RAP vs. IBR After SAVE: Which Student Loan Repayment Plan Could Fit Your Budget?

For borrowers replacing the discontinued SAVE Plan, the RAP vs IBR student loan repayment plan comparison begins with eligibility. RAP became available on July 1, 2026, and generally calculates payments as 1% to 10% of adjusted gross income, less $50 per claimed dependent, with a $10 monthly minimum. IBR generally uses 10% or 15% of income above 150% of the applicable poverty guideline and caps payments at the 10-year Standard amount. RAP may produce a lower payment at some incomes and offers stronger protection against unpaid interest, but its repayment period is 30 years. IBR may offer a 20- or 25-year period and can become less expensive at certain income levels. Loan type, disbursement dates, dependents, income, interest rate, and forgiveness goals can all change the result, so borrowers should compare personalized estimates rather than selecting a plan from the headline payment formula alone.

Key takeaways

• SAVE is no longer available following a March 10, 2026, court order, so affected borrowers must select another eligible repayment plan by the deadline in their servicer notice.
• RAP payments generally equal 1% to 10% of adjusted gross income divided by 12, minus $50 per dependent claimed on the borrower’s federal tax return, subject to a $10 monthly minimum.
• IBR payments generally equal 10% or 15% of discretionary income—AGI above 150% of the applicable poverty guideline—divided by 12 and cannot exceed the 10-year Standard payment.
• RAP has a 30-year repayment period, while IBR uses 20 years for qualifying newer borrowers and 25 years for other eligible borrowers.
• RAP waives monthly interest not covered by a full, on-time required payment and can provide a principal match of up to $50; IBR’s interest assistance is more limited.
• Eligible Direct Loan borrowers enrolled in autopay by September 30, 2026, can receive a temporary 1-percentage-point interest-rate reduction through June 30, 2028.

What changed after the SAVE Plan ended?

A federal court order ended SAVE on March 10, 2026, and the plan is no longer available. Borrowers enrolled in SAVE—or waiting on a SAVE application—must move to another repayment plan. Servicers are sending affected borrowers notices with individual selection deadlines, so the date in the borrower’s own notice controls. RAP became available on July 1, 2026, as a new income-driven repayment option. IBR remains available for many older eligible loans, but disbursement dates now matter. Direct and FFEL Program loans generally must have been disbursed before July 1, 2026, to qualify for IBR. RAP can cover eligible Direct Loans disbursed before or after that date. If all of a borrower’s loans were disbursed on or after July 1, 2026, RAP is the only available income-driven plan. Borrowers with older loans or a mix of disbursement dates may have additional choices. Consolidating loans on or after July 1, 2026, can also change repayment options, so borrowers should review the effect before submitting a consolidation application. Parent PLUS loans are not eligible for RAP or IBR, including certain consolidation loans that repaid parent PLUS debt. Rules for older parent-loan consolidations can be especially complex and should be confirmed through the federal Repayment Calculator and the loan servicer.

How the RAP student loan payment calculation works

RAP uses adjusted gross income rather than a discretionary-income calculation. The annual base payment is divided by 12, reduced by $50 for each dependent claimed on the borrower’s federal tax return, and subject to a $10 monthly minimum. The RAP base percentages are: – AGI of $10,000 or less: $120 annually before the dependent adjustment – More than $10,000 through $20,000: 1% of AGI – More than $20,000 through $30,000: 2% – More than $30,000 through $40,000: 3% – More than $40,000 through $50,000: 4% – More than $50,000 through $60,000: 5% – More than $60,000 through $70,000: 6% – More than $70,000 through $80,000: 7% – More than $80,000 through $90,000: 8% – More than $90,000 through $100,000: 9% – More than $100,000: 10% For example, a borrower with $45,000 of AGI and no dependents would have an estimated RAP payment of $150 per month: $45,000 × 4% ÷ 12. One claimed dependent would reduce that estimate to $100. These simplified examples do not account for joint tax returns, a spouse’s eligible federal debt, changes in income, or other application details. RAP lasts up to 30 years, or 360 qualifying monthly payments. A smaller required payment can improve near-term cash flow, but the longer potential term means borrowers should also compare total paid, payoff date, and any projected discharge—not only the first monthly bill.

How IBR calculates monthly payments

IBR generally calculates the payment as 10% or 15% of discretionary income divided by 12. For IBR, discretionary income is the amount by which AGI exceeds 150% of the poverty guideline for the borrower’s family size and location. The required payment cannot exceed the amount due under the 10-year Standard Repayment Plan. The 10% formula and 20-year repayment period generally apply to qualifying new borrowers associated with the July 1, 2014, cutoff. Other eligible borrowers generally pay 15% of discretionary income for up to 25 years. For a one-person household in the contiguous United States, the 2026 poverty guideline is $15,960, making 150% equal to $23,940. Using an AGI of $45,000, the illustrative monthly payment would be approximately $175.50 under 10% IBR or $263.25 under 15% IBR, before applying the 10-year Standard payment cap. IBR’s poverty-guideline deduction can make it more competitive as income rises, while RAP applies its percentage to total AGI. Family size also affects the plans differently: IBR adjusts the protected-income amount, whereas RAP subtracts $50 per dependent claimed on the tax return. Alaska and Hawaii have separate poverty guidelines, so their IBR estimates differ from examples using the contiguous-state figure.

