Why this comparison matters now
For years, SAVE was the best income-driven repayment option for most borrowers — lower payments than IBR, interest subsidies, and faster forgiveness timelines. That's gone now. Borrowers leaving SAVE (and those with PAYE or ICR, which are also being phased out) need to pick between the two plans that will define student loan repayment going forward: IBR and RAP.
Under the One Big Beautiful Bill Act, new borrowers after July 1, 2026 are automatically on RAP. Existing borrowers can choose. The deadline to move off discontinued plans is July 1, 2028.
If you're on SAVE, PAYE, or ICR, you must switch to an eligible plan by July 1, 2028 or your servicer will move you to a Standard plan — likely with a much higher payment. Don't wait to make this decision.
IBR — Income-Based Repayment
IBR is the oldest and most established income-driven plan. It's still available to existing borrowers and will remain so indefinitely. Here's how it works:
- Payment: 10% of discretionary income if you're a "new borrower" after July 1, 2014; 15% if you borrowed before that date
- Discretionary income definition: AGI minus 150% of the federal poverty line for your family size
- Forgiveness: After 20 years (new borrowers) or 25 years (older borrowers)
- Interest: Interest can capitalize, meaning unpaid interest gets added to your principal balance if you leave the plan
- PSLF eligible: Yes
- Family size consideration: Strong — larger families get a bigger poverty line deduction, lowering payments significantly
RAP — Repayment Assistance Plan
RAP is the new plan created to replace SAVE. It uses a different payment structure — a sliding percentage of your AGI rather than a percentage of discretionary income:
- Payment: Roughly 1%–10% of AGI depending on your income tier (not discretionary income — your full adjusted gross income)
- Interest subsidy: If your payment doesn't cover the interest accruing, the government waives the difference — no interest capitalization
- Forgiveness: After 30 years (longer than IBR)
- PSLF eligible: Yes
- Family size consideration: A small per-dependent deduction, but less generous than IBR's poverty line calculation
- Minimum payment: RAP has a minimum monthly payment — unlike IBR, where payments can be $0
IBR wins when…
- You have a large family (bigger poverty line deduction = lower payment)
- Your income is moderate and your balance is high (seeking forgiveness)
- You want $0 payments when income drops (IBR can go to $0)
- You're 5+ years into IBR already — stay and keep your timeline
- You're pursuing PSLF and want the lower payment to count
RAP wins when…
- You're a new borrower after July 1, 2026 (it's your default plan)
- Your income fluctuates and you want interest protection
- You're worried about interest snowballing if you miss payments
- You have a small loan balance relative to income
- You're single with no dependents (family size matters less)
Side-by-side comparison
| Feature | IBR | RAP |
|---|---|---|
| Payment basis | % of discretionary income (AGI minus poverty line) | % of total AGI (tiered) |
| Payment range | 10–15% discretionary income | ~1–10% of AGI |
| $0 payment possible? | Yes | No (minimum payment required) |
| Interest protection | Limited — interest can capitalize on exit | Strong — excess interest waived |
| Forgiveness timeline | 20 or 25 years | 30 years |
| Family size benefit | Strong | Weak (small deduction only) |
| PSLF eligible | Yes | Yes |
| Available to new borrowers | No (existing borrowers only) | Yes (default for post-July 2026) |
| Forgiveness taxable? | Yes (2026+) | Yes |
The PSLF angle changes everything
If you work in public service and are pursuing PSLF, the plan comparison shifts dramatically. Since PSLF forgiveness is tax-free and comes after just 10 years, the goal is simple: minimize your monthly payment to maximize the amount forgiven.
Whichever plan gives you the lower payment — IBR or RAP — is the one to pick for PSLF. Run the numbers for your income and family size, because the answer isn't the same for everyone.
The real answer: run your numbers
IBR or RAP — the better plan depends on your income, family size, loan balance, and whether you're pursuing PSLF. For many borrowers, the difference in monthly payment can be $100–$300/month. That's real money over 10–25 years. The free LoanClear tool tells you which plan fits in about 60 seconds; the personalized report calculates your exact payment on each.
What to do right now
- If you're on SAVE, PAYE, or ICR — you need to switch before July 1, 2028. Start comparing IBR vs RAP for your situation now, not later.
- If you're on IBR already — don't switch unless RAP clearly beats your current payment. Staying on IBR preserves your existing forgiveness timeline.
- If you're a new borrower after July 1, 2026 — you'll default to RAP, but compare IBR if you're eligible and have a large family.
- Check PSLF eligibility — if you qualify, the plan choice becomes about minimizing payment, not maximizing forgiveness timeline.
The free LoanClear tool points you to the right plan in 60 seconds. For your exact monthly payment on IBR, RAP and every other plan you qualify for, get the personalized report.
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