RAP vs IBR vs Tiered Standard: Student Loan Plan Decision Engine

Since July 1, 2026, federal borrowers have a new income-driven plan (RAP), a new fixed plan (Tiered Standard) and new rules for Income-Based Repayment. Enter your loans and income to see what each plan would cost you, when it ends, and which choices can't be undone.

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🔍 Reviewed by Derek Giordano

📅 Updated Sep 27, 2026

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Federal loan balance ($) Average interest rate (%) Autopay Tax filing status Your AGI ($ a year) Spouse's AGI ($ a year) Spouse's federal student loans ($) Dependents you claim Where you live Income growth (% a year) Owed a federal loan before July 1, 2014? New loan or consolidation on or after July 1, 2026? Parent PLUS loans? Months already counted toward IDR forgiveness Inflation assumption (%) Full-time public service job (PSLF) PSLF payments already made

Nothing you enter is stored or sent. Use the balance and weighted interest rate from your StudentAid.gov account; AGI is line 11 of your latest Form 1040. The same account shows how many months already count toward income-driven forgiveness and toward PSLF.

The engine runs each plan forward month by month, so the numbers reflect interest, raises and forgiveness clocks rather than a single year's payment. For the full decision framework behind it, read RAP vs IBR vs Tiered Standard: The 2026 Decision Guide.

How the Decision Engine Works

Choosing a federal repayment plan used to be a comparison of monthly payments. After the 2025 budget law (Public Law 119-21) it is a comparison of whole paths: how fast the balance falls, whether interest is waived or piles up, when forgiveness arrives, what it costs in tax, and which doors close behind you. The engine models each of those pieces for the four plans an existing borrower can end up in:

RAP, the Repayment Assistance Plan. A percentage of your entire AGI, from 1% to 10% in $10,000 steps, minus $50 a month for each dependent, with a $10 floor. When an on-time payment doesn't cover the month's interest, the rest is waived, and if the payment cuts principal by less than $50 the Department adds a matching principal reduction to make up the difference. Anything left after 360 qualifying payments is forgiven.
IBR, Income-Based Repayment. 10% of the income above 150% of the poverty guideline for your family size, or 15% if you owed a federal loan before July 1, 2014. The payment is capped at the 10-year Standard amount figured when you enter, it drops to $0 when the formula gives less than $5, and forgiveness comes after 20 or 25 years. Interest the payment doesn't cover keeps accruing.
Tiered Standard. Fixed payments over 10, 15, 20 or 25 years depending on your total balance when you enter repayment, with a $50 minimum. No forgiveness.
The 10-year Standard plan. Fixed payments over 120 months, also with a $50 minimum, for borrowers still in the pre-July 2026 system.

Once a year the engine recalculates the income-driven payments, the way servicers do when you recertify. Your income rises by the growth rate you enter; the poverty guideline rises with the inflation assumption, as the real guideline does each January. RAP's dollar steps don't move at all, because the statute sets them in fixed dollars, and over a long repayment that matters.

If you check the PSLF box, forgiveness arrives after 120 qualifying payments counted from the number you have already made, on RAP, IBR or the 10-year Standard plan, and it is tax-free. Otherwise any balance forgiven under RAP or IBR is taxed as income, and the engine estimates the federal tax with the 2026 brackets and your filing status's standard deduction, applied to your projected income in the year of forgiveness. Because a dollar in 2045 isn't a dollar today, every plan's payments and tax are also restated in today's dollars at your inflation assumption, and the plan with the lowest cost in today's dollars is marked as the best fit. On the PSLF path, the plan with the least paid before forgiveness wins.

The Four Plans at a Glance

	RAP	IBR	Tiered Standard	10-year Standard
Monthly payment	1% to 10% of all AGI, minus $50 per dependent; at least $10	10% of AGI above 150% of poverty (15% for pre-July 2014 borrowers), capped at the Standard amount	Fixed over 10 to 25 years, by balance; at least $50	Fixed over 10 years; at least $50
Unpaid interest	Waived on on-time payments, plus up to $50 of principal match	Accrues (waived for three years on subsidized loans)	Paid every month	Paid every month
Forgiveness	After 360 payments, taxable	After 240 or 300 payments, taxable	None	None
Counts for PSLF	Yes	Yes	Not listed in the law	Yes
Who can use it	Most Direct Loan borrowers; not Parent PLUS	Only borrowers with no loan made on or after July 1, 2026	Borrowers with a loan made on or after July 1, 2026	Only borrowers with no loan made on or after July 1, 2026

Graduated and extended plans still exist for older loans, and PAYE and ICR linger until 2028, but the engine leaves them out: the graduated and extended plans rarely win on cost, and PAYE and ICR are closing.

Three Borrowers, Three Different Answers

These are the calculator's three samples, run from October 2026 with 3% annual raises, 2.5% inflation and no autopay. They are illustrations, not typical cases.

Maya: single, $38,000 at 6%, earning $52,000

RAP charges 5% of Maya's $52,000 AGI, $216.67 a month. IBR, as a borrower who first borrowed after 2014, charges 10% of the $28,060 she earns above $23,940, or $233.83. The 10-year Standard plan is $421.88. If Maya can carry that, it's the cheapest route by a wide margin: $50,625 in total, against $62,291 on RAP, where her rising pay keeps nudging her into higher steps and the loan runs about 15.7 years. RAP is the right call if $421.88 doesn't fit her budget; it still pays the loan off with no forgiveness and no tax bill. Tiered Standard, at $320.67 over 15 years, sits in between, but Maya could only get it by consolidating, which would close IBR and the 10-year plan to her for good.

