UNITED STATES - APRIL 29: Chairman Rep. Tim Walberg, R-Mich. gavels the House Educaiton Committee to ... More order for the markup of the Fiscal 2025 Budget Resolution on Tuesday, April 29, 2025. (Bill Clark/CQ-Roll Call, Inc via Getty Images)

Republican lawmakers have proposed a massive overhaul of the student loan system, both in how families will pay for college, and how borrowers will repay their student loans.

The key student loan repayment proposal involves reducing the number of repayment plan options to two: a standard fully amortized plan and an income-based repayment plan dubbed the Repayment Assistance Plan.

Designed with a flat income-percentage model and child-based deductions, RAP would replace existing income-driven repayment plans for new borrowers. The legislation also phases out forgiveness after 20 or 25 years for a 30-year timeline, with interest and principal subsidies to prevent runaway balances.

However, in side-by-side comparisons, RAP often leads to higher total payments, especially for low-income borrowers. While the SAVE plan is likely dead due to court injunctions, it would have offered lower monthly bills and faster forgiveness, particularly for those with smaller loans or incomes near the poverty line.

Even compared to the existing IBR Plan, the RAP is not a compelling alternative for these borrowers.

It’s important note that the RAP Plan, and the new standard repayment plan, would only go into effect for loans originated after July 1, 2026. So, existing borrowers would likely keep their plans, with the exception of those in SAVE — who will likely have to choose an eligible repayment plan when the forbearance is over.

It’s also important to note that this is just the main proposal right now. This could change before it’s signed into law.

Here’s a look at how the RAP compares.

There........

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