Repayment Assistance Plan (RAP) Calculator for Student Loans

Last Updated: August 11, 2025

Not sure if RAP will be your best option?

Wondering what your monthly payment might look like?

This page can help.

The Repayment Assistance Plan (RAP) is a new Income-Driven Repayment (IDR) option that will be available by July 2026. For anyone taking out their first federal student loan on or after that date, RAP will be the only IDR plan available.

RAP calculates your monthly payment based on your income and the number of dependents in your household under age 17. Your loan balance and interest rate do not directly affect the payment amount, but they do matter if you’re comparing RAP to older IDR plans.

Unlike IBR and PAYE, RAP does not have a payment cap. This can be fine for many borrowers, but for very high earners, the lack of a maximum payment can be a major disadvantage.

One of RAP’s biggest benefits is that your balance will not grow significantly if your payment does not cover all of the interest. This can be a major advantage during residency or fellowship when your income is lower.

👇 Try the RAP Calculator Below

Want to see how what your payment on the RAP plan may look like?

Enter your info to estimate your monthly payment under each plan.

Married? Or want to see how RAP compares to IBR and RAP?

Check out the full IDR Calculator instead.

Calculations are believed to be correct. If you notice anything that doesn’t look right, please send an email to michael@dreambiggerfinancial.com.

So… How Does RAP Actually Work?

Let’s start with the basics.

Most people assume their student loan payment is based on how much they owe.

That’s true under the 10-Year Standard Repayment Plan, which is the default if you don’t take action after graduation.

But RAP works differently.

It’s based on:

• • Your income (the higher your income, the higher your payment)

  • Your number of dependents under age 17 (the more dependents under age 17, the lower your payment)

It’s designed to adjust with your life.

Lower payments when you are just getting started. Higher payments as your income grows.

Let’s take Dr. Patel as an example.

He’s a first-year resident earning $65,000. He has $300,000 in student loans.

• • Under RAP, his monthly payment is around $325.

That’s manageable, especially during training.

But once he becomes an attending making $300,000, the RAP plan recalculates based on that new income.

His payment goes up… and that shift can catch people off guard if they’re not planning for it.

Understanding how RAP works now can help you stay ahead of those future jumps.

RAP – Plan Overview

Available to all borrowers by July 1, 2026

Only available IDR option for borrowers taking out any federal student loan on or after that date

• • Payment amount is based on your income and the number of dependents under age 17 in your household
  • Forgiveness after 30 years of qualifying payments
  • No monthly payment cap — payments continue to rise as income increases
  • Interest Subsidy: No negative amortization — if your payment does not cover the full monthly interest, your loan balance will not grow
  • Principal subsidy: Up to $50 per month if payment does not cover the principal portion of the loan

Who Is Eligible for RAP

The One Big Beautiful Bill, passed on July 4, 2025, brought some big changes to student loan repayment.

Starting July 1, 2026, RAP will become the default Income-Driven Repayment (IDR) plan.

Your eligibility for Income-Based Repayment (IBR) and Pay As You Earn (PAYE) all depends on whether you’re considered a new borrower or an old borrower.

So… which one are you?

• • New borrowers are anyone who takes out a federal student loan on or after July 1, 2026

  • Old borrowers are those who took out all of their loans before July 1, 2026 and don’t borrow again after that date

This cutoff matters because your repayment plan options depend on which group you’re in.

If you’re a new borrower…

Your income-based repayment options will be limited to:

• • The New Standard Plan, which is based on how much you owe and your interest rate

  • The new RAP Plan, which is based on your Adjusted Gross Income (AGI) and number of kids under 17

You won’t be eligible for IBR or PAYE.

If you’re an old borrower…

You’ll still be able to access:

• PAYE, until it’s phased out in July 2028

• IBR, with no current end date

• RAP, once it launches in 2026

• Old Standard Repayment Plan

• Graduated Repayment Plan

• Extended Repayment Plan

If you’re already on IBR before July 2026, you can stay on it as long as you want.

Even if you’re not on IBR now, you can still enroll in it later as long as you’re an old borrower and meet the eligibility rules.

But PAYE is going away… Even if you’re using PAYE now, you’ll eventually have to switch to IBR or RAP.

One thing to know about switching plans:

Old borrowers who choose RAP can technically switch to IBR later, but any time spent in RAP won’t count toward forgiveness under IBR.

