RAP or IBR? Choosing a Student Loan Repayment Plan

RAP takes a percentage of your whole adjusted gross income, and the percentage rises with income: 1% if you earn between $10,000 and $20,000, 2% between $20,000 and $30,000, and so on up to 10% above $100,000. It then takes $50 a month off for each dependent, and the payment never falls below $10.

IBR starts by setting aside an amount of income it treats as protected, 150% of the federal poverty line for your family size. For a single person in 2026 that's $23,940, and for a family of four it's $49,500. You pay 10% of everything above that if you first borrowed after mid-2014, or 15% if your loans are older. IBR also has a ceiling: your payment can never be more than the standard 10-year payment on your loans.

Here is what each plan asks for each month, on the same $35,000 of loans at 6.5%. The standard 10-year payment on that balance is $397.42, which is also the most IBR can ever charge.

• At low incomes, IBR's protected amount does a lot of work, so IBR tends to be lower.
• For single people in the middle, RAP is often lower, because its percentage is small at those income bands.
• For families, IBR's protected amount grows with each person in the household, while RAP's $50 per child is modest, so IBR often comes out ahead.
• At high incomes, RAP keeps charging 10% with no ceiling, while IBR stops at the standard payment. That isn't all bad: on RAP, a $1,000 payment clears this loan in 39 months, a little over three years.

This is where RAP is genuinely kinder. If your RAP payment is smaller than the interest charged that month, the unpaid interest is simply waived. On top of that, if your payment reduces the balance by less than $50, the government makes up the difference, up to the amount you paid.

Take the single borrower on $28,000. Interest on $35,000 at 6.5% is about $189.58 a month, and her RAP payment is $46.67. The interest she can't cover is waived, and because none of her payment reached the balance, the government reduces it by $46.67. Her balance goes down every month, even though her payment is small.

Under IBR, interest that your payment doesn't cover keeps building up. On subsidized loans the government pays it for the first three years, but after that, and on unsubsidized loans from the start, it accrues and can be added to the balance later. A low IBR payment can mean a balance that grows for years.

Both plans forgive whatever is left at the end, but the end comes at different times. IBR forgives the remaining balance after 20 years if you first borrowed after mid-2014, or 25 years for older loans. RAP asks for 360 qualifying payments, which is 30 years.

So the plan with the lower monthly payment isn't automatically the better deal. If you expect to have a balance left at the end, IBR's shorter road to forgiveness counts for a lot. If you expect to pay the loan off in full, the lower monthly payment and RAP's interest waiver matter more. It's also worth knowing that forgiven balances are generally treated as taxable income, apart from Public Service Loan Forgiveness.

• Both plans use your spouse's income too if you file a joint tax return. RAP leaves it out if you're married and file separately.
• RAP counts only dependents you claim on your own tax return.
• Loans made on or after 1 July 2026 can't use IBR, so borrowing again can narrow your options for the new loan.
• You can always pay more than the minimum on either plan, which shortens the loan and reduces total interest.
• If you're weighing a switch, run your own balance, rate and income through the Student Loan Calculator, and check with your loan servicer which plans your particular loans can use.