RAP vs PAYE vs IBR: Which Plan Costs Less in 2026

The short version

July 1, 2026 introduced the Repayment Assistance Plan (RAP) and began phasing out the older income-driven options. SAVE has already been struck down by the courts. PAYE (for PAYE new borrowers) and ICR stay open to borrowers with no new federal loan on or after July 1, 2026, until both end no later than July 1, 2028. IBR sticks around as the last “old” plan. RAP is the future, and for brand-new borrowers it is the only income-driven choice. But for existing borrowers, the best plan is whichever one gives you the lowest lifetime cost for your situation, and that is not always RAP. If you first borrowed on or after July 1, 2014, PAYE and IBR run the same formula and return the same payment; PAYE ends July 1, 2028 and IBR does not. The worked figures on this page come from the Finology Software calculator, on the rules in effect since July 1, 2026.

PAYE stays open until July 1, 2028 to PAYE new borrowers with no new loan, including a consolidation loan, since July 1, 2026, so the RAP vs PAYE question applies to anyone on PAYE or still able to elect it. PAYE charges 10% of your income above 150% of the poverty guideline, capped at the 10-year Standard payment, and forgives the remaining balance after 20 years. RAP charges 1% to 10% of your full adjusted gross income, minus $50 a month for each dependent, with a $10 monthly minimum, and forgives after 30 years. If you first borrowed on or after July 1, 2014, IBR uses the same 10% and 20-year terms as PAYE and stays open after 2028. On a $60,000 balance at 6.5% with $60,000 of income, RAP is $250 a month and IBR is $301. Lifetime cost, including the estimated tax on forgiveness, is $99,240 on RAP and $87,017 on IBR, and the 10-year Standard plan costs the least at $81,755 (single filer, no dependents, income held flat; Finology Software calculator, October 12, 2026). Run your own loans in the RAP payment calculator or any of our free student loan calculators.

How the plans compare at a glance

Plan	Status after July 1, 2026	Payment basis	Non-PSLF forgiveness
RAP	Open to Direct Loans	1% to 10% of full AGI, minus $50/dependent, $10 minimum	30 years (360 payments)
SAVE	Struck down; choose a new plan	(no longer available)	(no longer available)
PAYE	Open to PAYE new borrowers with no new loan since July 1, 2026; ends by July 1, 2028	10% of discretionary income	20 years
ICR	Open if no new loan since July 1, 2026; ends by July 1, 2028	20% of discretionary income	25 years
IBR	Remains available	10% or 15% of discretionary income	20 or 25 years depending on when you borrowed

A quick note on “discretionary income”: the older plans subtract a poverty-line amount from your income first (150% of the federal poverty level for PAYE and IBR; 100% for ICR), then charge a percentage of what is left. RAP skips that subtraction and applies its tier to your full AGI. That single difference is why no plan is automatically cheapest for everyone.

We ran PAYE and RAP through our calculation engine across fifteen income and balance combinations. In every one, PAYE cost less over the life of the loan whenever PAYE forgave a balance, and RAP cost less whenever PAYE forgave nothing. The monthly payment predicted nothing. The comparison below shows where each plan wins and why.

What is happening to each plan after July 1

SAVE

The SAVE plan is gone. A federal appeals court vacated SAVE on March 10, 2026, so it is no longer an option. Starting July 1, 2026, borrowers who were on SAVE begin receiving transition notices and have a 90-day window to choose a new plan. If you were on SAVE, doing nothing is not a safe option, you need to pick a new plan. We cover this in is my income-driven repayment plan going away?

PAYE and ICR

Pay As You Earn (PAYE) stays open to PAYE new borrowers with no new federal loan, including a consolidation loan, on or after July 1, 2026. You are a PAYE new borrower if you had no outstanding Direct or FFEL balance when you received a Direct or FFEL loan on or after October 1, 2007, and you received a Direct Loan disbursement on or after October 1, 2011. Income-Contingent Repayment (ICR) stays open to borrowers with no new federal loan on or after July 1, 2026, and it is the only income-driven plan for a consolidation loan that repaid a Parent PLUS loan. It ends no later than July 1, 2028. Borrowers already on PAYE or ICR can stay until July 1, 2028, when both plans end; anyone still on them must elect another plan before that date, and the Department assigns one to borrowers who do not choose.

IBR

Income-Based Repayment (IBR) has its own statutory authority, so it is not being phased out. It remains available alongside RAP indefinitely. If you also want a fixed-payment comparison, here is how RAP compares with the new Standard plan. For some borrowers, especially those with lower-to-mid incomes (IBR still protects a slice of income at 150% of the poverty line) or a lot of forgiveness progress on an older loan, IBR can still be the better choice. The IBR calculator shows the payment, forgiveness and tax at your income.

RAP

RAP is the new plan, available since July 1, 2026. For anyone who takes out a federal loan on or after July 1, 2026, it is the only income-driven option. For existing borrowers, it is a choice. RAP’s standout features are waived unpaid interest and a principal match that lowers your balance by up to $50 a month (never more than your payment). See what RAP means for your student loans for the full breakdown.

