RAP Student Loan Calculator 2026

SAVE vs RAP — What Changes in July 2026

The SAVE (Saving on a Valuable Education) plan is being replaced by the RAP (Repayment Assistance Plan) starting July 1, 2026. Under SAVE, borrowers could qualify for $0 monthly payments if their income was low enough, and payments were based on discretionary income — the amount you earn above 225% of the federal poverty level. RAP fundamentally changes this by basing payments on your full adjusted gross income (AGI) and eliminating $0 payment months entirely. The minimum payment under RAP is $10 per month. If you are currently enrolled in SAVE, you will be automatically transitioned to RAP unless you choose a different plan before the deadline.

How RAP Payments Are Calculated

RAP uses a stepped formula based on your full AGI rather than discretionary income. Every borrower pays at least $10 per month. Above the federal poverty level for your family size, your payment increases by 1% of your income for every $10,000 earned above that threshold. For example, if the poverty level for a family of four is $32,150 and you earn $52,150, that is $20,000 above the threshold, so your payment would be 2% of your income (1% for each $10,000 above poverty). This progressive approach means lower earners pay closer to the $10 minimum while higher earners pay proportionally more.

The 1% Step Rule Explained

The 1% step rule is the core mechanism of RAP. For every $10,000 your AGI exceeds the federal poverty level for your family size, your required payment percentage increases by 1% of your full income. This creates a graduated payment structure. At exactly the poverty level or below, you pay the $10 minimum. At $10,000 above poverty, you pay 1% of your total AGI. At $20,000 above, 2% of AGI. This continues upward with no stated cap in the current legislation. The step rule replaces the flat 5% or 10% of discretionary income used in SAVE and IBR, making the calculation simpler but often resulting in higher payments for middle-income borrowers.

Who Pays More Under RAP vs SAVE

Middle-income borrowers will generally pay more under RAP than they did under SAVE. Under SAVE, someone earning $45,000 with a family of one could have a very low payment because 225% of the poverty level ($35,213) left only $9,787 in discretionary income, of which just 5% was owed monthly. Under RAP, that same borrower pays based on their full $45,000 income using the step rule. Low-income borrowers who previously qualified for $0 payments will now owe at least $10 per month. However, very high-income borrowers may pay less under RAP than under Standard repayment, since RAP caps at a percentage of income rather than a fixed amortization schedule. Borrowers with graduate loans are especially impacted since SAVE used 10% of discretionary income for grad loans while RAP applies the same step formula regardless of loan type.

RAP Forgiveness Timeline and Eligibility

Under RAP, remaining loan balances are forgiven after 30 years of qualifying payments, regardless of whether you borrowed for undergraduate or graduate education. This is a significant change from SAVE, which offered forgiveness after 20 years for undergrad loans and 25 years for grad loans. The extended timeline means borrowers will make payments for 5 to 10 additional years before reaching forgiveness. However, RAP does include a borrower-friendly provision: interest does not capitalize during periods of deferment or forbearance. If your payments do not cover the monthly interest, the unpaid interest will not be added to your principal balance, preventing your loan from growing while you are in the program.