June 21, 2026 • 10 min read

RAP's $10 Minimum Payment: What Borrowers With $0 SAVE or IBR Bills Need to Know Before July 1, 2026

For more than a decade, very low-income borrowers on income-driven plans could see a calculated monthly payment of exactly zero dollars — and have those $0 months still count toward PSLF and long-term forgiveness. That floor is going away. When the Repayment Assistance Plan opens for enrollment on July 1, 2026, every RAP borrower owes at least $10 a month, no exceptions. Here is who the change actually hits, why it does not necessarily mean a higher bill, and what to do in the 10 days before the deadline window starts.

There is a small line in the new Repayment Assistance Plan rules that does not get nearly the attention the headline RAP changes do: the minimum monthly payment is $10. Not zero, not waived for very low income, not adjusted for the poverty line. Ten dollars. For roughly 7.5 million borrowers transitioning out of the SAVE plan in the coming months, and for any future borrower who takes out a federal loan on or after July 1, 2026, that floor is the first time in years that an income-driven plan has come without a true $0 option.

Ten dollars is not a lot of money — but the change is bigger than the number suggests. It alters the math for unemployed borrowers, for graduate students with part-time income, for stay-at-home parents, and for anyone whose adjusted gross income falls below the poverty thresholds that have historically zeroed out an income-driven bill. Today's guide walks through who is actually affected, what the bill looks like at different income levels, why IBR is still in the picture for some people, and the three concrete decisions to make before the SAVE transition notices land starting July 1.

Where the $0 Payment Came From and Why It Is Disappearing

Older income-driven plans — IBR, PAYE, ICR, and the now-discontinued SAVE plan — all computed your monthly bill from discretionary income. Discretionary income is the gap between your adjusted gross income and a multiple of the federal poverty line for your household size, generally 150% of poverty for IBR. If your AGI sat below that threshold, your "discretionary" income was zero, your calculated payment was zero, and your $0 months counted toward forgiveness just like any other on-time payment.

That safety valve was the practical answer to unemployment, low-wage work, graduate school, parental leave, and a long list of life situations where a real payment would be impossible. It is also a big part of the reason SAVE produced so many headlines: a substantial share of SAVE borrowers had a $0 payment because their AGI fell at or below the program's larger income protection.

RAP replaces that approach entirely. Instead of carving out a discretionary-income slice, RAP applies an income-tiered percentage to your full AGI — and sets a hard floor of $10. The cleanest way to think about it: the old plans started at $0 and worked up; RAP starts at $10 and works up.

The RAP Payment Formula at Each Income Tier

RAP's payment math is simpler than the old discretionary-income formulas. Take your AGI, find your bracket, multiply by the bracket's percentage, divide by 12, and subtract $50 for each dependent you claim on your federal tax return. The result is your monthly bill, with a floor of $10.

Annual AGI RAP rate Base monthly payment With 2 dependents
$0 – $10,000 Flat minimum $10 $10 (floor)
$10,001 – $20,000 1% of AGI ~$17 $10 (floor)
$20,001 – $30,000 2% of AGI ~$50 ~$10
$30,001 – $40,000 3% of AGI ~$100 ~$50
$40,001 – $50,000 4% of AGI ~$167 ~$117
$50,001 – $60,000 5% of AGI ~$250 ~$200
$60,001 – $100,000 6% – 9% (rises 1pt per $10k) ~$350 – ~$750 ~$300 – ~$700
$100,001+ 10% of AGI ~$833+ ~$783+

Rounded for illustration. Exact RAP payments depend on your servicer's calculation and the final Department of Education methodology. Run your own numbers with our RAP calculator.

The pattern is what matters: at the very bottom of the income range, RAP is more expensive than IBR (because of the $10 floor); through the middle of the range, it is competitive or cheaper; and at higher incomes it can be more expensive than IBR because it taxes full AGI rather than just the slice above the poverty line. If you want a side-by-side estimate for your own AGI and family size, our RAP calculator handles the math in seconds.

Who Is Actually Affected by the End of the $0 Payment?

Not every borrower with a low income today is automatically caught by the $10 minimum. Three specific groups need to think this through carefully.

1. SAVE borrowers who currently pay $0. Roughly a third of SAVE enrollees have a $0 monthly bill, mostly because their AGI sat below SAVE's poverty-line protection. When their 90-day transition notice arrives sometime between July 1, 2026 and early 2027, they will be asked to pick a new plan. If they choose RAP, the bill becomes at least $10. If they choose IBR — which they are still eligible to enroll in — the $0 bill can continue while their income stays below the IBR threshold.

2. Borrowers whose loans are first disbursed on or after July 1, 2026. For this group, RAP is the only income-driven repayment plan that exists. There is no IBR option, and therefore no $0 calculated payment. A graduate student starting in fall 2026, for example, will enter repayment with the $10 minimum as the lowest possible income-driven bill they will ever see.

