Last Updated: October 20, 2026
Repayment plan rules are changing. Check StudentAid.gov for the latest before you choose.
If SAVE ended for you, the choice is often IBR vs RAP after SAVE. RAP can be cheaper each month at lower and middle incomes.
IBR can win for higher incomes, bigger families, and faster forgiveness. Run both plans in the StudentAid.gov Repayment Calculator (formerly called Loan Simulator) before your deadline.
Why SAVE Borrowers Must Choose Now
A federal court order ended the SAVE (Saving on a Valuable Education) plan in March 2026. Your servicer sends a 90-day notice to pick a new plan, then a final 30-day notice.
Servicers notify borrowers in groups, so your deadline may differ from a friend’s. Check your servicer’s notice for your exact date.
Read our guide on the SAVE plan final 30-day notice for what to expect.
IBR vs RAP at a Glance
IBR means Income-Based Repayment. RAP means Repayment Assistance Plan, created by the One Big Beautiful Bill Act (Public Law 119-21).
| Feature | IBR | RAP |
|---|---|---|
| Payment basis | Discretionary income (AGI minus 150% of the poverty guideline) | Your full adjusted gross income (AGI) |
| Payment rate | 10% (first borrowed on or after July 1, 2014) or 15% (earlier borrowers) | 1% to 10% of AGI, depending on income bracket |
| Payment cap | Capped at the 10-year Standard plan amount | No cap |
| Forgiveness | 20 years (10% group) or 25 years (15% group) | 30 years (360 qualifying payments) |
| Loans disbursed on or after July 1, 2026 | Generally not available | The only income-driven plan available |
| PSLF | Counts if you meet employment rules | Counts if you meet employment rules |
| Minimum payment | Set by the formula; confirm your amount in the calculator | $10 per month (reported) |
| Dependents | Family size raises the poverty guideline | $50 off per month per dependent (reported) |
RAP has been available since July 1, 2026. Verify each point on StudentAid.gov before you decide.
How the IBR Payment Is Calculated
IBR charges a percentage of the income above 150% of the federal poverty guideline. That protected slice of income is the key feature.
Formula: (AGI minus 150% of the poverty guideline) x 10% or 15%, divided by 12.
- Find your AGI on your latest tax return.
- Look up the 2026 HHS poverty guideline for your family size.
- Multiply that guideline by 1.5.
- Subtract the result from your AGI. This is your discretionary income.
- Multiply by 10% if you first borrowed on or after July 1, 2014. Use 15% for earlier borrowers.
- Divide by 12 for the monthly amount.
- Compare it with the 10-year Standard plan payment. IBR will not exceed that amount.
The 2026 HHS poverty guidelines for the 48 contiguous states and D.C. are $15,960 for one person, $21,640 for two, and $33,000 for four. Alaska and Hawaii use higher figures.
How the RAP Payment Is Calculated
RAP charges a percentage of your entire AGI. Nothing is protected first.
The percentage depends on your income bracket. It is applied to your whole AGI, not just the part inside the bracket.
- AGI of $10,000 or less: a flat $120 per year ($10 per month).
- AGI of $10,001 to $20,000: 1%.
- Each additional $10,000 of AGI adds one percentage point.
- AGI above $100,000: 10%.
Formula: (AGI x bracket percentage), divided by 12, minus $50 for each dependent. The lowest payment is $10 per month.
RAP has no payment cap. Higher earners can pay more than they would on a 10-year Standard plan.
Confirm the current brackets and dependent rules on StudentAid.gov. Reported figures vary across websites.
Worked Examples
These examples use the 2026 HHS poverty guideline from aspe.hhs.gov and the formulas above. They assume the 10% IBR group and ignore the IBR cap.
| Scenario | IBR (before cap) | RAP |
|---|---|---|
| Single, AGI $50,000 | $217.17 per month | $166.67 per month |
| Single, AGI $120,000 | $800.50 per month | $1,000.00 per month |
| Family of 4, two dependents, AGI $50,000 | $4.17 per month | $66.67 per month |
For the first row, 150% of $15,960 is $23,940. Then $50,000 minus $23,940 is $26,060, and 10% of that is $2,606 per year.
For RAP at $50,000, the 4% bracket gives $2,000 per year. A borrower in the 15% IBR group would pay more than shown.
These are estimates, not your payment. Test your real numbers in the Repayment Calculator.
When RAP Often Costs Less
RAP often wins at lower and middle incomes. The low bracket percentages can beat IBR’s 10% or 15% charge.
