RAP vs IBR: which student loan plan costs less?
Published
Work out your own numbers with the rap student loans calculator.
From July 1, 2028, federal student loan borrowers who want an income-driven payment have two choices: the Repayment Assistance Plan (RAP) and Income-Based Repayment (IBR). This guide compares the two. For the full RAP rules, see the RAP guide.
The short answer
- RAP often gives a lower payment to borrowers with low income or dependents. It also stops your balance from growing.
- IBR can forgive your loans sooner, after 20 or 25 years instead of 30.
- New loans made on or after July 1, 2026 can only use RAP among the income-driven plans.
Side by side
| RAP | IBR | |
|---|---|---|
| Payment | 1% to 10% of AGI, by income band | A share of income above 150% of the poverty line |
| Minimum payment | $10 a month | $0 possible |
| Dependents | $50 a month less for each dependent | Raises the poverty line, so lowers payment |
| Unpaid interest | Waived | Can build up |
| Principal help | Match of up to $50 a month | None |
| Payment cap | None | 10-year standard payment |
| Forgiveness | After 360 payments (30 years) | After 20 or 25 years |
| Counts for PSLF | Yes | Yes |
| Parent PLUS | No | Only in some cases, after consolidation |
The IBR percentages come from long-standing law. Borrowers with loans before July 1, 2014 pay 15% of discretionary income and get forgiveness after 25 years. Newer borrowers pay 10% and get forgiveness after 20 years. Check your own terms on StudentAid.gov.
What changed in IBR
The 2025 tax and spending law removed IBR’s “partial financial hardship” test. Before, you could only join IBR if your IBR payment was less than your standard payment. Now any eligible borrower with older loans can enroll.
How RAP payments work
RAP takes a percentage of your adjusted gross income (AGI). The percentage rises by 1 point for each $10,000 of income, up to 10%. At $10,000 of AGI or less, you pay $120 a year. Then RAP takes $50 a month off for each dependent, with a $10 minimum.
If your payment does not cover the interest, the unpaid interest is waived. If your payment cuts the principal by less than $50, the government adds a match so the principal falls by up to $50.
Example
A single borrower with $45,000 AGI and no dependents:
- RAP: AGI falls in the 4% band. 4% of $45,000 is $1,800 a year, or $150 a month.
- IBR (newer borrower, 10%): the 2025 poverty guideline for one person is $15,650, so 150% is $23,475. Income above that is about $21,525. 10% of that is about $2,150 a year, or about $179 a month.
Here RAP is cheaper each month. But IBR could forgive the balance 10 years sooner. Run your own numbers in the RAP calculator.
Who should pick which
- Pick RAP if you have low income, have children, or your balance keeps growing on your current plan.
- Pick IBR if you have already made many qualifying payments and are close to 20 or 25 years.
- For PSLF: both count. Pick whichever payment is lower, since the rest is forgiven after 120 payments.
- Moving off SAVE: see SAVE plan ending.
Common questions
Can I switch from IBR to RAP later?
Yes. You can move from IBR to RAP. Check with your servicer whether moving out of IBR adds unpaid interest to your balance.
Can new borrowers use IBR?
No. Loans made on or after July 1, 2026 can only use RAP or a standard plan.
Is RAP or IBR better for PSLF?
Both count toward Public Service Loan Forgiveness. The plan with the lower monthly payment usually saves more, because the rest is forgiven after 120 payments.
Does IBR still need a financial hardship?
No. The 2025 law removed the partial financial hardship test. Any borrower with eligible loans can enroll.
Updated: November 1, 2026. Based on the One Big Beautiful Bill Act of 2025 and Federal Student Aid guidance. The example uses the 2025 HHS poverty guideline; your servicer uses the guideline in force when you apply. Check StudentAid.gov for your own plan terms.