Education Department Pushes 30-Year Student Loan RAP as July 1 Overhaul Nears
Updated
Updated · Forbes · Jun 17
Education Department Pushes 30-Year Student Loan RAP as July 1 Overhaul Nears
3 articles · Updated · Forbes · Jun 17
Summary
July 1 changes are driving a new Education Department campaign to steer millions of federal borrowers into the Repayment Assistance Plan, which it says will cap balance growth and reward on-time payments.
RAP can still raise monthly bills for borrowers leaving SAVE and other fading plans: a single borrower with two dependents earning $75,000 would pay $340 a month under RAP, versus $125 on SAVE and $290 on PAYE.
30 years of qualifying payments are required before RAP forgiveness, longer than PAYE’s 20 years and most other income-driven plans’ 20 to 25 years; payments made under RAP also would not count toward forgiveness if a borrower later switches plans.
On-time payment incentives come with strict conditions: unpaid interest is waived only on full, timely payments, and the principal match is capped at $50; late, partial or extra payments can reduce or erase those benefits.