Federal vs. Private · Principal Match · Payment Spike Alerts
July 1, 2026OBBBA / RAP Plan
RAP calculates your monthly payment as a percentage of your full AGI — no poverty-line buffer.
Payments range from 1% to 10% of AGI, with a $10 floor.
Each dependent reduces your bill by $50/mo.
Your Situation
Federal Loan Balance$250,000
$50,000$500,000
Current AGI (Residency / Year 1)$85,000
Uses prior tax year AGI for payment calculation
$40,000$200,000
Projected Associate Income AGI$130,000
When you recertify — this triggers the payment spike
$60,000$250,000
Federal Loan Interest Rate7.54%
4.00%10.00%
Dependents
Current RAP Payment (Residency / Low-Income Year)
Monthly Payment
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Monthly Interest
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Accruing on balance
Bracket
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Interest Subsidy
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—
Principal Match
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After Income Recertification (Associate Income)
Future Monthly Payment
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Payment Spike
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Increase at recertification
New Bracket
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With Grad PLUS gone, new dental students borrowing post-July 2026 are capped at
$50,000/year federal.
The gap comes from private lenders. This tab models your total monthly obligation and lifetime cost.
Your Loan Stack
Federal Loan Balance (RAP-eligible)$200,000
Max federal: $200K lifetime for professional students
$50,000$200,000
Private Loan Balance (Gap Funding)$60,000
No IDR protection — fixed payment regardless of income
$0$200,000
Federal Interest Rate7.54%
4.00%10.00%
Private Interest Rate6.20%
Varies by credit score, co-signer, and lender
3.00%12.00%
Private Repayment Term10 yrs
5 yrs20 yrs
Your Current AGI$85,000
$40,000$200,000
Monthly Payment Breakdown
Federal RAP Payment
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Private Loan Payment
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Total Monthly Obligation
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Lifetime Cost Comparison
RAP 30-Year Path
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Federal only · balance forgiven at 30yr
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Standard 10-Year Payoff
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Higher monthly · no forgiveness tail
Pay it off clean
The key question: Private loans carry no income protection. If your income drops —
practice transition, health issue, economic dip — your private lender still expects full payment.
RAP adjusts automatically at next recertification. If you're PSLF-eligible,
every dollar of private loan you carry is dead weight — private loans don't qualify.
RAP uses your prior year AGI — not gross income.
Every dollar of pre-tax retirement contribution, HSA, and qualifying deduction reduces what you pay.
This is the most underused tool in dental debt strategy.
Income
Your Gross Income (W-2 or Self-Employed)$85,000
$60,000$300,000
AGI Reduction Strategies
Key principle: RAP removes the poverty-guideline income buffer that SAVE and IBR used.
That means every dollar of AGI reduction has a more direct impact on your payment than under any prior IDR plan.
Max your pre-tax vehicles before recertification — it's legal, it's encouraged, and it works.