Your forgiveness clock under RAP continues while you’re in that plan, but if you move back to IBR, it starts fresh for that plan.

So you can’t spend 5 years in RAP, then switch to IBR and expect those 5 years to count. They won’t.

Choose your plan carefully based on your goals.

Need help deciding?

Reach out for a custom plan.

What If My Income Is Too High?

RAP does not have a partial financial hardship requirement.

No matter how much you earn, you can enroll in RAP if you are eligible.

RAP – Payment and Forgiveness Timeline

The Repayment Assistance Plan (RAP) bases your monthly payment on your income and the number of dependents in your household under age 17.

You pay according to RAP’s income brackets for 30 years (360 qualifying monthly payments).

After that, any remaining balance is forgiven. That forgiveness may be taxable.

Now here is what really matters for most physicians:

If you work for a nonprofit hospital or another qualifying 501(c)(3) employer, you may be eligible for Public Service Loan Forgiveness (PSLF).

With PSLF, your remaining balance is forgiven after 10 years of qualifying payments. This forgiveness is completely tax free.

Most physicians will not stay on RAP long enough to reach the 30 year forgiveness mark.

But PSLF offers a much shorter path and a better long-term result.

If you are pursuing PSLF, the goal is not to finish the full 30 year repayment term.

The goal is to get as much forgiven as possible in year 10, using a qualifying plan like RAP along the way.

RAP – Payment Cap

Unlike IBR and PAYE, RAP does not have a payment cap.

That means there is no ceiling on how high your monthly payment can go.

If your income increases, your RAP payment will keep rising along with it.

Let’s use an example.

Say you have $250,000 in student loans at 6% interest.

The 10-Year Standard payment would be about $2,776 per month.

Under IBR and PAYE, that’s the most you’d ever pay… even if your income jumped to $600,000.

Under RAP, there’s no such limit.

That same $600,000 income could push your monthly payment to $5,000.

For some borrowers, especially during residency or fellowship, this isn’t a concern.

The formula keeps payments low while income is modest.

But for high earners, the lack of a cap can make RAP significantly more expensive in the long run.

Use the calculator below to see how your RAP payment changes as your income grows, and compare it to capped plans like IBR and PAYE.

This will help you understand whether RAP makes sense for both your training years and your attending years.

RAP – Excludes Spouse’s Income if Filing Taxes Married Filing Separately

This is one of the biggest benefits of RAP for married borrowers.

If you file your taxes as Married Filing Separately (MFS), your spouse’s income can often be excluded from the student loan payment calculation.

This strategy can make a big difference, especially if your partner earns significantly more than you. For physicians in training, it is often the key to keeping payments low.

But here is the thing… this is not a simple yes or no decision.

Filing separately might reduce your student loan payment, but it can also increase your tax bill. The tradeoff depends on your income, your state, your family situation, and your goals.

What About Dr. Patel?

Let’s look at two scenarios.

Dr. Patel lives in North Carolina, a non-community property state. He is a resident earning $65,000 and is married to a partner earning $295,000 as an attending.

If they file jointly, his student loan payment is based on both incomes.

But if they file separately, only his income is used to calculate the payment. That can drop his monthly payment by over two thousand dollars depending on the plan.

Now imagine Dr. Patel lives in California, a community property state.

He and his spouse still file separately, but under community property rules, their adjusted gross income (AGI) is automatically split 50-50 between them for tax purposes.

That means his student loan payment will be based on half of their combined income… even though they filed taxes separately.

In this case, their household income is $360,000. That gets split evenly, so Dr. Patel’s payment will be based on $180,000.

It is still a big improvement compared to using the full household income, but not as low as it would be in a non-community property state.

This is one of the most powerful planning strategies for married physicians, but also one of the most misunderstood.

It is a legitimate way to reduce payments, but the rules are complex and often misapplied. And because your income and family situation change year to year, the strategy needs to be reviewed regularly.

If you are not sure whether to file jointly or separately, or how your state affects the math, this guide can help!

Or feel free to reach out for one-on-one help.

A Quick Note on Community Property States

If you live in one of these 9 states, community property laws apply when you file taxes separately:

• • Arizona

  • California

  • Idaho

  • Louisiana

  • Nevada

  • New Mexico

  • Texas

  • Washington

  • Wisconsin

These rules affect how income is reported on your tax return, and by extension, how your student loan payment is calculated under RAP and other IDR plans.

