RAP vs IBR: Which One Is Actually Cheaper?
The common summary is that the new Repayment Assistance Plan is the harsher option and IBR is the one to hold onto. Run both formulas as the regulations actually define them, and that turns out to be wrong for a large group of borrowers.
Why the comparison is not obvious
The two plans are built differently, so their percentages are not comparable.
IBR takes 10% of your discretionary income — the portion of your AGI above 150% of the federal poverty guideline for your household size. For a single borrower in 2026 that threshold is $23,940, so the first $23,940 of income is excluded before the percentage applies.
RAP takes between 1% and 10% of your entire AGI, with no deduction whatsoever, then subtracts $50 for each dependant claimed on your tax return.
A fixed subtraction behaves very differently from a percentage as income rises. That is the whole story, and it is why the answer changes direction more than once.
The actual numbers
Both plans calculated from the regulations, using a $60,000 balance at 6.53% and the 2026 poverty guidelines for the 48 contiguous states.
| AGI | Household | RAP | IBR | Cheaper |
|---|---|---|---|---|
| $25,000 | 1 | $41.67 | $10.00 | IBR |
| $35,000 | 1 | $87.50 | $92.17 | RAP |
| $45,000 | 1 | $150.00 | $175.50 | RAP |
| $55,000 | 1 | $229.17 | $258.83 | RAP |
| $75,000 | 1 | $437.50 | $425.50 | IBR |
| $45,000 | 4 | $10.00 | $0.00 | IBR |
| $75,000 | 4 | $287.50 | $212.50 | IBR |
| $100,000 | 2 | $700.00 | $562.83 | IBR |
The pattern
- Lower incomes, or any dependants: IBR, and often decisively. Its poverty-line deduction can take the payment to $0. RAP cannot go below $10.
- Middle incomes without dependants: RAP, across a wide band. Its low starting percentages beat IBR's flat 10% on a slightly smaller base.
- Higher incomes: IBR again. The poverty deduction stays fixed while RAP's percentage climbs to 10% of everything.
The payment is not the whole decision
Two structural differences matter more than a few dollars a month.
Balance behaviour favours RAP. RAP waives all accrued interest not covered by an on-time payment, and adds a matching principal payment where the borrower's own payment reduces principal by less than $50. Because unpaid interest is waived rather than accumulated, there is nothing to capitalise later. An on-time RAP borrower retires at least $50 of principal a month and never watches their balance grow. Under IBR, negative amortisation on unsubsidised loans is routine, and the regulation capitalises unpaid interest when the borrower leaves the plan.
Forgiveness credit runs one way. IBR payments count toward RAP's 360. RAP payments count toward nothing else. If you are already well advanced toward IBR forgiveness, switching to RAP resets that clock — and no monthly saving is likely to offset several years of forfeited credit.
RAP also forgives at 30 years against IBR's 20 or 25, which cuts the other way for anyone who expects to still carry a balance at the end.
Before you decide
Check whether IBR is even open to you. A borrower who has made 60 or more qualifying repayments under SAVE or REPAYE on or after 1 July 2024 is barred from enrolling in IBR entirely, which makes the comparison moot.
Then confirm your figures on the official Federal Student Aid Loan Simulator. Any calculator, including ours, works from the regulation rather than from your servicer's record of your income, dependants, and eligible loans.
Sources: 34 CFR 685.209 (91 FR 23887, 1 May 2026) for both payment formulas, the eligibility bar, capitalisation, and qualifying payments; 34 CFR 685.202(b) for capitalisation triggers; HHS/ASPE 2026 poverty guidelines, published 15 January 2026.