RAP vs. Legacy IDR: Side-by-Side Comparison
The Repayment Assistance Plan (RAP) launched July 1, 2026. It's worse than IBR and PAYE in some big ways—a 30-year timeline and no $0 payment—but better in others, like its interest waiver. Here's exactly how it compares to IBR, PAYE, and ICR—and what the July 2026 cutoff means for consolidation now.
The Key Differences
| Feature | Legacy IDR (IBR/PAYE) | RAP (New Plan) |
|---|---|---|
| Forgiveness Timeline | 20-25 years | 30 years |
| Payment Basis | Discretionary income | Your full AGI |
| Income Protection | 150% of poverty line exempt | None—counts all of your AGI |
| Payment Rate | 10-15% of discretionary income | 1-10% of total AGI, by income bracket |
| Minimum Payment | $0 if income qualifies | $10/month minimum |
| Dependent Deduction | Built into poverty calculation | Flat $50/month per dependent |
| Interest Subsidy | Limited: unpaid interest on subsidized loans covered for the first 3 years | All unpaid interest waived on on-time payments, plus up to $50/month principal match |
| PSLF Eligible | Yes | Yes |
Where RAP Falls Short
1. Ten More Years to Forgiveness
RAP sets the forgiveness timeline at 30 years (360 payments). That's a full decade longer than the 20-year forgiveness on PAYE (or on IBR if you had no federal loan balance on July 1, 2014), and 5 years longer than 25-year forgiveness on IBR for earlier borrowers.
2. No Income Protection
Legacy IDR plans protect income near the poverty line from being counted toward your payment. PAYE, for example, only counts income above 150% of the federal poverty level as "discretionary income."
RAP eliminates this. Your payment is a percentage of your entire adjusted gross income (AGI), starting from dollar one. For many low-income borrowers, this means higher payments.
3. $10 Minimum Payment
On IBR or PAYE, if your income is low enough, your payment can be $0—and that $0 payment still counts toward forgiveness. RAP imposes a $10 minimum, meaning no truly free months.
Where RAP Is Better
RAP has real advantages. On every on-time payment, ED waives any interest your payment doesn't cover, so your balance can't grow from unpaid interest. ED also makes a matching principal payment of up to $50 a month when your payment barely reduces principal. Each dependent cuts your payment by $50 a month. And RAP counts for PSLF.
Loans made on or after July 1, 2026 can use only RAP or the Tiered Standard plan—not IBR, PAYE or ICR. A Direct Consolidation Loan made today counts as a new loan, even if it only repays old loans. If you want to keep your existing loans on IBR or PAYE, don't consolidate them now.
What the Cutoff Means Now
To keep legacy terms, a consolidation loan had to be made by June 30, 2026. Here's where that leaves you:
- If you have older loans and take new ones, keep them separate. Your older loans keep IBR; the new ones get RAP or Tiered Standard.
- If you have FFEL loans you still need to consolidate for PSLF, a consolidation made now can use RAP, which counts for PSLF.
- If you want all your existing debt to stay on legacy IDR terms, don't consolidate Direct Loans you already have.
If You Already Consolidated
A Direct Consolidation Loan made (disbursed) before July 1, 2026 keeps access to IBR, plus PAYE and ICR until July 1, 2028 if you qualify. What counts is the date the loan was made, not the date you applied. A consolidation made on or after July 1, 2026 is a new loan: RAP or Tiered Standard only.
IBR Is the Survivor
Of the legacy IDR plans, IBR (Income-Based Repayment) is the only one that survives the OBBBA terminations, though it's open only for loans made before July 1, 2026. If you're on PAYE or ICR, you must choose another plan—such as IBR, RAP or Tiered Standard—before July 1, 2028. If you don't, you'll be placed in RAP, or in IBR if your loans can't go into RAP.
For long-term planning, IBR is the stable choice among legacy plans.