If you were on SAVE, here is what to compare now

If you are comparing SAVE against PAYE, only one of the two still exists. SAVE was vacated by a federal appeals court on March 10, 2026 and no longer exists. PAYE stays open until July 1, 2028 to PAYE new borrowers with no new loan since July 1, 2026.

Update, October 12, 2026: the first SAVE deadlines passed on September 29. If you were on SAVE, your servicer’s transition notice started a 90-day window on the date it was sent, not on a shared calendar date. The earliest of those windows closed on September 29, 2026. If you miss yours, you are placed on the Standard or Tiered Standard plan and billing begins, whatever your income. Notices are still going out in tranches roughly two weeks apart through December, so a later notice means a later deadline. Roughly 6 million of the 7.5 million borrowers who were on SAVE had not chosen a new plan as of mid-September.

That makes the real comparison much simpler than it looks. Here is what each starting point actually maps to:

If you were on	Your live options
SAVE	RAP or IBR. You must elect one; the plan no longer exists to stay on.
PAYE	Stay on PAYE, or move to RAP or IBR. PAYE itself sunsets July 1, 2028.
ICR	Stay until the July 1, 2028 sunset, or move to RAP or IBR.
IBR	Stay. IBR has independent statutory authority and is not being phased out.
Nothing yet, or a new loan	RAP is the default. IBR if you qualify on partial financial hardship.

So “SAVE vs PAYE” and “SAVE vs IBR” both collapse into one lasting question for nearly everyone: RAP or IBR. A borrower on PAYE, or eligible to elect it before 2028, also has RAP vs PAYE, priced in the next section.

If you were on SAVE, the deadline matters more than the comparison

Borrowers transitioning off SAVE receive a notice that opens a 90-day window to elect a new plan. Letting that window close does not keep you where you are, because there is nothing to keep. It hands the choice to your servicer instead of making it yourself, and the plan you land on may carry a payment far above what an income-driven election would have produced.

Two things work in your favor. Months you already paid under SAVE, PAYE, IBR or ICR carry across to whichever plan you move to, including toward RAP’s 360-payment clock and IBR’s 240 or 300, so you are not restarting. And if you work in public service, both RAP and IBR qualify for PSLF, so the choice narrows to whichever payment is lower. See whether RAP qualifies for PSLF.

The one thing that does not work in your favor is waiting. Interest accrues while you decide, and months spent in a forbearance count toward neither forgiveness nor PSLF.

Compare two plans side by side: PAYE vs RAP, RAP vs IBR and IBR vs PAYE.

RAP or PAYE?

PAYE is cheaper whenever PAYE actually forgives a balance, and RAP is cheaper whenever it does not. The deciding question is not which monthly payment is smaller, it is whether forgiveness ever arrives. These comparisons assume PAYE continues for its full term; PAYE ends no later than July 1, 2028, when borrowers move to RAP (or IBR if RAP isn’t available), and advisors can model that switch in Finology Software’s Plan Transition tool.

This is the comparison most borrowers are searching for, and it applies to two groups: people already on PAYE, and PAYE new borrowers who can still elect it. PAYE stays open to them until July 1, 2028 if they have taken no new loan since July 1, 2026. If you are on it, the question is whether to stay or move to RAP.

Full comparison: PAYE vs RAP, with the cost table by income

PAYE or IBR?

For most borrowers asking this, there is no cost difference at all. If you first borrowed on or after July 1, 2014, PAYE and IBR run the same formula: 10% of the income above 150% of the poverty guideline for your family size, capped at what the 10-year Standard plan would charge, with the balance forgiven after 240 qualifying payments. Run both through our engine and they return the same payment and the same lifetime cost, to the dollar.

The comparison only produces two different numbers if you borrowed before July 1, 2014. That older IBR cohort pays 15% instead of 10% and waits 300 payments instead of 240. Here is what that costs, all-in, on a $120,000 balance at a 6.53% blended rate with income growing 3% a year:

Full comparison: IBR vs PAYE, including the pre-2014 IBR cohort

RAP or IBR?

Short answer: RAP usually has the lower monthly payment at lower and middle incomes, while IBR can cost less over the life of the loan because it forgives sooner (240 or 300 payments against RAP’s 360). See both at your income in the RAP vs IBR calculator: payment, lifetime cost and tax by income.

Unlike PAYE, IBR is not closing. It has its own statutory authority, so it stays available alongside RAP indefinitely, which makes it the live alternative for most borrowers weighing RAP today.

Full comparison: RAP vs IBR, with the cost table by income

How does RAP compare to the new Standard plan?

RAP sizes your payment to your income. The new Standard plan sizes it to retire the balance on a fixed schedule. That single difference drives most of the decision.

