If you are weighing RAP vs SAVE or any of the older income-driven plans after July 1, 2026, you are not alone. The federal student-loan reset shook up every plan at once, and the right choice now depends on your income, your family, your balance, and whether you are chasing forgiveness. Here is a plain-English comparison to help you decide.
The short version
July 1, 2026 introduces the Repayment Assistance Plan (RAP) and begins phasing out the older income-driven options. SAVE has already been struck down by the courts. PAYE and ICR are closing. 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.
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) and Income-Contingent Repayment (ICR) close to new enrollment on July 1, 2026. Existing borrowers who do not take new loans generally keep access to PAYE and ICR until July 1, 2028, after which both plans sunset entirely and remaining enrollees are moved to IBR or RAP.
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.
RAP
RAP is the new plan, available 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 guaranteed $50-a-month minimum drop in principal. See what RAP means for your student loans for the full breakdown.
How the plans compare at a glance
| Plan | Status after July 1, 2026 | Payment basis | Non-PSLF forgiveness |
|---|---|---|---|
| RAP | New, available now | 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 | Closed to new enrollment; sunsets July 1, 2028 | 10% of discretionary income | 20 years |
| ICR | Closed to new enrollment; sunsets 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.
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 floor 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 floor 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.
Not sure which plan wins for you? Get matched with a student-loan advisor who compares them on your real numbers, or start a free trial.
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
