Repayment after the 2025 law · guide
RAP or IBR: choosing between the two income-driven plans
For a single borrower with no dependent who first borrowed after June 2014, IBR asks less below about $30,000 of income, RAP asks less from there to about $80,000, and IBR wins again above that: at $28,000 IBR asks $34 a month against $47 on RAP, while at $55,000 RAP asks $229 against $259 on IBR for someone who first borrowed after June 2014. The gap comes from the formulas. IBR charges 10% (or 15% for older borrowers) only on income above $23,940, 150% of the 2026 poverty guideline for one person; RAP charges 1% to 10% of the whole income, then takes $50 off per dependent. Monthly payment is only half the decision. RAP waives the interest an on-time payment does not cover and pushes principal down by up to $50 a month, but forgives only after 30 years; IBR lets unpaid interest grow and forgives after 20 or 25 years. And IBR is open only to borrowers with no loan made on or after July 1, 2026.
RAP or IBR at your income
Lower monthly payment: RAP
$50
| RAP | $50 |
| IBR, borrower since July 2014 (10%) | $63 |
| IBR, earlier borrower (15%) | $94 |
IBR shown before its 10-year standard cap, which can lower it for small balances.
Both plans follow your income, but they measure it differently, treat interest differently and forgive at different dates.
Checked by Radif Partners · Editorial policy · How we calculate
Two ways of reading the same tax return
IBR starts by protecting a living allowance: 150% of the HHS poverty guideline for your family size, $23,940 for one person and $40,980 for three in 2026. Only income above that line is charged, at 10% or 15%. RAP protects nothing. It sorts adjusted gross income into $10,000 brackets and applies the bracket's rate to every dollar, then subtracts $50 a month per dependent. The design rewards households with children on RAP and low earners on IBR.
| Situation | RAP | IBR (10%) |
|---|---|---|
| Single, $28,000 | $47 | $34 |
| Single, $55,000 | $229 | $259 |
| $55,000, two dependents | $129 | $117 |
| Single, $110,000 | $917 | $717 |
The last line shows a pattern that surprises many borrowers: at high incomes the 10% IBR rate on income above the line can come in under RAP's 10% on the whole income. For an earlier borrower at 15%, the comparison flips again.
Interest and the shape of the balance
The payment is not the full cost. Take $60,000 of graduate loans at 8.07% and a $50,000 income that grows 3% a year. On RAP this borrower would finish in about 25 years and pay $129,092 in total, with $16,397 of interest waived and $7,200 of matching payments. On IBR the same borrower would pay $86,472 over 20 years and have $70,368 forgiven. The plan comparator runs that comparison on your own numbers.
Borrowers who expect to repay in full usually lose little by choosing the plan with the lower monthly payment early on and paying extra later. Borrowers who expect forgiveness should look at the forgiveness date and at the tax that may come with it, explained in taxes on forgiveness.
The sawtooth: why RAP jumps every ten thousand dollars
Because RAP applies one rate to the whole income, its payment rises in steps. At $50,000 a single borrower pays $167 a month; one dollar more of AGI moves the rate from 4% to 5% and the payment to $208. IBR has no steps: each extra dollar of income adds the same 10 cents a year. That is why the two plans can trade places several times between $30,000 and $100,000, and why a borrower sitting just above a RAP bracket line can lower the payment by moving income below it with a pre-tax retirement contribution, which reduces AGI.
A quick way to decide
Three questions settle most cases. First, can you still use IBR at all, meaning no Direct Loan made on or after July 1, 2026? If not, the choice is RAP or Tiered Standard. Second, do you expect forgiveness, through PSLF or through 20 to 30 years of payments, or do you expect to repay everything? If you expect PSLF, take the lower monthly payment for your income. If you expect to repay in full, the plan that lets less interest pile up usually costs less, and RAP's waiver works in your favor whenever your payment is below the monthly interest. Third, how do your dependents and filing status change each formula? Each dependent is worth $50 a month on RAP; on IBR it raises the protected line by $8,520 a year.
When the two plans are within a few dollars, the interest rule tips the balance. On IBR the interest you do not pay waits for you; on RAP, as long as you pay on time, it does not. The waiver and matching payment page shows the monthly mechanics, and the IBR calculator shows how much interest accrues on IBR at your payment.
Who can still pick IBR
IBR remains in the law, without the partial financial hardship test it used to require, but only for loans made before July 1, 2026 (34 CFR 685.209(d)(5)). A student who takes a new Direct Loan in 2026-27 moves all their Direct Loans to the two-plan menu, RAP or Tiered Standard. Parent PLUS loans and consolidations that repaid them cannot use RAP at all, and can reach IBR only through the consolidation route described on parent PLUS repayment options. A borrower who made 60 or more payments under SAVE (REPAYE) since July 1, 2024 is barred from enrolling in IBR by the same regulation.
Married borrowers
Both plans count a spouse's income only on a joint tax return, and both then share the payment between spouses who each have eligible loans. Filing separately can cut the payment on either plan; the cost is usually higher income tax and the loss of some credits. RAP counts only the dependents on your own return when you file separately. Married filing separately and student loans shows the arithmetic.
What the comparison leaves out
The figures above use the 48-state poverty guideline; Alaska and Hawaii have higher lines, which lower IBR there. They ignore the three-year interest subsidy IBR gives on subsidized loans, and they assume every payment arrives on time, which RAP requires for its waiver and its match. A borrower with FFEL loans must consolidate into a Direct Loan before RAP is available, and a new consolidation made after July 1, 2026 can only be repaid under RAP or Tiered Standard, so consolidating closes the IBR door too.
Deadlines that force the choice
Borrowers on PAYE or ICR have until June 30, 2028 to choose. If they do nothing, the Department places RAP-eligible loans on RAP on July 1, 2028 and the rest on IBR. Former SAVE borrowers received a 90-day notice from their servicer starting July 1, 2026; without an answer their loans go to a standard plan, which is rarely the cheapest. Rules: Public Law 119-21, section 82001 and Department of Education, March 27, 2026.