Trying to help my grandson here.
He is one semester away from receiving undergrad, but is coming up 3500.00 short for the semester. He is 21 and would start his last semester in the Fall of 2026 and graduate in December 2026
I plugged into the RAP calculator that if he takes out a student loan for 3500.00 based on 20,000 income last year,(He files single) it says his payment would be 17.00
But, in other info, it says RAP payment is 10% of agi divided by 12? Which would be a much higher payment?
Does anyone know the correct info?
Posted by shep2105
3 Comments
RAP is 10% only for incomes over $100k.
For $20K AGI i think it would be 2%?
If you can get AGI below $20k (even $1) it would be 1% i think
2% for income between $20,000.01 and $30,000. https://www.fidelity.com/learning-center/personal-finance/repayment-assistance-plan
RAP it caps at 10% and for $20,000 in tax year 2025 and such a small loan, it would likely be 2-3% and under $25/mo. You should counsel him to pay more than that, though, for faster payoff and to avoid interest accumulation.
Edited for accuracy; apparently RAP will use AGI just not the discretionary income calculation.