It can also help borrowers in the 15% IBR group, since RAP tops out at 10% of AGI.
RAP can also help when you have several dependents. Each one takes $50 off the monthly payment, down to the $10 minimum.
Say “often,” not “always.” Your family size and loan dates can flip the result.
When IBR Often Costs Less
IBR can win at higher incomes. Its payment cap stops it from rising above the 10-year Standard plan amount, and RAP has no such cap.
IBR can also win for larger families. The poverty guideline rises with each family member, so more income is protected before the percentage applies.
The third IBR advantage is time. Forgiveness comes after 20 or 25 years, not 30.
A shorter timeline matters most if you expect to carry a balance for decades.
Which Plan Is Better for PSLF?
Payments under both RAP and IBR count toward Public Service Loan Forgiveness (PSLF), if you meet the employment rules.
If you are working toward PSLF, the plan with the lower monthly payment is usually the point. PSLF forgiveness is based on qualifying payments, not on which plan you used.
Current SAVE borrowers working toward PSLF need another income-driven plan to stay eligible. Tiered Standard payments do not count toward PSLF.
Turn on “PSLF” in the calculator to compare plans with forgiveness in mind.
What If You Borrowed After July 1, 2026?
For loans disbursed on or after July 1, 2026, RAP is the only income-driven plan available. IBR is generally limited to loans disbursed before that date.
Reported, and worth verifying: taking out even one new federal loan on or after July 1, 2026 can limit all your Direct Loans to RAP and the Tiered Standard Plan.
That includes your older loans. Check your loan list and disbursement dates on StudentAid.gov before borrowing again or consolidating.
PAYE and ICR, two older plans, close no later than July 1, 2028.
How to Compare Both Plans in the Loan Simulator
The official tool is now called the Repayment Calculator (formerly Loan Simulator). Have these ready first:
- Your latest AGI
- Your family size and number of dependents
- Your servicer name
- Each loan balance and its disbursement date
- Log in to StudentAid.gov with your FSA ID so your loans load automatically.
- Confirm your loan balances, types, and dates.
- Enter your income and family size.
- Select IBR and RAP to view them side by side.
- Sort by monthly payment, then check total paid and forgiveness timeline.
- If you work in public service, turn on the PSLF view.
- Write down both results before you apply.
The tool does not count your past payments, and the results are estimates. Your servicer’s final number may differ.
Can You Switch Later?
Reported: borrowers in an income-driven plan can generally change to another plan they qualify for. Verify this on StudentAid.gov before relying on it.
Be careful, though. Time and forgiveness credit can differ between plans, so check with your servicer before you switch.
Ask exactly how your qualifying payments will be counted in the new plan. Get the answer in writing if you can.
Your loan type and disbursement dates also affect which plans you can switch into.
What Happens If You Do Nothing
If you miss the final deadline, your servicer places you in the Standard Plan or the Tiered Standard Plan. Which one depends on your loans.
Those payments may be higher than an income-driven plan. Tiered Standard payments also do not count toward PSLF.
Read our final 30-day notice guide to see how to act before that happens.
Don’t Pay Anyone to Switch Plans
Federal servicer help is free. You can apply for a plan yourself at StudentAid.gov or through your servicer.
Any company that charges a fee to switch your plan is a red flag. Walk away and contact your servicer directly.
After You Choose: Auto Pay for the 1% Discount
Once you pick a plan, you can enroll in auto pay for a 1% interest rate discount, if you qualify.
Frequently Asked Questions
Is RAP better than IBR?
It depends on your income, family size, and loan dates. RAP often gives a lower payment at lower and middle incomes, while IBR can win at higher incomes. Run both in the calculator.
Which is cheaper, IBR or RAP?
Either can be cheaper. RAP charges a percentage of all your AGI, while IBR charges only on income above 150% of the poverty guideline. Compare both with your real numbers.
Can I use IBR if I take a new loan after July 1, 2026?
IBR is generally limited to loans disbursed before July 1, 2026. A new loan can also limit your older Direct Loans to RAP and Tiered Standard. Verify this on StudentAid.gov first.
Do RAP and IBR both count for PSLF?
Yes. Payments under both plans count toward PSLF if you meet the employment rules. Tiered Standard payments do not count.
How long until my loans are forgiven under RAP vs IBR?
RAP forgives after 30 years (360 qualifying payments). IBR forgives after 20 years for the 10% group or 25 years for the 15% group.
Can I switch from RAP to IBR later?
Borrowers can generally change to another plan they qualify for. Credit toward forgiveness can differ between plans, so ask your servicer before switching.