Millions of federal student loan borrowers are entering a new repayment era. After years of uncertainty (payment pauses, injunctions, administrative forbearances, and changing policy) the United States is preparing to consolidate repayment options, ending multiple plans (including SAVE, PAYE, and ICR) and replacing them with the Repayment Assistance Plan, or RAP.

The challenge is that many borrowers are still fixated on their old payments from 2022 or 2023 and are concerned about what the cost will be in 2025 or 2026.

During SAVE’s administrative forbearance, payments were $0 and before that , they were based on older income data from as early as 2019. That anchoring has left many borrowers with expectations that no longer match current options. Interest has resumed, SAVE is no longer accepting new enrollees, and for new borrowers in 2026, RAP will be the only income-based option.

RAP has many perks, but the transition isn’t simple. Understanding how RAP compares with SAVE, PAYE, and IBR can help borrowers plan for the next several years.

What The New RAP Plan Offers

RAP will become the main income-driven repayment plan for future borrowers and, in time, for most existing ones. It retains some concepts from SAVE but is structured more conservatively.

Key Features:

• Income-based payments with a floor: Payments will depend on income, but borrowers will pay at least $10 a month. This removes the “zero-payment” feature that existed under past IDR plans.
• Unpaid interest subsidy: If a borrower’s payment doesn’t cover interest, the government covers the unpaid amount. Balances will not balloon simply because payments are low.
• Up to $50 monthly principal reduction: If a low payment still doesn’t touch principal, RAP can reduce principal by up to $50 each month. This prevents balances from sitting stagnant for years.
• Forgiveness after 30 years: This is longer than the 20- or 25-year timelines in older IDR plans, extending repayment for many households.

RAP’s design favors stability for borrowers with low or inconsistent income. When comparing RAP to IBR directly, RAP is typically better for borrowers making less than $100,000 per year.

How PAYE, ICR, and IBR Fit In The Picture

PAYE and ICR are being sunset for future borrowers and will eventually end. The current timeline when expect based on sources at the student loan servicers is that PAYE and ICR will cease enrollment in late 2027 or early 2028.

IBR remains available for older loans but will be unavailable for new student loans after July 1, 2026.

IBR keeps the traditional structure of 10-15% of discretionary income with 20-25-year forgiveness. For existing borrowers, IBR may remain a sensible alternative.

Anchoring Problem: Borrowers Fixate On Outdated SAVE Payments

Based on the hundreds of comments on our TikTok videos, a lot of borrowers are frustrated by their future payment options.

Many borrowers compare RAP or IBR projections to their old SAVE payments, often calculated using 2021 or 2022 income data. During the SAVE forbearance, borrowers essentially “froze” their sense of what a student loan payment should be.

This anchoring is understandable. But it can create financial whiplash:

• Monthly payments recalculated on current income may be significantly higher.
• Unpaid interest is growing again, which surprises borrowers who didn't know the interest paused ended, but the payment pause hasn't
• Months spent in administrative forbearance do not count toward IDR forgiveness or PSLF.

Many borrowers in the SAVE forbearance thinking about PSLF buyback are also misinformed about how the buyback will be calculated. They assume they will benefit from a SAVE payment, but the truth is they will get a REPAYE calculation for 12 months, then the current time spent in forbearance will be based on IBR or PAYE.

Who May Benefit From RAP (And Who May Not)

RAP is not automatically better or worse than SAVE or IBR and the right choice depends on the borrower’s situation.

RAP may benefit:

• Borrowers with low income or unstable employment.
• Borrowers with large balances who expect decades of slow progress. This can also help minimize a potential future tax bomb.

RAP may be less effective for:

• Borrowers who could reach forgiveness faster under IBR (20-25 years).
• Borrowers with higher or rising income who want to minimize total repayment cost.
• Borrowers pursuing PSLF, where payment amounts matter — though PSLF qualifies under RAP, lower payments under IBR are more beneficial.

Because RAP extends repayment to 30 years, borrowers with stable or increasing income may pay more over time.

Comparison Table: RAP vs. SAVE vs. PAYE vs. IBR

Key Takeaways For Borrowers

Right now, borrowers in the SAVE forbearance need to plan what their future payment would be in IBR or RAP. The student loan environment of 2020-2023 is gone, and relying on old numbers simply skews the future picture. Borrowers should evaluate their options with current income, up-to-date program rules, and realistic expectations.

RAP may be better for those with low incomes. especially with it's interest subsidy and principal reduction program. But its longer repayment timeline may not suit everyone. Borrowers who want faster forgiveness or who expect their earnings to rise should compare options carefully, especially while IBR remains available for pre-2026 loans.

The most important step now is to update assumptions and make a plan. Payments from two years ago are no longer a reliable benchmark.

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