RAP and PSLF: Does the New Plan Count for Public Service Loan Forgiveness?
Short answer: yes. RAP qualifies for PSLF. For most public service workers it is now the smartest plan to pair with forgiveness. Here is why.
If you work for a qualifying employer and are chasing Public Service Loan Forgiveness, the new Repayment Assistance Plan counts. Every monthly payment you make on RAP qualifies toward the 120 payments needed for PSLF. And because RAP usually gives the lowest monthly payment of any available plan, it minimizes what you pay before forgiveness wipes out the rest.
Why RAP is usually the best plan for PSLF
PSLF forgives your remaining balance after 120 qualifying payments, which is 10 years. The forgiveness is completely tax free. Since the balance is forgiven regardless of how much you paid, the rational move is to minimize your monthly payment so you pay as little as possible before forgiveness hits.
At most income levels RAP charges less per month than IBR. A single borrower earning $60,000 with no dependents pays about $250 a month on RAP versus roughly $312 on new IBR. Over 10 years that is $7,440 less out of your pocket before forgiveness. The savings grow at lower incomes and with dependents.
The one situation where IBR might beat RAP for PSLF
IBR caps your payment at whatever the standard 10 year plan would charge. RAP has no cap. So if you earn a high income and have a relatively small loan balance, RAP can actually charge more per month than the standard plan. A borrower earning $150,000 with $50,000 in loans would pay $1,250 a month on RAP but only about $581 on the standard plan. IBR would cap at that $581. In that scenario IBR saves money during the PSLF period.
This only matters for high earners with modest balances. If you owe $100,000 or more and earn under $100,000, RAP almost always wins.
Your existing payments still count
If you have already been making qualifying payments on IBR, PAYE, or the old SAVE plan, those months carry over. Switching to RAP does not reset your PSLF clock. If you have 60 qualifying payments already, you still only need 60 more on RAP to reach forgiveness.
What qualifies as a PSLF employer
Government agencies at any level, federal, state, local, or tribal. Nonprofit organizations with 501(c)(3) status. Some other nonprofits that provide qualifying public services. Military service counts. The PSLF Help Tool on studentaid.gov can confirm your employer.
The SAVE forbearance problem
If you were on the SAVE plan, your loans have been in forbearance. Months spent in forbearance do not count toward PSLF. Every month you stay in limbo is a month that does not move you closer to forgiveness. Switching to RAP and starting payments again restarts your qualifying payment clock. Read more about what to do now that SAVE is gone.
How to switch to RAP for PSLF
Apply at studentaid.gov/idr and select the Repayment Assistance Plan. Submit your most recent tax return or income documentation. Once approved, every on-time payment counts toward PSLF as long as you work for a qualifying employer and certify your employment annually using the PSLF form.
See your RAP payment first
Before you switch, know what you will pay. The free RAP calculator shows your monthly payment and compares it to the standard plan in seconds. If you are near PSLF forgiveness, even a small payment difference matters because every dollar you pay before forgiveness is a dollar you did not need to spend.
Frequently asked questions
Does RAP qualify for PSLF?
Yes. RAP is a qualifying income driven repayment plan for Public Service Loan Forgiveness. Every on-time monthly payment counts toward the 120 needed for forgiveness.
Is PSLF forgiveness taxable?
No. PSLF forgiveness is completely tax free. This is different from RAP forgiveness after 30 years, which is taxable income.
Should I switch from IBR to RAP if I am pursuing PSLF?
Usually yes, because RAP gives a lower monthly payment at most income levels. The exception is high earners with small balances where IBR's payment cap saves money. Use the RAP calculator to compare.
Do my old IBR payments count if I switch to RAP?
Yes. Qualifying payments from any income driven plan carry over to RAP. Your PSLF clock does not reset when you change plans.