IBR vs RAP: which monthly payment is lower?

The two formulas

IBR. Under 34 CFR 685.209(b)(1) and (f), the IBR payment is a share of discretionary income divided by 12: 15% for a borrower who is not a "new borrower", or 10% for a new borrower. For IBR the regulation defines new borrower as someone with no outstanding Direct or FFEL balance before July 1, 2014 (and none obtained on or after July 1, 2026). Discretionary income is adjusted gross income minus 150% of the federal poverty guideline for your family size. The monthly amount is capped at what you would have paid on the 10-year standard plan, based on the balances and rates when you started IBR. If your income is below 150% of the guideline, the formula gives $0.

RAP. The Repayment Assistance Plan uses a base payment set by AGI bracket, with no poverty-line subtraction: $120 a year for AGI up to $10,000, then 1% of AGI for AGI above $10,000 up to $20,000, 2% up to $30,000, and so on up to 9% for AGI above $90,000 up to $100,000 and 10% above $100,000. The monthly payment is that base divided by 12, minus $50 for each dependent, and never less than $10 (34 CFR 685.209(b)(2), (f)(5) and (g)(3)).

2026 poverty guideline used

For each additional person after 8, add $5,680 (48 states), $7,100 (Alaska) or $6,530 (Hawaii). These are the figures HHS published on January 15, 2026. A borrower who does not live in Alaska or Hawaii uses the 48-state figure, as the regulation provides.

Worked example

A single borrower with AGI of $60,000 and $40,000 of loans at 6.5%: discretionary income is $60,000 minus 1.5 × $15,960 = $36,060. IBR at 15% is $450.75 a month (just under the $454.19 10-year standard payment, so no cap). A new borrower at 10% pays $300.50. RAP is 5% of $60,000 divided by 12, $250.00. At this income RAP is lower. At $35,000 with a household of three and two dependents, discretionary income is zero, so IBR is $0 and RAP is $87.50 minus $100, which the $10 minimum raises to $10.

Where RAP wins and where IBR wins

The Department's regulatory impact analysis in the final rule (Table 3.4, a single borrower with no dependents, using the 2024 poverty line) showed IBR lower at the lowest incomes (for example $20 against $42 at $20,001 to $30,000), RAP lower in the middle (such as $325 against $353 at $60,001 to $70,000), and IBR lower again from about $70,000 up ($437 against $438 at $70,001 to $80,000, and $603 against $713 at $90,001 to $100,000). This calculator shows the same pattern with the 2026 guideline: RAP tends to be lower in the middle of the income range, IBR tends to be lower at the top, and at the very bottom IBR can be $0.

What else differs

• Forgiveness. IBR forgives the remaining balance after 240 qualifying payments (20 years) for a new borrower or 300 (25 years) otherwise; RAP requires 360 qualifying payments (30 years).
• Unpaid interest. Under RAP the Secretary does not charge interest that an on-time payment does not cover. Under IBR the government waives unpaid interest on Direct Subsidized Loans only for the first three consecutive years, and unpaid interest can capitalize in some cases.
• Who can use which. Only Direct Loans made before July 1, 2026 may be repaid under IBR; any Direct Loan borrower can use RAP. The older PAYE and ICR plans sunset on July 1, 2028.

Limits of this estimate

• It uses one AGI, one rate and one balance. Married-filing-separately borrowers, spousal loan debt, and parent PLUS consolidation loans have special rules not modelled here.
• Your servicer recalculates each year from your tax return or alternative documentation. See the RAP checker and the income-driven repayment estimator, and the PSLF progress planner if you work in public service.

FAQ

How is the IBR payment calculated?

It is 15% of discretionary income divided by 12, or 10% for a new borrower, where discretionary income is adjusted gross income above 150% of the poverty guideline. The payment is capped at the 10-year standard amount.

How is the RAP payment calculated?

RAP takes a base payment from your adjusted gross income bracket (1% to 10% of AGI, or $120 a year at or below $10,000), divides it by 12, subtracts $50 per dependent, and applies a $10 minimum.

Who is a new borrower under IBR?

For IBR, someone with no outstanding Direct or FFEL balance before July 1, 2014, and who obtains no new loan on or after July 1, 2026, or who had no balance when obtaining a loan between July 1, 2014 and July 1, 2026. New borrowers pay 10%.

Can I use IBR if I take new loans after July 1, 2026?

No. Only Direct Loans made before July 1, 2026 may be repaid under the PAYE, IBR and ICR plans. New-loan borrowers use RAP or the Tiered Standard plan.

How long until forgiveness under each plan?

IBR forgives after 240 qualifying payments (20 years) for a new borrower, or 300 payments (25 years) otherwise. RAP forgives after 360 qualifying payments (30 years).

Does unpaid interest grow under RAP?

Under RAP the Secretary does not charge accrued interest that is not covered by your on-time monthly payment. Under IBR the unpaid interest on subsidized loans is waived for only the first three consecutive years.

Which poverty guideline does this use?

The 2026 HHS guideline published January 15, 2026: $15,960 for one person in the 48 states and D.C., with separate Alaska and Hawaii figures. Borrowers outside Alaska and Hawaii use the 48-state figure.

Sources

Retrieved 2026-11-02. Each link was opened and checked against the claim next to it.

• 34 CFR 685.209, Income-driven repayment plans (eCFR, current to 2026-10-29): IBR and RAP formulas, new-borrower definition, interest treatment, forgiveness timelines, plan eligibility
• Federal Register, Annual Update of the HHS Poverty Guidelines (January 15, 2026): 2026 poverty guideline figures
• Federal Register, Reimagining and Improving Student Education final regulations (May 1, 2026): Table 3.4 comparison of IBR and RAP payments and the Department's explanation of the new plan