This type of tax planning and student loan strategy is one of the biggest reasons physicians come to us. We help you look at the full picture so you can make a smart, informed decision that works for your life… not just your loans.

RAP – Interest and Balance Growth

One big advantage of RAP is that it prevents negative amortization.

If your monthly payment doesn’t cover all the interest that accrues, the unpaid portion won’t be added to your balance.

This means your loan balance will generally stay flat during periods of low income… like residency or fellowship.

Example:

Say your loan accrues $1,000 of interest each month, but your RAP payment is $300.

Under IBR, the $700 difference would get tacked onto your balance.

Under RAP, your balance stays the same.

This feature makes RAP especially appealing for borrowers who are not pursuing PSLF but still want to avoid their balance ballooning during training.

Note: RAP also offers a small principal subsidy, up to $50/month, if your payment doesn’t fully cover the principal portion of your loan.

How Your RAP Payment Is Calculated

RAP payments are based on two things:

• • Your Adjusted Gross Income (AGI)

  • The number of dependents under age 17 in your household

The more you earn, the higher your payment. The more dependents you have, the lower your payment.

Step 1 – Find your AGI bracket:

• • AGI ≤ $10,000: Flat $120 per year ($10/month)
  • $10,001 to $20,000: 1% of AGI
  • $20,001 to $30,000: 2% of AGI
  • $30,001 to $40,000: 3% of AGI
  • $40,001 to $50,000: 4% of AGI
  • $50,001 to $60,000: 5% of AGI
  • $60,001 to $70,000: 6% of AGI
  • $70,001 to $80,000: 7% of AGI
  • $80,001 to $90,000: 8% of AGI
  • $90,001 to $100,000: 9% of AGI
  • AGI over $100,000: 10% of AGI

Step 2 – Calculate your annual payment:
Multiply your AGI by the percentage for your bracket.

Step 3 – Convert to monthly:
Divide the annual amount by 12.

Step 4 – Apply the dependent deduction:
Subtract $50 for each dependent under 17.

Step 5 – Check the minimum:
Your payment can never be less than $10/month.

RAP – How to Calculate Income

On an Income-Driven Repayment (IDR) like RAP, your monthly student loan payment is based on your income and family size.

In general:

• • Higher income = higher payment

  • Lower income = lower payment

There are two main ways your income can be calculated for an IDR plan:

Option 1: Use Your Tax Return (Adjusted Gross Income)

The most common method is to use your Adjusted Gross Income (AGI) from your prior year’s tax return. You’ll find this number on Line 11 of IRS Form 1040.

AGI includes things like:

• • Wages and self-employment income

  • Dividends and interest

  • Other sources of taxable income

Minus certain deductions like pre-tax retirement contributions and HSA contributions.

If you’re married, your household income may be included depending on how you file your taxes.

Filing separately can sometimes lower your student loan payment, but it’s not always the best move.

As mentioned earlier, the pros and cons depend on your income, your partner’s income, and which state you live in.

Option 2: Use Paystubs (Alternative Documentation of Income)

If you haven’t filed a tax return yet or your income has recently dropped, you can use your paystubs instead.

This is called Alternative Documentation of Income.

Let’s say Dr. Patel just started residency and hasn’t filed a tax return yet.

He earns $65,000 per year as a new intern.

Since he doesn’t have a tax return on file, he’ll need to submit a recent paystub when applying for RAP.

The loan servicer will then use that paystub to estimate his annual income and calculate his monthly student loan payment.

RAP – How to Determine Your Family Size

Your monthly student loan payment under the Repayment Assistance Plan (RAP) is based on two things:

• • Higher income = higher payment

  • More dependents under age 17 = lower payment

For RAP, the “family size” calculation is different from other IDR plans.

It only counts the number of dependents in your household who are under age 17.

That means:

• • You and your spouse are not included in family size for RAP.

  • Each dependent under 17 reduces your calculated monthly payment by $50.

  • The more qualifying dependents you have, the lower your RAP payment will be.

Example:

If your calculated RAP payment is $400 and you have two children under 17, your payment would drop by $100 to $300 per month.

RAP Monthly Payment Example

Dr. Patel’s Situation

• • Loan Balance: $250,000

  • Interest Rate: 6.0%

  • Income: $65,000 (first-year resident)

  • Dependents:1 child under 17

  • Plan Type: RAP

Under the 10-Year Standard Repayment Plan (the default option), Dr. Patel’s monthly payment would be $2,776 based on his loan balance and interest rate.

