IBR vs. RAP: How These Repayment Assistance Programs Compare

Income-driven repayment plans provide important financial relief for people who struggle to pay student loan bills. Currently, there are multiple options for income-driven repayment (IDR), including Income-Based Repayment (IBR), which has been available since 2009.

The “One, Big, Beautiful Bill Act,” signed into law in July 2025, makes major changes to IDR options, though. Starting in July 2026, new federal student loans will no longer be eligible for the existing plans. Instead, borrowers will repay under a new plan called the Repayment Assistance Plan (RAP).

New borrowers will have RAP as their only income-driven option, while borrowers who are already on IBR — or who switch to it before July 1, 2028 — can keep paying under IBR or move to RAP. If you have this option, you'll need to decide if IBR vs. RAP is right for you.

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What is Income-Based Repayment (IBR)?

IBR is a long-standing income-driven repayment option available to borrowers with federal student loans.

Borrowers under the IBR plan make payments equal to:

• 10% of discretionary income if they first borrowed after July 1, 2014
• 15% of their discretionary income if they borrowed before July 1, 2014

IBR caps your payments so they’re never more than payments under the standard 10-year repayment plan.  However, to qualify for IBR, your monthly payment must be lower than it would be under the Standard Repayment Plan with a 10-year payoff timeline. The “One, Big, Beautiful Bill Act” eliminates financial hardship requirements for IBR.

When you’re enrolled in IBR, you’ll make payments for a period of 25 years if you borrowed before July 2014 or for 20 years if you borrowed after July 2014, and the remaining balance of your loan will be forgiven after you complete your required 20 or 25 years.

IBR is currently available to federal student loan borrowers, but it won’t be open to new borrowers who take out loans on or after July 1, 2026. After that date, new loans will only be eligible for the new Repayment Assistance Plan (RAP) or the Standard Repayment Plan.

If your loans were made before July 1, 2026, you can still enroll in IBR so long as you do so by July 1, 2028, and don’t take out any new loans after July 2026.

After July 1, 2028, IBR will be the only one of the existing income-driven repayment plans (like SAVE, PAYE, and ICR) that remains available for older loans.

What is the Repayment Assistance Plan (RAP)?

The Repayment Assistance Plan will be available for loans disbursed on or after July 1, 2026. It will be the only IDR plan available to new borrowers, and it combines the features of income-driven plans and hardship relief.

RAP shares its name and abbreviation with a similar Canadian student loan repayment plan, but the U.S. version is only available to borrowers who take out loans from the U.S. Department of Education. 

RAP caps payments at a percentage of income, but uses a different process from IBR to calculate income.

“IBR is based on a percentage of discretionary income, while RAP is based on a percentage of income,” explains Mark Kantrowitz, an author and financial aid expert. Specifically, RAP uses adjusted gross income (AGI) and subtracts $50 per dependent child. 

The percentage of income you pay also differs. “One change that would impact borrowers includes monthly payments that would be based on a percentage of adjusted gross income from 1 to 10%,” says  Steve Azoury, a chartered financial consultant (ChFC) and owner of Azoury Financial. There is also a $10 minimum payment, regardless of earnings. 

A major benefit of RAP is that it subsidizes interest. If your payment doesn’t cover the total interest costs, the unpaid interest is forgiven instead of being added to your loan balance. If your monthly payment under RAP brings your principal balance down by less than $50 monthly, the government issues a matching payment to ensure your principal goes go down by at least $50.

On the other hand, you must make 30 years of qualifying payments on RAP before you become eligible for loan forgiveness. Under current IDR plans, many borrowers can reach forgiveness after about 20 to 25 years.

IBR vs. RAP: What’s the difference?

RAP and IBR differ in terms of eligibility, monthly payment amounts, and timeline to loan forgiveness. The table below shows some of the key differences between the two plans. 

Who should consider IBR or RAP?

You should consider IBR if you borrowed before July 2026. You won’t be eligible for this payment option if you borrow after that time. You'll also need to understand how monthly payments and total costs compare under IBR vs. RAP when deciding between the two options. 

Kantrowitz explains that low- and moderate-income borrowers (generally those earning $75,000 or less) may have larger monthly payments under IBR than RAP, but their total payment costs would be higher over time than with RAP. 

If you borrow after July 2026, you’ll need to repay your loans using either RAP or a new federal standard repayment plan. RAP can offer affordable monthly payments and loan forgiveness, as well as subsidized interest. But be aware you’ll be in debt for longer and usually pay more than under the Standard Repayment Plan. 

With RAP eliminating other income-driven payment options, eligibility is broader, and selecting and applying for this income-driven plan may be simpler than under the current system. However, you’ll have fewer options to customize your payoff plans. 

How to apply for IBR or RAP

You can apply for IBR via the student aid income-driven repayment plan website. You’ll need to provide details on your finances or authorize the Department of Education to access IRS data. 

RAP is not available yet, but the application process is likely to be similar. You’ll need to provide income and family size verification for RAP, just as you do for current IDR plans.

If you’re on any IDR plan except for IBR, you'll be moved automatically to RAP most likely beginning July of 2028.