The Standard plan is built around fixed payments designed to pay your loans off over a set term. Your payment generally doesn’t move with your income; instead, it’s sized to retire the balance on schedule. That predictability is the main appeal, you know what you’ll pay and roughly when you’ll be done.

Neither is universally better. RAP tends to favor borrowers who want payments to stay manageable relative to income, who have a high balance relative to earnings, or who are pursuing forgiveness. Standard tends to favor borrowers who can comfortably afford the fixed payment, want to be debt-free on a set timeline, and want to minimize total interest paid over the life of the loan. A lower monthly payment can mean more interest over time; a faster payoff can mean tighter cash flow now.

Advisors comparing the tools that run these projections: see our buying guide for student loan repayment software.

How to actually choose

There is no single “best” plan. The right answer depends on:

• Your income and how it will grow. A lower payment today can cost more over the life of the loan.
• Your family size. RAP’s $50-per-dependent deduction helps families.
• Your balance and interest rate. RAP’s interest waiver and $50 principal match matter most when your balance is high relative to your income.
• Whether you are pursuing PSLF. If you work in public service, the plan you pick interacts with your 120-payment count. See RAP and PSLF.
• How far you already are toward forgiveness. Switching plans can affect your forgiveness clock. Payments you already made on SAVE, PAYE, IBR, or ICR do count toward RAP’s 30-year clock, so you do not restart from zero.

The mistake to avoid is choosing by the lowest monthly payment alone. The number that matters is the total you will pay over the life of the loan, including any forgiveness and any tax on forgiven debt.

When RAP is the better deal, and when it is not

RAP tends to help borrowers with high balances relative to income, dependents, or low incomes where the interest waiver and the $50 principal match do real work. RAP can be a worse deal for borrowers who are close to forgiveness on an older plan with a shorter forgiveness term, or whose older-plan payment is already lower because of the discretionary-income subtraction. The only way to know which camp you are in is to compare the plans side by side on your actual numbers. If you are comparing tools to do that, see how Finology Software compares.

Frequently asked questions about RAP, PAYE and IBR

Can I still sign up for PAYE?

Yes, if you are a PAYE new borrower and have taken no new federal loan, including a consolidation loan, since July 1, 2026. You are a PAYE new borrower if you had no outstanding Direct or FFEL balance when you received a Direct or FFEL loan on or after October 1, 2007, and you received a Direct Loan disbursement on or after October 1, 2011. PAYE ends no later than July 1, 2028. To see the plans your loan type can elect, enter it in the RAP payment calculator.

What happens to PAYE in 2028?

PAYE ends on July 1, 2028. Under 34 CFR 685.209(c)(7), every borrower still repaying under PAYE or ICR elects another plan before that date, choosing among RAP, IBR, a standard plan or a graduated plan, and the Department assigns a plan to borrowers who do not choose. If you are on PAYE today, compare RAP and IBR now so the move is your choice.

Do PAYE and RAP both count for PSLF?

Yes. Both are qualifying repayment plans for Public Service Loan Forgiveness, and forgiveness after 120 qualifying payments is tax-free on either. They differ on months you do not pay: cancer treatment, economic hardship, military service and post-active-duty deferments, and AmeriCorps, National Guard duty and administrative forbearance, earn PSLF credit on PAYE and pause that credit on RAP (34 CFR 685.219(c)(2)(v)). See RAP and PSLF for how to weigh the two.

PAYE vs RAP: which is better?

PAYE is cheaper than RAP whenever PAYE actually forgives a balance, and RAP is cheaper whenever it does not. PAYE charges 10% of income above 150% of the poverty guideline and forgives after 20 years; RAP charges 1% to 10% of all AGI and forgives after 30.

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Not sure which plan wins for you? Get matched with a student-loan advisor who compares them on your real numbers, or create a free account.

July 1 student-loan changes: the full series

• July 1 student-loan changes, explained simply (start here)
• What RAP means for your student loans
• Is my income-driven repayment plan going away?
• Signs you are on the wrong repayment plan after July 1
• RAP and PSLF: what forgiveness-seekers need to know
• RAP payment calculator: what you will actually pay
• Should I consolidate my student loans?
• How Long Until Student Loans Are Forgiven?
• Why Your Best Clients Haven’t Told You About Their Student Debt Yet
• Student Loan Repayment Guide (2026)

Related reading: the July 1 RAP changes

• What is the Repayment Assistance Plan (RAP)?
• How to switch to RAP, step by step
• Estimate your RAP payment

More on this topic

• Grad PLUS Is Gone. Here Is What a Graduate Student Borrows Instead
• The New $257,500 Lifetime Cap, and How Undergrad and Grad Borrowing Stack
• Deferment vs Forbearance: Which One Actually Costs You Less in 2026?
• Credit Card Hardship Programs: What Happens When You Finally Answer the Bank’s Call
• One New Loan This Fall Rewrites Your Client’s Plan Menu
• Is Forgiven Student Loan Debt Taxable in 2026? What Advisors Need to Know