IBR vs. RAP monthly payment examples

The following estimates assume a single borrower, no dependents, residence in the contiguous United States, 2026 poverty guidelines, and eligibility for 10% IBR. They exclude the IBR 10-year Standard payment cap and do not represent a loan-servicer quote. | AGI | Estimated RAP payment | Estimated 10% IBR payment | Lower formula estimate | |—|—:|—:|—| | $45,000 | $150.00 | $175.50 | RAP | | $70,000 | $350.00 | $383.83 | RAP | | $100,000 | $750.00 | $633.83 | IBR | These examples show why neither plan is automatically the lowest-payment option at every income. RAP’s progressive percentages may generate a lower bill within some income bands, while IBR’s deduction for 150% of the poverty guideline can produce a lower result at higher incomes. Borrowers subject to the older 15% IBR formula may see a larger payment difference in RAP’s favor. A Repayment Assistance Plan calculator should also incorporate loan balance, interest rates, spouse information, dependents, income growth, prior qualifying payments, and eligibility dates. The official federal Repayment Calculator can display estimated monthly payments, total principal and interest, projected discharge, and the end-of-term date using the borrower’s actual federal loan records.

Interest and repayment-period tradeoffs

RAP has two important balance protections for borrowers who make their full required payment on time. First, if the payment does not cover all interest that accrued for the month, the remaining monthly interest is subsidized. Second, if the borrower’s payment does not reduce principal by at least $50, the Department of Education can provide a matching principal payment so principal falls by an amount equal to the borrower’s payment, up to $50. IBR’s interest benefit is narrower. Interest assistance may apply to unpaid interest on subsidized loans during a limited qualifying period, while unpaid interest on other balances can continue to accumulate. Interest may also capitalize in certain circumstances, such as leaving IBR or no longer qualifying for an income-based payment. RAP’s balance protections do not necessarily make it the least expensive plan. Its maximum 30-year period is five to 10 years longer than IBR’s 20- or 25-year period. If income rises enough to generate larger payments, RAP could require more each month than IBR. Conversely, a borrower whose payment remains below monthly interest may value RAP’s interest waiver and principal match even if the scheduled term is longer. When comparing SAVE plan replacement options, consider four separate figures: the required monthly payment, estimated total paid, expected payoff or discharge date, and projected remaining balance. A plan with the lowest payment today may leave less room for other goals—or cost more over time—depending on income changes and how long the debt remains outstanding.

Temporary autopay interest reduction and next steps

Eligible borrowers with Federal Direct Loans originated after July 1, 2012, can receive a temporary 1-percentage-point interest-rate reduction by being enrolled in autopay by 11:59 p.m. Eastern Time on September 30, 2026. The temporary reduction began July 1, 2026, and continues through June 30, 2028. It replaces the usual 0.25-percentage-point autopay reduction during this period. Before enrolling, confirm that the bank account can reliably cover each withdrawal. An interest reduction can lower borrowing costs, but an overdraft fee or missed payment could offset part of the benefit. Also verify which loans qualify and when the reduction appears in the servicer account. Practical next steps: 1. Read the SAVE transition notice from the loan servicer and record the exact response deadline. 2. Log in to StudentAid.gov and check each loan’s type, disbursement date, balance, interest rate, and current status. 3. Use the federal Repayment Calculator to identify plans for which each loan is eligible. 4. Compare RAP and IBR under current income plus at least one higher- and lower-income scenario. 5. Review the monthly payment, total projected cost, term, interest treatment, and forgiveness assumptions. 6. Consider autopay before September 30, 2026, if eligible and compatible with the household’s cash-flow system. 7. Submit the selected plan request and monitor the servicer account until processing is complete. askForay can help borrowers organize these figures and compare scenarios, but it does not replace the federal eligibility determination, the servicer’s final payment calculation, or professional guidance for tax and legal questions.

FAQs

Sources

• Top FAQs About Income-Driven Repayment Plans — Federal Student Aid, U.S. Department of Education. Supports current RAP and IBR payment formulas, repayment periods, loan eligibility by disbursement date, SAVE’s unavailability, dependent adjustments, and use of the federal Repayment Calculator.
• U.S. Department of Education Announces Student Loan Interest Rate Reduction — U.S. Department of Education. Supports the September 30, 2026, autopay enrollment deadline, temporary 1% interest-rate reduction, June 30, 2028, end date, qualifying Direct Loan origination date, and RAP’s July 1, 2026, availability.
• Repayment Assistance Plan (RAP) — Edfinancial Services. Supports RAP’s AGI brackets, $50 dependent reduction, $10 minimum, 30-year term, unpaid-interest subsidy, principal matching benefit, and eligible loan types.
• Poverty Guidelines — Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. Supports the 2026 poverty guidelines used in the illustrative IBR calculations, including $15,960 for a one-person household in the contiguous United States.
• End of the SAVE Plan — MOHELA. Supports the March 10, 2026, SAVE court-order date, the requirement for affected borrowers to select a replacement plan, servicer-specific notices, and the temporary autopay reduction details.

Make your next money decision with confidence

Use askForay to organize student loan balances, compare RAP and IBR scenarios, and understand how payment, interest, and repayment-period tradeoffs could affect your budget.