RAP vs IBR vs Standard: Which Plan Costs Less

For federal student loans in 2026 there are three repayment families that matter: the Repayment Assistance Plan (RAP), Income-Based Repayment (IBR) and the Standard plans. RAP, created by the One Big Beautiful Bill Act, charges 1% to 10% of your total adjusted gross income depending on the AGI bracket, with a $10 monthly floor, a $50 reduction per dependent child, and forgiveness after 360 qualifying payments (30 years). IBR charges 10% of discretionary income (15% for pre-2014 borrowers) where discretionary income is AGI above 150% of the federal poverty line, with forgiveness after 20 or 25 years. Standard repayment ignores income: the classic plan amortizes the balance over 10 years, and the new Tiered Standard plan for loans made on or after July 1, 2026 sets the term from 10 to 25 years by balance.

The practical difference is where the payment comes from. RAP looks at your whole AGI, so a raise that crosses a bracket boundary can lift the payment on every dollar, not just the extra ones. IBR only looks at income above the poverty-line cushion, so a family of four with a modest salary can owe $0 under IBR while owing a real payment under RAP. Standard is the only family where the payment is fixed and the loan is guaranteed to be gone at the end of the term.

Prosperics' free Federal Student Loan Calculator (prosperics.com/student-loan-rap-calculator) runs all three side by side from five inputs: AGI, filing status, balance, weighted rate and loan type.

Low income, high balance: IBR usually produces the lowest payment because the 150%-of-poverty-line deduction removes most or all discretionary income, whereas RAP's percentage applies to gross AGI from the first dollar above the floor. If you are already enrolled in IBR, switching to RAP rarely lowers the payment at this end.

Middle income ($60,000–$120,000 AGI), high balance: this is the zone where RAP and IBR trade places. RAP's bracket rate (roughly 5%–8% here) applied to total AGI often lands close to IBR's 10% of discretionary income. Dependents tilt toward RAP because the $50-per-child reduction is a flat dollar cut, while IBR's household-size adjustment only widens the poverty-line cushion. Married borrowers filing separately tilt toward IBR, which counts only the borrower's income.

High income or balance under roughly 1.5× salary: Standard repayment wins on total cost. Income-driven payments at these incomes often exceed the 10-year Standard payment anyway, and Standard never accrues the 20- to 30-year interest tail. Borrowers on track for Public Service Loan Forgiveness are the exception: they want the lowest qualifying payment for 120 months, which is usually RAP or IBR.

Run your own numbers rather than trusting the pattern: a $1 raise that crosses a RAP bracket can add more to the annual payment than the raise itself, and the calculator flags the next threshold.

Three details decide whether the cheaper-looking plan is actually cheaper. First, forgiven balances outside PSLF may be taxable as income in the year of discharge; a $60,000 balance forgiven after 25 years can create a five-figure federal tax bill, so a plan that forgives more is not automatically better. Second, RAP's cliff effect: because each bracket rate applies to all AGI, crossing from one bracket to the next can raise the annual payment by several hundred dollars overnight, which matters for anyone negotiating a raise or deciding how much to contribute pre-tax to a 401(k). Third, eligibility is asymmetric. Parent PLUS loans and consolidations that repaid Parent PLUS debt cannot use RAP; PAYE and ICR closed to new enrollment on July 1, 2026; and borrowers with a new Direct Loan on or after that date are generally limited to RAP or Tiered Standard.

Interest treatment also differs. RAP waives unpaid interest when your payment does not cover it and adds a small principal match, so the balance does not balloon; IBR can capitalize interest in some situations. Before switching, confirm with your servicer how your qualifying-payment count carries over and whether capitalization is triggered.

The Prosperics calculator labels each plan Not Eligible with the specific reason for your inputs, shows time-to-forgiveness versus payoff timeline, and estimates the forgiveness tax so the comparison is on total cost, not just the monthly number.