A married teacher on PSLF

This couple files jointly on $98,000 of combined income, has two children and owes $72,000 at 5.5%; the teacher has 48 PSLF payments behind her. RAP takes 9% of the joint AGI, minus $100 for the two dependents: $635 a month. IBR takes 10% of the $48,500 above 150% of the poverty line for a family of four, just $404.17. Both reach forgiveness in 72 more payments, so the cheaper payment wins outright: $31,771 paid on IBR before $62,740 is forgiven tax-free, versus $55,210 on RAP.

Filing separately would go further. On separate returns only the teacher's $58,000 counts, and IBR drops to $141.83 while RAP drops to $141.67. Paid for 72 months, that is about $11,340 before PSLF forgives the rest. Their federal income tax before credits comes out the same, $7,400 either way, because both spouses sit in the 12% bracket; credits they could lose by filing separately still need checking.

Priya: single, $160,000 at 7%, earning $135,000

At this income RAP means 10% of every dollar, $1,125 a month, while IBR charges 10% of the income above $23,940, $925.50. IBR's payment starts just below the interest, so her balance creeps up at first, and after 17 years (she has 36 months of credit) about $80,795 would be forgiven, with a federal tax bill of roughly $19,391 in that year's dollars. The 10-year Standard plan, at $1,857.74, is still the cheapest if she can afford it: $222,928 in total, or $197,334 in today's dollars, against about $208,100 for IBR and $228,400 for RAP.

The One-Way Doors

Most plan changes can be reversed. These can't, or can't without a cost:

A new loan or consolidation after June 30, 2026. Any federal loan made on or after July 1, 2026, including a Direct Consolidation Loan, moves every loan you owe into the two-plan system: Tiered Standard or RAP. IBR and the 10-year Standard plan are gone for good, and if you don't choose, you are placed on Tiered Standard.
Moving from IBR to RAP. Months on IBR count toward RAP's 360 payments, but months on RAP don't count toward IBR forgiveness. If IBR would forgive your balance years sooner, a lower RAP payment can cost you more in the end.
Leaving IBR. Unpaid interest is added to your principal when you leave IBR, and also when your payment reaches the Standard cap.
Parent PLUS timing. RAP excludes Parent PLUS loans. A Parent PLUS consolidation made before July 1, 2026 can use IBR if it is on IBR or ICR at some point before July 1, 2028; a consolidation made now can only use Tiered Standard.
Deadlines that choose for you. Borrowers leaving the SAVE forbearance are placed on a standard plan if they miss their 90-day notice window, and anyone still on PAYE or ICR on July 1, 2028 goes to RAP (or to IBR if their loans can't use RAP).

What the Calculator Leaves Out

It treats your loans as one balance at one weighted rate, which is close enough for choosing a plan but not for planning a payoff loan by loan. It doesn't model the three-year interest benefit IBR gives on subsidized loans, so IBR's interest is slightly overstated for new IBR enrollees with subsidized debt. When both spouses have loans and file jointly, it splits the payment by each spouse's share of the combined balance at the start, the way the regulation does at each recalculation, but it doesn't follow the spouse's loans over time. It assumes steady raises, on-time payments and no deferments or forbearances; FFEL and Perkins loans need a Direct Consolidation Loan before they can use RAP, and that consolidation is itself a one-way door. The tax estimate is federal only: some states tax forgiven debt too. Your servicer's numbers after recertification are the ones that count.

Frequently Asked Questions

How is a RAP payment calculated?

RAP takes a percentage of your whole adjusted gross income: $120 a year if AGI is $10,000 or less, then 1% just above $10,000, rising one point for each additional $10,000, up to 10% above $100,000. Divide by 12, subtract $50 a month for each dependent, and the payment never falls below $10. Married couples filing jointly use their combined AGI.

How is an IBR payment calculated?

IBR charges 10% of the amount by which your AGI exceeds 150% of the federal poverty guideline for your family size, or 15% if you owed a federal student loan before July 1, 2014. For one person in the 48 contiguous states, 150% of the 2026 guideline is $23,940. The payment never exceeds the 10-year Standard payment figured when you entered IBR, and it can be $0.

Which repayment plan is cheapest?

If you can afford it, the 10-year Standard plan almost always costs the least in total, because it pays the loan off fastest. RAP and IBR lower the monthly payment, and one of them comes out ahead when forgiveness will erase a large balance. The calculator compares total cost in today's dollars, including any tax on forgiveness.

Can I still choose IBR in 2026?

Yes, if every federal loan you owe was made before July 1, 2026. A new federal loan or a Direct Consolidation Loan made on or after that date moves all of your loans into the two-plan system, Tiered Standard or RAP, and IBR is no longer available to you.

Does RAP count for Public Service Loan Forgiveness?

Yes. The 2025 law added on-time RAP payments to the payments that count toward PSLF's 120, alongside IBR and the 10-year Standard plan. Tiered Standard is not among the plans the law lists, so a PSLF candidate with a loan made after June 30, 2026 should repay on RAP.

Is forgiveness under RAP or IBR taxed?

Under current federal law, yes. The exclusion that made forgiven student debt tax-free covered 2021 through 2025. From 2026, a balance forgiven under an income-driven plan counts as income unless you are insolvent at the time. PSLF forgiveness and discharges for death or disability remain tax-free.

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