RAP vs IBR: Which Plan Wins for You?
With SAVE repealed, most borrowers' real choice comes down to the new Repayment Assistance Plan (RAP) versus Income-Based Repayment (IBR). They calculate payments differently, treat interest differently, and forgive on different clocks — so the right answer flips depending on your income, family, and how long you've already been repaying.
The rules, side by side
| RAP | IBR | |
|---|---|---|
| Formula | 1–10% of total AGI by $10k bracket ÷ 12, −$50/dependent, min $10/mo | 10% (new) or 15% (pre-2014) of AGI above 150% of the poverty line ÷ 12 |
| Payment cap | None — rises with income | Capped at the 10-year Standard amount |
| Unpaid interest | Waived; balance never grows | Accrues; balance can stall |
| Principal help | Gov. match up to $50/mo | — |
| Forgiveness | 360 payments (30 yr) | 240 (new) / 300 (old) payments |
| $0 payments possible | No — $10/mo minimum | Yes, below 150% of poverty line |
| Who can enroll | All Direct Loan borrowers (not Parent PLUS) | Loans disbursed before July 1, 2026 |
Three worked examples
Month-by-month simulation, flat income, 2026 poverty guidelines. Totals are what the borrower pays before payoff or forgiveness.
Teacher, single, 1 child — $55k AGI, $45k @ 6.5%
Family of 2 for IBR; RAP gets the $50 dependent deduction.
| RAP | IBR | Standard | |
|---|---|---|---|
| First payment | $179.17 | $187.83 | $510.97 |
| Outcome | forgiven at 30 yr | forgiven at 20 yr | paid off in 10 yr |
| Total paid | $64,500 | $45,080 | $61,316 |
| Forgiven | $27,000 | $58,420 | — |
Nurse, married filing separately — $80k own AGI, $60k @ 6.5%
Spouse income excluded via MFS; family of 2.
| RAP | IBR | Standard | |
|---|---|---|---|
| First payment | $416.67 | $396.17 | $681.29 |
| Outcome | paid off in 23 yr 5 mo | forgiven at 20 yr | paid off in 10 yr |
| Total paid | $116,787 | $95,080 | $81,755 |
| Forgiven | — | $25,098 | — |
High balance, modest income — $50k AGI, $120k @ 7%
The classic negative-amortization case where interest treatment decides it.
| RAP | IBR | Standard | |
|---|---|---|---|
| First payment | $166.67 | $217.17 | $1,393.30 |
| Outcome | forgiven at 30 yr | forgiven at 20 yr | paid off in 10 yr |
| Total paid | $60,000 | $52,120 | $167,196 |
| Forgiven | $102,000 | $235,880 | — |
Rules of thumb
- Years into repayment ≥ 15: lean IBR — its shorter clock plus carried-over payment counts usually beats RAP's 30 years.
- Dependents: lean RAP for cash flow — at $60k AGI, two dependents cut RAP from $250.00 to $150.00/month, while IBR only shifts via family size ($300.50 → $158.50).
- Income near the poverty line: lean IBR — payments can be $0 while RAP always charges at least $10/month.
- Balance stalls under IBR: lean RAP — waived interest plus the $50 match means guaranteed progress.
- High income, can afford payoff: Standard (or extra payments) minimizes total interest — forgiveness plans only pay off if you reach forgiveness with a balance left.
Your situation isn't a rule of thumb.
Enter your AGI, family, balance, and rate — the simulator shows all three plans month by month.
Compare RAP vs IBR vs Standard →Frequently asked questions
Is RAP cheaper than IBR per month?
Often, but not always. RAP charges 1–10% of total AGI depending on your bracket, minus $50 per dependent. IBR charges 10% (or 15% for pre-2014 borrowers) of income above 150% of the poverty line. Low incomes near the poverty line usually pay less on IBR (often $0), while middle incomes — especially with dependents — often pay less on RAP. The crossover depends on family size, so run both.
Which plan forgives loans sooner, RAP or IBR?
IBR: 20 years (240 payments) for new borrowers on/after July 1, 2014, or 25 years (300 payments) for earlier borrowers. RAP requires 360 qualifying payments — 30 years. If you're already many years into IDR repayment, your existing qualifying payments typically count toward the IBR clock, which can make IBR dramatically cheaper in total.
How do the interest rules differ?
RAP waives any interest your monthly payment doesn't cover, and if your payment reduces principal by less than $50, the government adds the difference (up to $50/month) — your balance never grows and always falls at least slightly. Under IBR, unpaid interest accrues, so a low payment can leave your balance treading water until forgiveness.
Can I switch from IBR to RAP later (or back)?
You can move into RAP from other plans, but the 2025 law restricts moving out of RAP into IBR only for loans that were eligible for IBR, and plan-switching rules are still being implemented. Treat the choice as semi-permanent: model both time horizons before switching rather than counting on flipping back.
What about PSLF — do both plans qualify?
Yes, both RAP and IBR count as qualifying repayment plans for Public Service Loan Forgiveness. For PSLF the calculus simplifies: forgiveness arrives at 120 qualifying employment months either way, so the plan with the lower monthly payment usually wins.