The new Repayment Assistance Plan, or RAP, changes the student loan repayment comparison for many borrowers. It does not simply replace SAVE with the same formula. RAP uses adjusted gross income directly, applies a 1% to 10% income schedule, subtracts $50 per dependent from the monthly payment, and has a $10 minimum monthly payment.
IBR, by contrast, generally uses discretionary income: income above a poverty-guideline threshold. Depending on borrower status, IBR payments are generally 10% or 15% of discretionary income.
If you are leaving SAVE, start with SAVE Plan Ending in 2026. If you prefer fixed payments, see Tiered Standard Repayment Plan 2026.
RAP Formula for 2026
Under the Department’s rule text, RAP’s base payment is tied to AGI:
| AGI | Annual base payment |
|---|---|
| $10,000 or less | $120 |
| $10,001-$20,000 | 1% of AGI |
| $20,001-$30,000 | 2% of AGI |
| $30,001-$40,000 | 3% of AGI |
| $40,001-$50,000 | 4% of AGI |
| $50,001-$60,000 | 5% of AGI |
| $60,001-$70,000 | 6% of AGI |
| $70,001-$80,000 | 7% of AGI |
| $80,001-$90,000 | 8% of AGI |
| $90,001-$100,000 | 9% of AGI |
| Over $100,000 | 10% of AGI |
Monthly RAP payment:
annual base payment / 12 - $50 per dependent
If the result is below $10, the payment is adjusted to $10.
IBR Formula in Plain English
IBR is based on discretionary income. For many borrowers:
- newer IBR borrowers: 10% of discretionary income
- older IBR borrowers: 15% of discretionary income
Discretionary income for IBR generally means AGI above 150% of the applicable poverty guideline. That means IBR can produce a lower payment than RAP at some income levels because it excludes a protected amount of income before applying the percentage.
Example 1: $50,000 AGI, No Dependents
RAP: At $50,000 AGI, the annual base payment is 4% of AGI.
$50,000 x 4% = $2,000 per year
Monthly RAP payment:
$2,000 / 12 = $166.67
IBR: The result depends on poverty guideline, family size, and whether the borrower is under 10% or 15% IBR. A single borrower may find IBR competitive or lower because IBR does not apply the percentage to the first portion of income.
Example 2: $50,000 AGI, Two Dependents
RAP starts with the same $166.67 monthly amount, then subtracts $50 per dependent.
$166.67 - $100 = $66.67
RAP can become attractive for borrowers with dependents because the dependent adjustment is direct and monthly.
Example 3: $110,000 AGI, No Dependents
RAP: Over $100,000 AGI, the annual base payment is 10% of AGI.
$110,000 x 10% = $11,000 per year
Monthly RAP payment:
$11,000 / 12 = $916.67
At higher incomes, RAP can produce a large monthly payment. IBR may or may not be lower depending on loan balance, family size, poverty guideline, and the 10-year standard payment cap.
Interest Treatment
RAP includes important interest protections for borrowers who make required on-time payments. If the required payment does not cover monthly accrued interest, the Department’s rule text says the unpaid accrued interest is not charged for that month.
RAP also includes a principal-matching feature intended to ensure some principal reduction for on-time payers, subject to the rule details.
IBR interest treatment is different and generally less generous, especially after subsidy periods.
Forgiveness Timeline
RAP has a 30-year forgiveness timeline: 360 monthly payments over at least 30 years.
IBR can have a 20- or 25-year forgiveness timeline depending on borrower status. This can make IBR better for some borrowers even when the monthly payment is higher.
Which Plan Is Better?
RAP may be better if:
- you have dependents
- your payment would otherwise be unaffordable
- interest subsidy matters
- you are not eligible for better legacy options
IBR may be better if:
- you qualify for 10% IBR
- you want a shorter forgiveness timeline
- RAP’s AGI-based percentage creates a higher payment
- you are pursuing PSLF and IBR is the cleaner qualifying plan
Bottom Line
RAP and IBR use different math. RAP is based on AGI and dependents. IBR is based on discretionary income and borrower status. Neither is automatically better.
Run both before switching, especially if your income is above $50,000, you are married, you have dependents, or you are pursuing PSLF.
Related Reading
- SAVE Plan Ending in 2026
- Tiered Standard Repayment Plan 2026
- Should You Pay Student Loans or Invest in 2026?
Sources
- Federal Register public inspection, Reimagining and Improving Student Education final regulations
- U.S. Department of Education, Final rule announcement