by The Institute for College Access and Success (TICAS) is sounding the alarm over a new federal student loan repayment option set to roll out under the Trump administration in the coming months.
The Repayment Assistance Plan (RAP), introduced under the “Big Beautiful Bill” signed into law last month, will replace several existing income-driven repayment (IDR) plans by 2028. Education Secretary Linda McMahon announced the change, framing RAP as a streamlined alternative for borrowers.
Why It Matters
Under the new regulations, three popular IDR plans — Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE) — will be phased out by July 2028. Borrowers consolidating their federal direct loans after July 1, 2026, will have only two options: RAP or the standard repayment plan.
While RAP bases payments on income and offers eventual loan forgiveness, TICAS warns the plan could leave many borrowers worse off compared to older programs.
Key Differences in RAP
- Higher Monthly Payments: Payment amounts increase with every $10,000 in additional income earned, capped at $100,000.
- Minimum Payment Requirement: Even borrowers with no income must make a monthly payment.
- Reduced Household Considerations: Only a $50 monthly payment reduction is given per dependent child, unlike older plans that fully factored in household size.
- Longer Forgiveness Timeline: Borrowers must make payments for 30 years before qualifying for loan forgiveness, compared to 20–25 years under previous plans.
- No Income Protection: Unlike older IDR plans, RAP does not shield a portion of income to help borrowers cover basic living expenses while repaying loans.
TICAS argues these changes could increase default rates and place greater financial strain on borrowers, particularly those with low or fluctuating incomes.
What Happens Next
With ICR, PAYE, and SAVE being eliminated, millions of borrowers will need to choose a new repayment plan by July 2028. While RAP may still be more affordable than Income-Based Repayment (IBR) for some, borrower advocates caution against enrolling without fully understanding the long-term costs.
“These are the kinds of pro-business policies you get when the people crafting the legislation have a business mindset,” said Thompson, a critic of the plan. “They see people as one thing and one thing only: inputs to the labor force.”
