RAP's $50 Dependent Credit and the $10 Floor, Precisely

RAP replaces the poverty-line deductions of older plans with something blunter: a flat $50/month off your payment for every dependent, and a hard $10/month floor underneath everything. Simple — but the details decide real dollars, and two of them are widely misreported.

Who counts as a dependent

The regulation points at IRC §152 — the tax-code definition — and requires the person to be claimed on the borrower's federal return (34 CFR 685.209(b)(3)). Three consequences:

• It's not just young children. Qualifying relatives — a supported parent, an adult child who meets the tests — count too.
• Not claimed, no credit. If a divorce decree gives the other parent the dependency claim in alternating years, your RAP payment rises $50 per child in your off years.
• Filing separately? Only dependents on your return count — coordinate who claims whom (details in the MFS guide).

The order of operations: credit first, floor second

Compute the base payment from your AGI bracket, divide by twelve, subtract $50 per dependent — then apply the $10 floor. Payment = max($10, base/12 − $50 × dependents). The floor wins every collision: dependents can never push a payment below $10, and there is no $0 payment at any income. (Contrast IBR, where a payment computed under $5 is legitimately $0 — and still counts toward forgiveness.)

Payment table: monthly RAP payment by AGI and dependents

Notice the flat $10 rows: at $30,000 AGI, one dependent already hits the floor ($50 − $50 = $0 → $10), so second and third dependents change nothing. The credit is worth the most to middle-income parents — at $48,000, three dependents cut the payment from $160 to the floor.

The $10 floor's fine print

• Even at zero income, you owe $10. Budget-trivial, but it catches people used to SAVE's $0 payments — autopay it and forget it, because a missed $10 payment still costs you that month's interest waiver, principal match, and forgiveness credit.
• The floor payment still buys the full subsidy stack — the month counts toward the 360, unpaid interest is waived, and the principal match applies. But the match at $10 is $10, not $50: the top-up is capped at the lesser of $50 or your payment. A minimum-payment borrower's $20,000 balance falls by $10/month, reaching 30-year forgiveness with roughly $16,400 left — forgiven, and currently taxable.
• The final payment can be less than $10 — the one exception, when less than $10 remains.

Planning notes

• A new baby is a $600/year payment cut — file the annual recertification promptly rather than waiting for the anniversary date.
• The credit stacks with the bracket system oddly: a $48,000 parent of three pays $10/month while a $20,000 single borrower pays $16.67. Whether that's generous or strange, it's the law as written — plan around it.
• See how the credit changes your full 30-year picture — not just this month's payment — in the comparison calculator.