RAP vs IBR (2026 rules): which repayment plan is cheaper?
How RAP works
The Repayment Assistance Plan (RAP) launched July 1, 2026. Your payment is a percentage of your total adjusted gross income (AGI) on a sliding scale — from 1% at low incomes up to 10% once you earn over about $100,000 — reduced by $50 per dependent child. There is no payment cap, so the payment keeps rising with income. Its key benefit: RAP waives unpaid interest, so the balance doesn’t snowball. Forgiveness comes after 30 years, or 120 payments under PSLF.
How IBR works
Income-Based Repayment (IBR) charges 10% of your discretionary income if you’re a “new borrower” (no federal loan balance as of July 1, 2014 — which describes most current residents and attendings), or 15% otherwise. Discretionary income is your AGI minus 150% of the federal poverty line for your family size. Critically, IBR is capped at the standard 10-year payment, so it can never exceed the standard amount. Forgiveness comes after 20 years for new borrowers (25 for older borrowers), or 120 payments under PSLF.
RAP vs IBR at a glance
| Feature | RAP | IBR (new borrower) |
|---|---|---|
| Payment | 1–10% of total AGI | 10% of discretionary income |
| Payment cap | None | 10-year Standard payment |
| Unpaid interest | Waived | Accrues |
| Per-child reduction | −$50/child | — |
| Forgiveness term | 30 years | 20 years |
| PSLF-eligible | Yes (120 payments) | Yes (120 payments) |
| Switch back to Standard | No | Yes |
Who each plan favors
IBR tends to win for high earners with a moderate balance, because the 10-year Standard cap freezes the payment while RAP’s keeps climbing. A $300k attending can hit that cap.
RAP tends to win in low-income years (residency, fellowship, a non-working spouse) and when the balance is large relative to income, because the interest waiver stops the balance from growing.
The PSLF angle
If you’re pursuing PSLF, both RAP and IBR generate qualifying payments — so you usually want whichever produces the lowest payment for 120 months, since the remaining balance is forgiven tax-free anyway. For most trainees that’s IBR; confirm on your numbers. Two one-way doors: PAYE and ICR are being phased out by 2028, making IBR the durable choice; and once you’re on RAP you cannot switch back to the standard plan.
Frequently asked questions
Is RAP or IBR better for PSLF?
For PSLF you generally want the lowest monthly payment over your 120 qualifying payments, because the remaining balance is forgiven tax-free regardless of plan. For most residents and many attendings that is IBR, but it depends on your income and balance, so model both.
Is the new IBR the same as PAYE?
No. PAYE and ICR are being phased out by 2028, while IBR is staying, which is why IBR is the durable income-driven plan. New-borrower IBR uses 10% of discretionary income with a 20-year forgiveness term.
Can I switch from RAP back to the standard plan?
No. Once you enroll in RAP you cannot return to the standard plan, so model the long-term cost before choosing it.
Does RAP really have no payment cap?
Yes. RAP is a straight percentage of total income with no ceiling, so a high earner's RAP payment can exceed the 10-year standard amount, which is exactly why IBR's cap can make IBR cheaper at attending income.
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