But as a new resident earning $65,000, that payment would be way too high.

So he looks into RAP instead.

RAP Payment Calculation:

1. Identify the bracket: $65,000 falls in the $60,001–$70,000 range → 6% of AGI.
2. Annual payment: $65,000 × 6% = $3,900.
3. Monthly payment before dependents: $3,900 ÷ 12 = $325.
4. Dependent deduction: $325 – $50 (one child under 17) = $275.

✅ Final RAP monthly payment: $275

That’s a savings of more than $2,500 per month compared to the standard plan, giving Dr. Patel breathing room during training.

Common Questions

Eligibility & Plan Access

What’s happening to repayment plans in the future?

The student loan system is changing. With new rules and new plans coming, it’s important to understand whether you’re considered a new borrower or an old borrower:

• • New borrowers: Anyone who takes out a federal student loan on or after July 1, 2026

  • Old borrowers: Anyone who took out all of their loans before July 1, 2026 and doesn’t borrow again after that date

What plans are available to new borrowers?

If you’re a new borrower, your options will be:

• • The Standard Plan, based on your loan balance and interest rate

  • The new RAP Plan, based on AGI and number of kids under 17

PAYE and IBR will no longer be available for new borrowers starting July 1, 2026.

What if I’m an old borrower?

If you don’t take out any new loans after July 1, 2026, you’ll still have access to PAYE, IBR, and the new RAP plan.

Both PAYE and IBR will be closed to new borrowers starting July 1, 2026. PAYE will also be phased out entirely by July 2028 for existing borrowers, unless they switch to IBR or RAP.

If you’re on IBR before that deadline, you can stay on it. But you won’t be able to stay on PAYE.

Plan Mechanics

Does IDR work for PSLF?

Yes. RAP, IBR, and PAYE are all eligible repayment plans for Public Service Loan Forgiveness (PSLF). If you work for a nonprofit hospital, university, or health system, this is likely the route you want to be on.

Which IDR plan should I pick?

It depends on your income, loan type, family situation, and long-term goals. The calculator above is a great starting point.

But if you want to get it right and avoid costly mistakes, let’s talk. We can build a custom game plan together.

If I’m married, does my partner’s income affect my payment?

Yes. If you file taxes jointly, your partner’s AGI is included in the income calculation.

For PAYE and IBR, your partner is also part of your family size.

Some physicians choose to file taxes separately to exclude their partner’s income.

That can lower your student loan payment… but it may increase your tax bill.

Not a decision to make lightly.

If you’re in this boat, let’s talk it through.

RAP vs IBR – What’s the Difference

What’s so great about RAP?

RAP includes one major benefit: no negative amortization.

If your payment doesn’t fully cover your monthly interest, your loan balance won’t grow.

Let’s say you owe $250,000 at 6% interest. Your 10-Year Standard payment is $2,776, but as a resident earning $60,000, your RAP payment might only be $250. Under PAYE or IBR, the difference would be added to your balance. Under RAP, your balance stays flat.

Important: If you’re pursuing PSLF, it doesn’t matter how big your loan balance gets… it’ll be forgiven tax-free after 120 payments. So don’t pick RAP just to avoid balance growth if PSLF is your goal.

But if you’re not going for PSLF?

RAP can be a great fit during training. It keeps your low without ballooning your balance — giving you less to pay off once you’re making attending income.

Sounds great. What’s the catch?

RAP doesn’t have a payment cap.

IBR and PAYE both cap your payment at the Standard Plan amount (around $2,776/month).

But RAP has no ceiling… if your income goes up, your payment can too.

Example:

If your income rises to $600,000, your RAP payment might exceed $5,000/month.

That could make RAP more expensive long-term, especially for high earners after training.

Want Help With Your Student Loans?

Need a second set of eyes on your plan?

If you’re unsure which repayment strategy makes the most sense, I can help.

For $299, you’ll get a one on one session with a student loan pro (hi, that’s me — Michael Putterman, CFP®) and a and a custom repayment strategy that fits your life, not just your loans.

✅ Review your options
✅ Build a clear game plan
✅ Avoid the most expensive mistakes

Disclosure: This content is for informational purposes only and does not constitute personalized financial, tax, or student loan advice. Student loan programs and repayment rules change frequently, and while I strive to keep this page up to date, I can’t guarantee accuracy at all times. Please consult your tax or financial professional for guidance specific to your situation.