Thousands of borrowers have applied to enroll their student loans in the Repayment Assistance Plan, or RAP, a new income-driven repayment option that launched on Wednesday. Nearly 50,000 borrowers had applied to RAP within the first 24 hours of the program’s debut, said Education Department officials.

“@usedgov launched the new income-driven Repayment Assistance Plan today, and nearly 46,000 borrowers have already submitted an application to enroll!” said Under Secretary of Education Nicholas Kent in a statement on X on Wednesday. Kent encouraged borrowers with eligible federal student loans to "switch plans today!”

The launch of RAP is one of several major changes to federal student loan programs that the Trump administration began implementing on July 1. But while the Education Department continues to tout the benefits of RAP, advocacy groups are urging borrowers to carefully consider the potential benefits and drawbacks of the new repayment plan option before enrolling. Here’s what borrowers should know.

Repayment Assistance Plan For Federal Student Loans Launches This Week

RAP is an income-driven repayment plan available for federal Direct student loans. Like all prior IDR plans, monthly payments are based on the borrower’s income (usually their Adjusted Gross Income, or AGI, as reported on their federal tax return), with some adjustments made for family size. After many years in repayment, any remaining balance can become eligible for student loan forgiveness.

“Your required monthly payment amount under RAP is a percentage of your annual income, most commonly your adjusted gross income (AGI), divided by 12 to determine the monthly payment amount,” explained the Education Department in online guidance updated in advance of the launch of the new program. “Your monthly payment amount is then reduced by $50 for each dependent you claim on your federal tax return; however, your monthly payment may not be less than $10 a month.”

Republican lawmakers authorized the creation of RAP in the One Big, Beautiful Bill Act that Congress passed last summer. RAP is intended to be a........

© Forbes