The new RAP plan bases payments on adjusted gross income. By filing taxes separately, a spouse with student debt can have their payment calculated solely on their own income. This can significantly reduce monthly payments, but requires weighing the benefit against losing certain tax breaks.
The Secure 2.0 Act lets employers treat student loan payments as 401k contributions. When an employee pays their loan, the company can deposit a matching amount into their retirement account, eliminating the need to choose between paying debt and saving for retirement.
With the SAVE plan ending, borrowers who fail to choose a new repayment plan within 90 days will be automatically placed into a standard plan. This plan disregards income and splits the balance over a fixed term, potentially causing payments to skyrocket from $0 to hundreds overnight.
Under the new Repayment Assistance Plan (RAP), if a borrower's monthly payment doesn't cover the accrued interest, the government pays the difference. This unique feature ensures that the loan balance will not increase over time, a common and demoralizing problem with other income-driven plans.