If your loans predate 1 July 2026 you can still choose between RAP and IBR. Most coverage treats RAP as the automatic answer because it’s the new plan. For monthly cost, it usually isn’t.
The short version: IBR subtracts a poverty threshold before applying its rate, and RAP doesn’t. That single structural difference decides most cases.
The two formulas side by side
IBR (for loans first disbursed on or after 1 July 2014):
(AGI minus 150% of the poverty line for your household) x 10%, divided by 12
RAP:
(Your entire AGI x a rate from 1% to 10%), divided by 12, minus $50 per child
The poverty line for one person in the lower 48 states in 2026 is $15,960. So IBR protects $23,940 of income before charging anything. RAP protects nothing.
Worked comparison
Single borrower, no children, lower 48 states, $45,000 balance at 6.8%.
| Income | IBR monthly | RAP monthly | Cheaper |
|---|---|---|---|
| $30,000 | $50.50 | $50.00 | RAP, barely |
| $40,000 | $133.83 | $100.00 | RAP |
| $50,000 | $217.17 | $166.67 | RAP |
| $60,000 | $300.50 | $250.00 | RAP |
| $70,000 | $383.83 | $350.00 | RAP |
| $80,000 | $467.17 | $466.67 | Level |
| $90,000 | $550.50 | $600.00 | IBR |
| $110,000 | $717.17 | $916.67 | IBR |
That table probably surprises you, and it’s worth being precise about why, because the popular framing that “RAP is always more expensive” is wrong.
Below roughly $80,000, RAP is usually cheaper for a single borrower. RAP’s low bands (1% to 6%) are small enough that applying them to the whole income still produces less than 10% of income above $23,940.
Above roughly $80,000, IBR takes over. RAP’s rate climbs to 8%, 9% and 10% while IBR stays at a flat 10% of a reduced base. The crossover moves with household size.
Household size shifts the crossover
Add dependants and IBR’s protected amount grows, while RAP only subtracts a flat $50 per child. Same borrower, household of four ($15,960 + 3 x $5,680 = $32,000 poverty line, so IBR protects $48,000):
| Income | IBR monthly | RAP monthly (2 children) | Cheaper |
|---|---|---|---|
| $50,000 | $16.67 | $66.67 | IBR |
| $60,000 | $100.00 | $150.00 | IBR |
| $70,000 | $183.33 | $250.00 | IBR |
| $90,000 | $350.00 | $500.00 | IBR |
With a larger household, IBR wins almost everywhere. The bigger poverty-line deduction beats a flat $50 per child comfortably.
This is the single most useful rule in this article: the more people in your household, the more likely IBR is your cheaper option.
Where RAP wins on something other than payment
Monthly cost isn’t the only axis.
Your balance can’t grow on RAP. Unpaid interest is waived rather than capitalized, and $50 of principal is credited each month. IBR has no equivalent protection for unsubsidized loans, so on IBR a low payment against a large balance can mean the balance climbs for years. If you owe $150,000 on $45,000 of income, that protection may be worth more to you than $60 a month.
RAP has a $10 floor. IBR can calculate to $0 for very low incomes, which sounds better and sometimes is. But a $0 payment still counts as a qualifying payment on both plans, so this rarely decides anything.
Where IBR wins on something other than payment
Forgiveness comes far sooner. IBR forgives after 20 years for loans from July 2014 onward, or 25 years for older loans. RAP takes 30. On a balance heading for cancellation, ten fewer years of payments is an enormous difference that no monthly comparison captures.
Take the household-of-four borrower at $60,000. IBR costs $100 a month against RAP’s $150, and forgives ten years earlier. There’s no dimension on which RAP wins there.
The partial financial hardship gate is gone. IBR used to require you to demonstrate hardship to enroll. That requirement has been removed, so IBR is open to borrowers who were previously shut out of it.
How to decide
Work through these in order.
- Are you going for PSLF? Both plans qualify. Pick whichever has the lower payment, because on a PSLF track a lower payment simply means more gets forgiven, tax free. Do not overpay.
- Do you have a household of three or more? Lean IBR. The poverty-line deduction scales with household size and the RAP dependant credit doesn’t.
- Is your income above about $80,000 as a single filer? Lean IBR.
- Is your balance very large relative to your income? Lean RAP for the interest waiver, unless IBR forgiveness arrives so much sooner that it outweighs it.
- Otherwise, below $80,000 as a single filer, RAP is probably cheaper monthly. Check how much of your balance would be forgiven under each before committing.
The trap to avoid
Don’t consolidate to “simplify” while you’re deciding. A consolidation completed on or after 1 July 2026 locks the whole balance into RAP and the Tiered Standard Plan. IBR disappears as an option permanently. If IBR might be your cheaper plan, consolidating first is an expensive way to find out.
Run your own numbers
The tables above use one balance and one interest rate. Yours differ, and the crossover point moves with household size, region and dependants. The plan comparison runs both plans, and six others, month by month with your figures.
Frequently asked questions
Is IBR still available in 2026? Yes, for borrowers whose loans predate 1 July 2026. Loans taken out or consolidated on or after that date can use only RAP and the Tiered Standard Plan.
Can I switch from RAP to IBR later? Generally yes, if you remain eligible for IBR. But if you consolidate in the meantime you lose IBR access permanently, so don’t consolidate casually.
Which forgives sooner? IBR, by a wide margin. 20 years for loans from July 2014 onward, or 25 for older ones, against 30 for RAP.
Does IBR have RAP’s interest waiver? No. That’s RAP’s main structural advantage. On IBR, unpaid interest on unsubsidized loans can capitalize and grow your balance.
Which is better for PSLF? Both qualify. Choose whichever produces the lower payment, since the remainder is forgiven tax free at 120 payments either way.
What if I have loans from before July 2014? Older IBR applies: 15% of discretionary income with forgiveness at 25 years. That higher rate makes RAP more competitive, so compare carefully rather than assuming.