Step 4 of 8
Step 4: How your salary becomes a RAP payment
RAP charges 1% to 10% of your whole AGI, with a $10 monthly minimum. Here's where your numbers land.
What you need to know
The Repayment Assistance Plan (RAP) started July 1, 2026. Your AGI picks a bracket — 1% between $10,000 and $20,000, rising one point per $10,000, up to 10% above $100,000 — and that percentage applies to your entire AGI, not just the part above the line. Then $50 a month comes off for each dependent.
If your payment doesn't cover the month's interest, the rest of the interest is waived, and the government adds a principal match so your balance drops by at least what you paid, up to $50. After 360 qualifying payments (30 years) what's left is forgiven — and that forgiveness is taxable.
Because the percentage applies to all of your AGI, pre-tax savings matter twice: above $100,000 every $1,000 you put in a 401(k) or HSA cuts your RAP payment by about $8.33 a month.
Sitting just above a bracket line? A little more pre-tax saving can drop your whole payment by a full percentage point.
Salary → AGI → your RAP payment
Income-driven payments use adjusted gross income — what's left after pre-tax contributions, before taxes. Lower AGI, lower payment.
Salary
$180,000
− Pre-tax contributions
$13,000
= AGI
$167,000
RAP: 10% of AGI
$1,392/mo
Levers that lower your RAP payment (full-salary year)
| Move | New AGI | RAP / mo | Saves / mo |
|---|---|---|---|
| Max 401(k)/403(b) ($24,500) | $152,500 | $1,271 | $121 |
| Max HSA ($4,400) — needs an HSA-eligible plan | $162,600 | $1,355 | $37 |
| Both | $148,100 | $1,234 | $158 |
Above $100k AGI every $1,000 of pre-tax savings cuts RAP by about $8.33/mo. If you're chasing forgiveness (PSLF or IDR), that's money you never pay back. If you're paying it off, it just lowers your required minimum.
Estimates only — not financial, tax, or legal advice. Rules reflect the One Big Beautiful Bill Act as implemented by the Department of Education (last reviewed September 2026). Confirm with your servicer, StudentAid.gov, and a CPA or planner who works with dentists.