The RAP Payment Formula, Line by Line
Every dollar of your RAP payment comes from four moving parts: your AGI bracket, your dependents, the floor, and whose income counts. This page walks the statute's math line by line — including the bracket cliffs the press coverage keeps missing.
Line 1 — Find your applicable percentage
Take AGI from line 11 of your most recent Form 1040. The statute assigns one percentage to your whole AGI:
| AGI | Rate | Monthly base (mid-bracket) |
|---|---|---|
| ≤ $10,000 | $10 flat | $10 |
| $10,001–$20,000 | 1% | ~$13 |
| $20,001–$30,000 | 2% | ~$42 |
| $30,001–$40,000 | 3% | ~$88 |
| $40,001–$50,000 | 4% | ~$150 |
| $50,001–$60,000 | 5% | ~$229 |
| $60,001–$70,000 | 6% | ~$325 |
| $70,001–$80,000 | 7% | ~$438 |
| $80,001–$90,000 | 8% | ~$567 |
| $90,001–$100,000 | 9% | ~$713 |
| > $100,000 | 10% | AGI × 10% ÷ 12 |
Annual payment = AGI × rate. Monthly = that ÷ 12. Unlike the income tax code, these are not marginal brackets — the rate applies to every dollar, which produces the cliff below.
Line 2 — Mind the cliff
At $70,000 AGI you pay 6% = $4,200/yr ($350/mo). At $70,001 you pay 7% = $4,900/yr ($408/mo). One extra dollar of income raised your loan bill by $700/year. The cliffs sit at every $10,000 line from $10,000 to $100,000. If your AGI hovers near a boundary, ordinary tax levers — 401(k) and traditional IRA contributions, HSA contributions, pre-tax benefits — reduce AGI directly and can drop you a full bracket. That's not a loophole; it's how the statute is written.
Line 3 — Subtract dependents
After the bracket math, subtract $50 per month for each dependent claimed on your return. Two kids = $100/month off, every month, regardless of income. The definition follows the tax code's dependent rules — children and qualifying relatives you actually claim; a spouse is never a dependent. Full treatment, including how the deduction interacts with the floor and with married-filing-separately returns, is on the dependent deduction page.
Line 4 — Apply the floor
Whatever the math produces, the payment is never below $10/month, and AGI at or below $10,000 pays exactly $10. The zero-dollar payment that SAVE, PAYE, and IBR all allowed is gone. It sounds trivial; it isn't — the floor is what keeps every month "on-time capable," which is the condition for the interest waiver and principal match. The design logic and edge cases live on the $10 minimum page.
Line 5 — Whose income counts
- Single: your AGI.
- Married filing jointly: combined AGI — both incomes, one bracket. (If your spouse has federal loans of their own, the calculation accounts for that; couples where both carry debt should read the joint-filing details.)
- Married filing separately: your own AGI and your own claimed dependents only. This single choice moves more money for more borrowers than any other RAP lever — a $60k earner married to a $90k earner pays 5% of $60k filing separately vs 10-bracket-territory jointly. The trade-offs (lost tax credits, higher tax rates) are quantified on the MFS page.
Worked example, end to end
Married borrower, files separately, AGI $52,000, two dependents claimed: bracket 5% → $52,000 × 5% = $2,600/yr → $216.67/mo → minus $100 dependents → $117/mo. Same borrower filing jointly with a $70k spouse: AGI $122,000 → 10% → $1,016.67/mo → minus $100 → $917/mo. Same person, same loans, $800/month apart on a tax checkbox. Run your own scenario both ways in the calculator.
Every bracket, every worked payment (single, no dependents)
| AGI | Rate | Annual | Monthly |
|---|---|---|---|
| $8,000 | flat | $120 | $10 |
| $15,000 | 1% | $150 | $13 |
| $25,000 | 2% | $500 | $42 |
| $35,000 | 3% | $1,050 | $88 |
| $45,000 | 4% | $1,800 | $150 |
| $55,000 | 5% | $2,750 | $229 |
| $65,000 | 6% | $3,900 | $325 |
| $75,000 | 7% | $5,250 | $438 |
| $85,000 | 8% | $6,800 | $567 |
| $95,000 | 9% | $8,550 | $713 |
| $110,000 | 10% | $11,000 | $917 |
| $150,000 | 10% | $15,000 | $1,250 |
Managing your AGI: the legal levers, ranked
Because the formula runs on AGI, everything that legally reduces AGI reduces your payment — and near a cliff, the effect is dramatic. Ranked by accessibility: (1) Traditional 401(k)/403(b)/TSP contributions — every pre-tax dollar is a dollar off AGI, and near a bracket boundary the combined return (tax savings + payment reduction + match) can exceed 50 cents per dollar contributed. (2) HSA contributions if you're on a qualifying health plan — triple tax advantage plus AGI reduction. (3) Traditional IRA — subject to deduction phase-outs, but available even without a workplace plan. (4) Pre-tax benefits — commuter, FSA, employer premiums — smaller but automatic. What doesn't work: Roth contributions (post-tax, no AGI effect), and the student loan interest deduction (worth checking, but capped and phased out). The strategic mindset shift: under RAP, your tax return is your loan bill's source code, and you edit it once a year.
Mistakes we expect servicers (and borrowers) to make
- Off-by-one bracket errors at boundaries — $70,000 exactly is the 6% bracket ($10,001–$20,000 pattern puts the round number at the top of its bracket); a system that computes it as 7% overcharges $58/month. Verify round-number AGIs especially.
- Dependents dropped — the deduction rides on the return's dependent claims; a pull that misses them overbills $50 each. Your approval letter should show the count.
- Spousal income counted on separate returns — the MFS rule is clear, but transition-era systems have miscounted before. If you filed separately and the payment looks like joint math, dispute in writing immediately.
- Stale-year pulls — payments computed from an older return than your latest filed one. Worth a recalculation request if the newer return is lower.
The formula at every bracket: one table to bookmark
Because the brackets step at clean $10,000 lines, you can hold the whole formula in your head: AGI ≤ $10k pays the $10 floor; $10–20k pays 1% of AGI; $20–30k pays 2%; and so on, one point per bracket, capping at 10% for $100k and above — then minus $50 per dependent, never below the floor. Monthly at the bracket midpoints, single borrower: $15k AGI → $12; $25k → $42; $35k → $87; $45k → $150; $55k → $229; $65k → $325; $75k → $437; $85k → $566; $95k → $712; $150k → $1,250. Two features of the shape worth noticing: payments accelerate faster than income through the middle brackets (both the rate and the base rise together), and the bracket edges create tiny cliffs — a $1 raise from $59,999 to $60,001 moves you from 5% to 6%, adding roughly $50/month. Not a reason to refuse raises; a reason to expect the recalculation.
Auditing your servicer's math
When the first RAP bill lands, verify it in ninety seconds: take the AGI from your last filed return, find the bracket, multiply, divide by twelve, subtract $50 per dependent claimed on that return, floor at $10. If the servicer's number differs by more than rounding, the usual culprits, in order: they priced you on a different tax year than you expected (the data pipe pulls the most recent processed return — a late-filed return means stale data), a filing-status mismatch, or a dependent count that doesn't match the return. Dispute with the math written out — servicer reps correct cited arithmetic quickly, and the calculator prints exactly the citation you need.