With SAVE terminated and RAP now the only income-driven option for federal loans disbursed on or after July 1, 2026, many borrowers are comparing a plan they have never used against one they may have relied on for years.
The two do not merely use different percentages. They measure ability to pay in structurally different ways, and that is what produces winners and losers rather than a uniform increase or decrease.
How IBR measures ability to pay
Income-Based Repayment starts from discretionary income: your adjusted gross income minus 150% of the federal poverty guideline for your household size and state.
That subtraction is the heart of the plan. It exempts a floor of income entirely before any percentage applies, and the floor grows with household size, because the poverty guideline itself does.
Which version of IBR you are on depends on when you first borrowed. Borrowers whose first loans predate July 1, 2014 are on the older terms: 15% of discretionary income, with forgiveness after 25 years. Borrowers who first took loans on or after that date pay 10%, with forgiveness after 20 years.
Both versions cap the payment at what a standard 10-year repayment schedule would cost, so IBR can never be more expensive than simply paying the loan off over ten years.
How RAP measures ability to pay
RAP skips the poverty-line step entirely and applies a percentage directly to your full AGI, in $10,000 bands.
Below $10,000 of AGI, the payment is a flat $10 a month. From there each band adds a percentage point: 1% from $10,000 to $20,000, 2% from $20,000 to $30,000, and so on up to 10% for AGI above $100,000.
Dependents reduce the monthly payment by a flat $50 each, and the payment never falls below the $10 floor.
There is no cap at the standard 10-year payment. For most borrowers that is irrelevant, but for a high earner with a small balance it means RAP can charge more than a straightforward 10-year payoff would.
Where the crossover falls
Because one plan exempts a floor and the other does not, the comparison flips as income and household size change.
Take a single borrower with $35,000 of AGI and no dependents. Under RAP they fall in the 3% band: $1,050 a year, about $88 a month. Under new IBR, with 150% of the poverty guideline for a household of one subtracted first, the remaining discretionary income is far smaller, and 10% of it produces a noticeably lower payment.
Now take a borrower with $120,000 of AGI and no dependents. RAP applies 10% to the full amount: $12,000 a year, about $1,000 a month. New IBR subtracts the poverty floor for one person and charges 10% of the remainder, which produces a somewhat lower figure — though for a borrower with a modest balance, IBR's standard-payment cap may bind first and cut it further.
The pattern that emerges: IBR's advantage is largest at low incomes and large household sizes, precisely where the poverty-guideline deduction shields the most. RAP narrows the gap as income rises, because the exempted floor becomes a smaller share of a larger AGI.
The dependent adjustment is the sharpest difference
RAP gives a flat $50 per month per dependent. IBR gives nothing explicitly per dependent — instead, household size raises the poverty guideline, which raises the exempt amount, which lowers the payment.
The IBR mechanism scales. A larger household exempts substantially more income before the percentage applies, and the benefit compounds with each additional member.
RAP's $50 is fixed regardless of income or of how many other dependents you have. For a borrower with three children, IBR's treatment is generally far more generous than $150 a month.
This is the single factor most likely to determine which plan is cheaper for a given family, and it is the one most often overlooked when comparing headline percentages.
The offsetting advantage
RAP has one feature IBR does not, and it is not a small one: the balance shrinks every month you make the required payment. If the payment falls short of accrued interest, the government covers the gap.
IBR provides no general equivalent. A borrower with a large balance and a modest income can make every payment on time for a decade and owe more than they started with, which is corrosive both financially and psychologically.
So the comparison is not purely about the monthly number. A slightly higher RAP payment that guarantees a falling balance may be worth more than a slightly lower IBR payment that does not — particularly for someone unlikely to reach forgiveness, since a growing balance under IBR only matters if you eventually have to repay it.
For a borrower confident of reaching forgiveness, the calculus reverses: minimizing payments matters more, and the balance trajectory in the meantime matters less.
How to actually decide
Get your AGI from your most recent return and your household size as your servicer counts it. Compute the RAP figure from the band table, subtracting $50 per dependent. Compute the IBR figure from discretionary income at 10% or 15% depending on when you first borrowed, and check whether the standard-payment cap binds.
Then weigh three things beyond the monthly payment: whether you expect to reach forgiveness, whether a growing balance would affect decisions you need to make in the meantime, and how stable your income is — because a plan that is cheaper at today's AGI may not be at next year's.
Federal Student Aid's loan simulator will run these against your actual loan data, which is more reliable than any generic comparison including this one. And if you are pursuing Public Service Loan Forgiveness, confirm qualifying-payment treatment under each plan with your servicer directly before switching.