3. Borrowers cycling in and out of low-income periods. Anyone whose income fluctuates — gig workers, seasonal employees, returning students, parents taking unpaid leave — previously had a built-in safety valve in $0 IDR months. On RAP, the bill simply floors at $10. That is still a survivable payment for most people, but the symbolism matters: there is no longer a plan that legally says, "this month, your income is so low you owe nothing."

RAP vs. IBR for Low-Income Borrowers in 2026

For SAVE borrowers with the option to choose between the two, the decision usually comes down to a single question: do you need the ability to drop back to $0 when income falls? If yes, IBR is still the safer pick. If no — or if you expect to be comfortably above the poverty line going forward — RAP's interest waiver and $50 principal match can make it the better long-term plan, even with the $10 floor.

Feature IBR (still available to existing borrowers) RAP (new July 1, 2026)
Minimum monthly payment $0 when income low enough $10 floor, always
Income measure Discretionary (AGI minus 150% of poverty) Full AGI, tiered 1%–10%
Unpaid interest each month Can capitalize on balance Waived if paid on time
Principal-matching contribution None Up to $50/month when on-time
Forgiveness timeline 20 or 25 years 30 years
Counts for PSLF Yes Yes

For a deeper side-by-side, see our plan comparison tool.

Two practical notes that matter here. First, IBR's $0 option is only on the table for borrowers whose loans were first disbursed before July 1, 2026 and who do not take out new federal loans after that date. Second, switching from RAP back to IBR later can cost you: RAP payments do not automatically transfer as qualifying months on IBR's forgiveness clock if you swap plans, so plan choice today affects more than this month's bill. Our deep dive on why RAP credits do not transfer back to IBR walks through the trap in detail.

What the $10 Minimum Means for PSLF Borrowers

The good news for borrowers pursuing Public Service Loan Forgiveness is that RAP is a qualifying plan. Every on-time RAP payment — including the $10 minimum — counts as one of the 120 payments required for PSLF, the same as a $0 IBR payment did under the old rules. So a public-service borrower with very low income today does not lose access to PSLF; they simply pay $120 per year on the way to forgiveness instead of nothing.

The strategic question is timing. Some PSLF borrowers may want to enroll in IBR now to lock in the $0 floor and start banking qualifying months before any income increases push them into a higher RAP tier. Others may prefer RAP from day one to capture the interest waiver and $50 match. If you are unsure, the PSLF tracker helps you model both paths and our piece on whether RAP counts toward PSLF covers the qualifying-payment rules in full.

What To Do in the 10 Days Before July 1

SAVE transition notices begin going out July 1 in waves over several months. You do not have to wait for yours to act — in fact, the people who lock in their decision first will avoid the predictable crush on servicer phone lines through July and August. Three concrete steps in the next 10 days:

A Quick Worked Example

Maya is a part-time community college student working 20 hours a week at a coffee shop. Her AGI last year was $8,400 and she claims no dependents. On SAVE, her calculated payment was $0 because her income sat below SAVE's poverty protection.

Under RAP, her bill is the $10 minimum — $120 a year, plus the interest waiver and the $50 principal match each month she pays on time. Under IBR, her calculated payment is still $0 because she is below 150% of the federal poverty line for a household of one. For Maya, IBR is the cheaper monthly bill, but RAP would put $50 a month toward her principal that IBR does not. If she expects her income to climb after she graduates, locking in IBR now and switching to RAP later sounds appealing — but as our deeper article on RAP-to-IBR credit transfer shows, that move forfeits her RAP forgiveness months. There is no single right answer; the right answer depends on whether her priority is the lowest possible bill this year or the most aggressive principal reduction.

Bottom Line

The $10 RAP minimum is not the disaster some headlines have made it out to be — $120 a year is a survivable payment for almost any working borrower, and the interest waiver plus $50 principal match more than offset it for many. But it is a real change. The era of the $0 income-driven payment for low-income borrowers ends for new loans on July 1, 2026, and for everyone else as soon as you actively switch into RAP. If your income today is well below the poverty line and you expect it to stay there for a while, IBR is still the cheaper monthly bill while it remains available. If your income is solidly above poverty, RAP is usually the more borrower-friendly long-term plan thanks to the waivers and match. Either way, the worst outcome is doing nothing and getting bounced into Standard Repayment in October; ten minutes on StudentAid.gov in the next ten days protects you from that.

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This article is for informational purposes only and is not financial or legal advice. The RAP $10 minimum payment, the income-tier formula, and the SAVE transition timeline come from the FY2025 reconciliation law (P.L. 119-21) and U.S. Department of Education guidance available through June 21, 2026; final regulatory mechanics may evolve. Always confirm current terms with StudentAid.gov or your federal loan servicer before making a plan change. Data current as of June 21, 2026.