How does the Repayment Assistance Plan (RAP) calculate monthly obligations?

RAP calculates monthly payments by taking 10% of discretionary income above 225% of the applicable HHS Poverty Guideline for your household size and location, divided by 12.

How does the RAP 100% interest subsidy prevent negative amortization?

If your calculated RAP payment is lower than monthly accrued interest, the Department of Education subsidizes 100% of the difference. Unpaid interest does not accumulate or capitalize.

How does the statutory 10-year Standard Repayment cap protect IBR and PAYE borrowers?

Under HEA Section 493C and 34 CFR 685.221, monthly obligations under IBR and PAYE can never exceed the amount required under the original 10-year Standard Repayment plan, regardless of income growth.

Income-Contingent Repayment (ICR) Formula Tool

Model the lesser of 20% discretionary income or 12-year income-adjusted payments.

Federal Student Loan Repayment & RAP Comparison Calculator

Deterministic Title IV repayment model comparing RAP, IBR, PAYE, ICR, and Tiered Standard.

Borrower Inputs

Total Federal Loan Balance ($)

Adjusted Gross Income (AGI) ($)

Weighted Average Interest Rate (%)

Household Family Size

Geographic Poverty Guideline Region

Monthly Repayment Obligations

RAP Monthly Payment

$0.00

IBR Monthly Payment (Capped)

$0.00

PAYE Monthly Payment

$0.00

ICR Monthly Payment

$0.00

Tiered Standard Monthly Payment

$0.00

Standard 10-Year Payment (Cap Baseline)

$0.00

RAP Monthly Interest Subsidy

$0.00

Key Statutory Rule Summary (Title IV)

Under Title IV 34 CFR Part 685, the Repayment Assistance Plan (RAP) establishes monthly obligations at ten percent of discretionary income exceeding 225 percent of the HHS Poverty Guideline. RAP automatically waives all unpaid monthly interest through statutory subsidies, preventing negative amortization across undergraduate and graduate balances.

Income-Contingent Repayment: Dual Formula Evaluation for Parent PLUS Borrowers

Income-Contingent Repayment (ICR) calculates monthly liabilities through two distinct statutory equations, enforcing the lesser result. Formula A assesses twenty percent of discretionary income above one hundred percent of the poverty guideline. Formula B calculates a twelve-year amortized payment multiplied by an income percentage factor.

Historically, ICR represented the sole income-driven pathway accessible to consolidated Parent PLUS loans. While newer plans exclude direct Parent PLUS consolidation, ICR remains an indispensable statutory option for parents seeking income-adjusted monthly obligations.

Forgiveness under ICR mandates a twenty-five year repayment commitment (three hundred qualifying monthly payments), making accurate lifetime cost modeling critical for mature borrowers nearing retirement age.

Statutory Authority & Provenance Citations

Dataset 1: US Department of Education Title IV Repayment Regulations (34 CFR Part 685)
Dataset 2: US Department of Health and Human Services Annual Poverty Guidelines (42 U.S.C. 9902(2))

Cryptographic SHA-256 provenance hashes verify mathematical fidelity across all federal calculations.

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