Core Viewpoint - The introduction of the Repayment Assistance Plan (RAP) under the "One Big Beautiful Bill Act" is set to significantly change how federal student loan borrowers calculate their monthly payments, potentially leading to higher payments for many borrowers [1][5]. Group 1: Overview of RAP - RAP replaces most existing income-driven repayment (IDR) plans for federal student loan borrowers [1]. - The payment formula under RAP is based on a borrower's adjusted gross income (AGI), ranging from 1% to 10%, with a cap of 10% for AGIs above $100,000 [4]. - Unlike previous IDR plans, RAP does not protect a portion of borrowers' income before calculating payments, which may lead to increased financial strain [5]. Group 2: Financial Implications - As of Q4 2025, 9.6% of federal student loans were seriously delinquent, with a notable increase in the flow rate of accounts moving into delinquency [3]. - The required minimum monthly payment under RAP is $10 for AGIs under $10,000, and $50 per month deduction is allowed per dependent [6]. - The loan term under RAP is extended to 30 years, which may reduce the number of borrowers benefiting from loan forgiveness [6]. Group 3: Additional Features and Considerations - RAP includes an interest subsidy for unpaid monthly interest, even if the loan is in negative amortization [6]. - Any balance forgiven at the end of the repayment period will be considered taxable income [6]. - RAP applies only to Direct Student Loans, excluding Parent PLUS loans from eligibility [6].