Payment amounts: 1-10% of your annual adjusted gross income (AGI); percentage is based on earning level. Payment reduced by $50 for each dependent claimed on your tax return. The plan offers $10 flat payments for those earning $10,000 per year or less.
Interest subsidy: If the RAP payment amount is less than the monthly interest that accrues on the loan, the remaining unpaid interest is not charged.
Matching principal payment: If the RAP monthly payment doesn’t reduce the principal balance by at least $50, a subsidy is applied to ensure the principal balance is reduced by at least $50 each month.
So I am reading correctly is it similar to SAVE in that the monthly interest on the loans won't increase? If my payment is lower than what the interest would be?
Repayment Assistance Plan (RAP) does it mean the interest won't accure like the SAVE plan? Is it the best plan to get onto?
byu/99RedBalloon inStudentLoans
Posted by 99RedBalloon
3 Comments
That is correct
The principal subsidy is up to $50/mo. If your required payment is less than $50 (and none of it touches principal) then the ED would only match your payment.
How about someone making 115k with 250k loan with 7% interest?