EPISODE RESOURCES

Download the updated IDR Guide!

Repayment Assistance Plan (RAP) Explained: Eligibility, Payment Calculation, Subsidies, and Who Should Use It

The episode breaks down the forthcoming Repayment Assistance Plan (RAP)! We dig into all the details ranging from who's eligible for RAP, to how Discretionary Income and protected income are thrown out the window when it comes to calculating payments. We cover scenarios where RAP saves money as compared to other options, and how to determine whether it's worth paying 5 to 10 years longer on RAP as compared to more conventional plans like IBR and PAYE.

Check it out!

00:00 RAP Overview
02:00 New IDR Deadlines
03:35 Guide Walkthrough
04:05 Eligibility Basics
04:35 No Protected Income
06:02 Payment Formula
08:00 Income Cliffs
09:24 Dependent Discount
09:57 No Hardship Cap
11:17 Interest Subsidy
15:08 30 Year Forgiveness
15:48 Married Filing Separately
16:27 Who Should Use RAP
17:39 Low Income Example
19:20 High Income Example
21:53 Mega Borrower Tax Bomb
27:27 Final Recommendations
28:10 Wrap Up

EPISODE RESOURCES

SAVE Plan Cancellation Press Release

SAVE Plan Timeline Press Release

Parent Plus Loan D-Day, Disallowed Student Loan Guidelines and Details on the Immediate Future of the SAVE Plan

In this episode, we go through EXTREMELY important details on the future of Parent Plus Loans, and why many borrowers need to take action by April 1st in order to preserve eligibility for student loan forgiveness. These borrowers must have a newly consolidated loan disbursed by July 1st to maintain eligibility, and all parents should be wary of borrowing any new Parent Plus Loans after that time. We also cover certain student loan guidelines from the Biden era that have been disallowed, including, crucially, the ability to consolidate federal loans without resetting your credit towards forgiveness. Lastly, for borrowers on the SAVE plan, we have details on the 90 day timeline borrowers will have to move to a new Income Driven Repayment plan or risk being placed on a (likely significantly higher) Standard Plan. Tune in for details!

SAVE Plan Dissolved, April 1 Deadlines, and Growing IDR/PSLF Backlogs

This episode shares several student loan updates, led by a higher court directing a lower court to honor a settlement dissolving the SAVE plan, with no timeline yet for moving SAVE borrowers into other repayment options and speculation ranging from IBR to the standard plan.

We also cover the importance of Parent PLUS borrowers potentially losing access to IDR and PSLF for new loans after July 1 , and why April 1 is the practical deadline for consolidating loans.

A similar urgency applies to borrowers needing Direct Loans (not FFEL/Stafford) for PSLF or certain plans, with consolidation needed by June 30.

The Department Of Education reports an IDR application backlog of over 560,000 and PSLF buyback backlog around 88,000.

Lastly we discuss private loans, and the potential impact of the Fed's likely refusal to continue lowering interest rates.

00:00 Save Plan Ends
01:15 Transition Uncertainty
02:30 Parent PLUS Deadline
04:55 Direct Loan Consolidation
06:02 IDR Backlog Update
07:59 PSLF Buyback Delays
09:30 IDR Forgiveness Restart
10:46 Refinancing Rate Outlook
12:03 Wrap Up Next Steps