IBR vs. RAP: Which Repayment Plan Is Best for You?

Income-Based Repayment (IBR) and the Repayment Assistance Plan (RAP) both tie your federal student loan payments to your income, but they calculate payments and treat unpaid interest differently. 

IBR may be the better choice if it offers you a lower payment or a shorter timeline to forgiveness. RAP may make more sense if you have many years left in repayment and want to prevent unpaid interest from increasing your balance.

The right plan depends on your income, family size, loan eligibility, monthly payment and time left until forgiveness. 

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What is Income-Based Repayment (IBR)?

Income-Based Repayment (IBR) is an income-driven repayment plan for federal student loans. It remains available to borrowers who don’t have any new federal student loans disbursed on or after July 1, 2026.

Your monthly payment on IBR is based on your income and family size and won’t exceed what you would pay under the 10-year Standard Repayment Plan.

• Borrowers with loans disbursed on or after July 1, 2014: Payments are generally 10% of discretionary income, with forgiveness after 20 years of qualifying payments.
• Borrowers with loans disbursed before July 1, 2014: Payments are generally 15% of discretionary income, with forgiveness after 25 years of qualifying payments.

For IBR, discretionary income is the difference between your adjusted gross income and 150% of the federal poverty guideline for your family size and state of residence.

What is the Repayment Assistance Plan (RAP)?

The Repayment Assistance Plan (RAP) is a new income-driven repayment plan created by the One Big Beautiful Bill Act. It’s the only income-driven option for borrowers with federal loans disbursed on or after July 1, 2026, though borrowers with older loans can also enroll.

Under RAP, monthly payments range from 1% to 10% of your adjusted gross income, depending on how much you earn. For example, if you earn $15,000 per year, your payment is based on 1% of your adjusted gross income. Your payment is also reduced by $50 per month for each dependent you claim on your tax return.

RAP includes protections that help prevent your balance from growing. If your payment doesn’t cover all the interest that accrues, the unpaid interest won’t be added to your balance. If your payment reduces the principal by less than $50, the government will make an additional principal payment so your balance falls by at least $50 that month.

Any remaining balance is eligible for forgiveness after 30 years of qualifying payments.

However, borrowers must make their payments on time to receive RAP’s monthly benefits. 

“If a borrower is late by even just one day, the loan payment does not count toward forgiveness,” says Mark Kantrowitz, a nationally recognized financial aid expert. “The borrower will also lose the interest waiver and principal match for that month.”

Which plan should you choose?

Choosing between IBR and RAP comes down to more than which plan offers the lowest monthly payment. 

“When deciding which repayment plan for your student loans is right for you, borrowers should weigh the monthly payment, total repayment timeline, and how much interest they will pay over the life of the loan,” says Leslie Tayne, debt resolution attorney at Tayne Law Group. 

When to choose IBR

IBR may be a better fit if:

• You want a shorter timeline to forgiveness: IBR offers forgiveness after 20 or 25 years, compared with 30 years under RAP.
• Your payment would be similar under both plans: If the monthly cost is close, IBR may help you reach forgiveness sooner.
• You’re already close to forgiveness: RAP’s interest protections may not be worth extending your repayment timeline.
• You support people who aren’t tax dependents: IBR uses a broader family-size definition, which could result in a lower payment.

When to choose RAP

RAP may be a better fit if:

• It gives you the lowest monthly payment: RAP may produce lower payments for some borrowers, particularly those with lower incomes.
• You have many years left in repayment: RAP’s interest protections may help keep your balance from growing over time.
• Your payments don’t cover the full monthly interest: “An attractive benefit of the RAP plan is that it stops your balance from growing out of control if your calculated payment doesn't cover the monthly interest,” says Tayne.
• You want help reducing your principal: RAP may provide a matching principal payment when your required payment doesn’t reduce your balance by at least $50. “In these cases, the government actually wipes out the rest and throws in a matching subsidy to help chip away at what you owe,” Tayne says.

How can borrowers switch plans?

Borrowers enrolled in PAYE or ICR will need to choose a new repayment plan before those plans end on July 1, 2028. Your repayment options depend on the types of loans you have:

• Borrowers with student loans on PAYE or ICR: You can switch to IBR by July 1, 2028, if you qualify. Otherwise, you’ll be moved to the RAP when your current plan ends.
• Parent PLUS borrowers on ICR: If you consolidated your parent PLUS loans into a Direct Consolidation Loan, you’ll be moved to IBR unless you choose another eligible plan by the deadline.
• Borrowers who switch to IBR: You can remain on IBR or later move to RAP if your loans qualify.

You can change repayment plans online at StudentAid.gov or by contacting your loan servicer.

Learn More: How To Change Your Student Loan Repayment Plan