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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>Deborah KearnsSun, March 1, 2026 at 11:00 AM GMT+1 5 min readMillions of federal student loan borrowers are about to see a major change to how their monthly payments are calculated. The Trump administration’s “One Big Beautiful Bill Act” (OBBB) introduced the Repayment Assistance Plan, or RAP — a new income-driven repayment (IDR) option that replaces most of the existing plans federal student loan borrowers use.However, financial aid experts caution that RAP will likely make many borrowers’ payments unaffordable due to how it calculates repayment. This could add even more strain to a system already under pressure.As of the fourth quarter of 2025, 9.6% of all federal student loans were seriously delinquent (90 days or more late), according to the latest Household Credit and Debt Report from the Federal Reserve Bank of New York. The flow rate of accounts moving into that stage has accelerated over the past year, from just 0.70% at the end of 2024 to a high of 16.2% by the end of 2025, the report found.Here's a look at how the new plan works and what borrowers need to know before it goes into effect on July 1.RAP’s payment formula is more straightforward than previous plans, said Jack Wang, a college financial aid advisor at Innovative Advisory Group and host of the Smart College Buyer podcast.The new plan calculates payments as a percentage of a borrower’s adjusted gross income (AGI) on a sliding scale from 1% to 10% in increments of $10,000. The percentage is capped at 10% for AGIs above $100,000.Here are the other key features of RAP:Required minimum monthly payment of $10 for AGIs under $10,000 (even if you earn zero income)$50 per month deduction per dependentLoan term of 30 years (compared to 10 to 25 years for existing IDR plans)Longer repayment period means fewer borrowers will benefit from forgivenessInterest subsidy for unpaid monthly interest even if your loan is in negative amortizationAny balance forgiven at the end of repayment will count as taxable incomeApplies only to Direct Student Loans (Parent PLUS loans are not eligible)Current IDR plans — income-based repayment (IBR), income-contingent repayment (ICR), Pay As You Earn (PAYE) and Saving on a Valuable Education (SAVE) plan — protect a portion of borrowers’ income before calculating monthly payments. This reserves some earnings (tied to the federal poverty level) to cover basic needs like housing and food.However, RAP doesn’t offer that safeguard. And although the formula is simpler, the new plan will likely hike student loan payments for millions of borrowers, said Michele Zampini, associate vice president of federal policy and advocacy at the Institute for College Access and Success (TICAS).Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,871.93 -6.95 (-0.10%)Dow 3048,851.33 -126.59 (-0.26%)Nasdaq22,710.17 +41.96 (+0.19%)Russell 20002,648.16 +15.80 (+0.60%)VIX21.23 +1.37 (+6.89%)Gold5,328.30 +80.40 (+1.53%)Trending tickersBRK-B Berkshire Hathaway Inc. 478.16 -26.79 (-5.31%)BTC-USD Bitcoin USD 68,848.56 +2,505.59 (+3.78%)AVAV AeroVironment, Inc. 199.51 -52.74 (-20.89%)F Ford Motor Company 13.28 -0.82 (-5.78%)LMT Lockheed Martin Corporation 669.50 +14.87 (+2.27%)PortfolioSign in to access your portfolioSign inTop gainersEMAT Evolution Metals & Technologies Corp. 10.48 +2.51 (+31.49%)AAOI Applied Optoelectronics, Inc. 102.33 +18.10 (+21.49%)AXTI AXT, Inc. 45.11 +7.21 (+19.02%)RCUS Arcus Biosciences, Inc. 24.28 +3.91 (+19.19%)OCUL Ocular Therapeutix, Inc. 10.61 +1.67 (+18.68%)Top losersAVAV AeroVironment, Inc. 199.62 -52.63 (-20.87%)TPB Turning Point Brands, Inc. 112.48 -24.51 (-17.89%)AES The AES Corporation 14.29 -2.99 (-17.30%)ADT ADT Inc. 7.06 -0.96 (-11.96%)NCLH Norwegian Cruise Line Holdings Ltd. 22.14 -2.65 (-10.69%)Most activeONDS Ondas Inc. 10.68 +0.60 (+5.90%)NVDA NVIDIA Corporation 182.15 +4.96 (+2.80%)NOK Nokia Oyj 8.24 +0.51 (+6.67%)F Ford Motor Company 13.27 -0.82 (-5.85%)PLUG Plug Power Inc. 1.7950 +0.0050 (+0.28%)Top economic eventsEarnings eventsMy earnings eventsEarnings events