RAP vs IBR: what each formula charges on the same income
Two published formulas on one income figure: RAP's banded percentage of the whole AGI against IBR's 15% above 150% of the poverty guideline.
Both figures are monthly, before any interest or balance is considered. Use the adjusted gross income from your most recent federal return — that is the number every income-driven plan reads.
Two things are missing on purpose. IBR also caps the payment at what you would have paid on the 10-year Standard plan, and that needs your balance — so a high income against a small balance can make IBR cheaper than the number above. And whether you may choose IBR at all turns on when your loans were disbursed, not on your income.
IBR gives the household a poverty allowance before it takes a percentage. RAP does not: it takes a percentage of the whole AGI and then credits $50 a month per dependent. The two columns on the right are a household of four with two dependents claimed.
| AGI | RAP, one person | IBR 15%, one person | RAP, family of four | IBR 15%, family of four |
|---|---|---|---|---|
| $20,000.00 | $16.67 | $0.00 | $10.00 | $0.00 |
| $40,000.00 | $100.00 | $200.75 | $10.00 | $0.00 |
| $60,000.00 | $250.00 | $450.75 | $150.00 | $131.25 |
| $80,000.00 | $466.67 | $700.75 | $366.67 | $381.25 |
| $100,000.00 | $750.00 | $950.75 | $650.00 | $631.25 |
Read the first two columns against each other and then the last two. At the bottom of the income range IBR reaches $0 and RAP cannot go below $10. Higher up, the family columns cross: RAP's $50 per dependent is worth less than the poverty allowance IBR subtracts first.
Two plans, one income figure, two answers. That is the whole reason this page exists: the monthly number a borrower is quoted comes from a formula, and the two formulas in the current menu measure income in structurally different ways.
Enter one number — your adjusted gross income — and the tool shows both. Nothing else changes between the two columns.
The two structures
RAP takes a percentage of your entire AGI, in $10,000 bands: 1% between $10,000 and $20,000, 2% between $20,000 and $30,000, and so on up to 10% above $100,000. At or below $10,000 the base is a flat $120. It then divides by twelve and subtracts $50 a month for each dependent claimed on your federal return, with a floor of $10.
IBR takes 15% of the income above 150% of the poverty guideline for your household — 10% if you are a “new borrower” in the regulation’s sense — with no floor, no dependent credit, and a cap at what you would have paid on the 10-year Standard plan.
So IBR gives the household an allowance before it takes anything. RAP gives the individual a credit after it has taken everything. Which one is cheaper is therefore not a matter of taste: it depends on your income, how many people the household contains, and how many of them you claim.
The table in the tool makes the crossing visible. A single person with $60,000 of AGI pays $250 under RAP and $450.75 under IBR. A family of four with the same income and two dependents claimed pays $150 under RAP and $131.25 under IBR — the ranking has flipped, because 150% of the four-person guideline is a larger subtraction than two credits of $50.
What this page leaves out, on purpose
- The IBR cap. A borrower with a high income and a small balance can be capped below the formula’s answer. That needs your balance, which is why it is not in the calculation.
- Whether you may choose either plan. That turns on disbursement dates, loan type and default status — not on income. A consolidation loan disbursed today is a new loan, and the menu narrows.
- Forgiveness. RAP runs on 360 payments over at least 30 years; IBR on 240 or 300 depending on borrower status. Neither clock is modelled here, and the tax treatment of a forgiven balance is a separate question from the monthly payment.
- What the payment does to the balance. RAP’s rules on unpaid interest and the matching principal payment are real, and they are not part of a monthly-payment comparison.
The full rules, the closing dates for PAYE and ICR, and the reason SAVE is no longer on the menu are in The repayment menu was rebuilt on July 1, 2026. The poverty figures these thresholds are computed from are the 2026 HHS guidelines, and the formulas are the ones in 34 CFR 685.209 as revised by the final rule effective that July.
One practical warning the article makes and this page inherits: a lower payment is not automatically free money. On a 30-year track, every dollar avoided now is a dollar added to the balance that is later forgiven — and forgiven balances are, under the current rules, generally taxable income unless a specific exception applies.
Frequently asked questions
- Why does RAP charge more at exactly the same income?
- Because the two formulas measure income differently. RAP takes a percentage of your whole adjusted gross income and then credits $50 a month per dependent, with a $10 floor. IBR subtracts 150% of the poverty guideline for your household first, and takes 15% (or 10% for a new borrower) of what is left. A household allowance and a per-dependent credit are not the same thing, which is why the ranking flips with household size.
- Is the figure from this page my actual payment?
- No. It is the formula applied to the figures you entered. Your servicer applies it to the AGI on the return it reads, and IBR is also capped at what you would have paid on the 10-year Standard plan — a cap this page cannot compute without your balance.
- Why does the RAP number jump when my income crosses a round number?
- Because the percentage applies to the entire AGI rather than to the margin above a threshold. Crossing from the 2% band to the 3% band reprices every dollar below the line, not just the dollars above it: at $30,000 of AGI the payment is $50.00, and at $30,001 it is $75.00.
- Can I choose either plan?
- Not necessarily. Since July 1, 2026 the menu turns on when your loans were disbursed. A borrower who receives a first disbursement on a new loan on or after that date loses IBR, ICR and PAYE, and the choice narrows to RAP or the Tiered Standard plan. Parent PLUS loans are never eligible for RAP, and defaulted loans are not eligible for any income-driven plan.
Sources
- 34 CFR 685.209 — Income-driven repayment plans, as revised by the final rule effective July 1, 2026: the IBR applicable amount of 15 percent, or 10 percent for a new borrower, of AGI above 150 percent of the poverty guideline at (b)(1)(i)–(ii); the RAP base payment table by AGI band at (b)(2); the RAP monthly payment as base payment divided by 12 minus $50 per dependent at (f)(5); and the $10 minimum at (g)(3)(ii) (ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685/subpart-B/section-685.209)
- Federal Student Aid (StudentAid.gov) — 'Top FAQs About Income-Driven Repayment Plans': the RAP payment formula and the $10 minimum, IBR at 15 percent with a 10 percent new-borrower rate and a cap at the 10-year Standard payment, and the rule that parent PLUS loans are never eligible for RAP (studentaid.gov/articles/faqs-idr-plan)
- Department of Health and Human Services — 'Annual Update of the HHS Poverty Guidelines', published January 15, 2026, 91 Fed. Reg. 1797: $15,960 for a household of one, $21,640 for two, $27,320 for three and $33,000 for four in the 48 contiguous states and the District of Columbia, which is what the 150 percent thresholds in the IBR formula are computed from (federalregister.gov/documents/2026/01/15/2026-00755/annual-update-of-the-hhs-poverty-guidelines)
- Department of Education — 'Reimagining and Improving Student Education—Federal Student Loan Program Final Regulations', final rule published May 1, 2026, 91 Fed. Reg. 23768, effective July 1, 2026 (federalregister.gov/documents/2026/05/01/2026-08556/reimagining-and-improving-student-education-federal-student-loan-program-final-regulations)
- Federal Student Aid (StudentAid.gov) — 'Federal Student Loan Repayment Plans': the Tiered Standard plan for loans disbursed on or after July 1, 2026, and the rule that a borrower who receives a first disbursement on or after that date loses eligibility for IBR, ICR and PAYE (studentaid.gov/manage-loans/repayment/plans)