mortgage on or after July 1, 2026 can solely entry the usual plan — together with for any older mother or father PLUS loans. Maintain this in thoughts when you’ve got a scholar who’s presently in faculty.
Public Service Mortgage Forgiveness and the Compensation Help Plan
Debtors who take out loans on or after July 1, 2026, should select RAP as a way to profit from Public Service Mortgage Forgiveness (PSLF). PSLF forgives remaining federal scholar debt after 10 years of working a public service job and making scholar mortgage funds.
The Compensation Help Plan vs. income-driven reimbursement plans
Although the RAP nonetheless ties funds to earnings, it has a couple of key variations from present income-driven reimbursement plans. For instance:
RAP doesn’t take inflation into consideration. RAP makes use of adjusted gross earnings (AGI) to calculate funds, whereas IDR plans use discretionary earnings.
Discretionary earnings for IDR plans is the distinction between your earnings and 100%, 150% or 225% of the federal poverty line. Moreover, the federal poverty line modifications over time in response to inflation, so discretionary earnings — and scholar mortgage funds — change consequently.
AGI is your earnings minus some tax deductions, and it doesn’t take inflation over time into consideration. Which means RAP funds could change into harder to handle within the long-term.
Adjustments to household dimension reductions. IDR plans regulate funds based mostly on household dimension — which can embody mother and father or different adults in your house. The RAP calculation solely considers dependent kids.
No $0 funds. Not like income-driven reimbursement plans, you’ll by no means have $0 month-to-month funds on RAP in case you lose your job or have a really low earnings. The bottom cost you possibly can have is $10.
RAP is dearer than SAVE for all debtors. Debtors face larger month-to-month funds on RAP than on SAVE, no matter their earnings or household dimension, in accordance with a latest evaluation by the Scholar Borrower Safety Heart, a nonprofit borrower advocacy and analysis group. Launched by the Biden administration, SAVE was beforehand probably the most inexpensive scholar mortgage plan.
The ICR plan is the one present income-driven choice that’s persistently dearer than RAP, the evaluation discovered.
How RAP stacks up towards present income-driven reimbursement plans
Compensation Help Plan (RAP)
Earnings-Based mostly Compensation (IBR)
Saving on a Worthwhile Schooling (SAVE)
Earnings-Contingent Compensation (ICR)
Compensation time period / time to forgiveness
Quantity of protected earnings (the rest is discretionary)
150% of earnings above the federal poverty line in your location and household dimension.
225% of earnings above the federal poverty line in your location and household dimension.
100% of earnings above the federal poverty line in your location and household dimension.
150% of earnings above the federal poverty line in your location and household dimension.
$10, or 1-10% of your adjusted gross earnings.
10% or 15% of discretionary earnings.
10% of discretionary earnings.
20% of discretionary earnings.
10% of discretionary earnings.
$50 month-to-month low cost per dependent baby.
Components takes whole household dimension into consideration.
Components takes whole household dimension into consideration.
Components takes whole household dimension into consideration.
Components takes whole household dimension into consideration.
Unpaid curiosity every month is waived, so steadiness can’t develop.
Unpaid curiosity every month waived for first three years on backed loans; no curiosity waiver on different mortgage varieties.
Unpaid curiosity every month is waived, so steadiness can’t develop.
No curiosity subsidy. Unpaid curiosity builds every month, doubtlessly growing excellent steadiness.
Unpaid curiosity every month waived for first three years on backed loans; no curiosity waiver on different mortgage varieties.
How present debtors can keep away from the Compensation Help Plan
Should you’re presently enrolled in one of many three income-driven reimbursement plans which can be going away — SAVE, PAYE or ICR — your scholar mortgage servicer will robotically transfer you into the RAP by July 1, 2028. There’s no going again.
You possibly can keep away from RAP by signing up for the Earnings-Based mostly Compensation (IBR) plan on studentaid.gov/IDR earlier than July 1, 2028 — on the very newest. Don’t delay your IBR enrollment, since purposes can take time to course of, and the Schooling Division could attempt to pace up this deadline.
Should you enroll in IBR, you possibly can keep on that plan till you repay your loans. You’ll nonetheless have the choice to change to RAP or the usual plan down the road.
The higher reimbursement plan — RAP or IBR — depends upon your earnings, general monetary state of affairs, household dimension and scholar debt quantity. Earlier than selecting between RAP and IBR, examine your estimated month-to-month funds, whole reimbursement prices and forgiveness timelines below every plan.
