SAVE Ending — Pick Your Plan (2026): RAP vs IBR by Income

You do not need to understand five repayment plans. You need two numbers: your adjusted gross income and your household size. Feed those into two formulas and the answer falls out.

A single borrower at $55,000 pays $229 a month under RAP and $259 under IBR. Move that same $55,000 income into a household of four and it flips hard: $79 under RAP, $46 under IBR. Push the single borrower to $70,000 and it flips again, this time because RAP's rate steps up a full point at the band line.

The Department of Education's announcement covering the 7.5 million borrowers enrolled in SAVE gives you 90 days from your servicer's notice date to choose. Notices started going out July 1, 2026 and continue in waves into 2027, so the first-wave deadline is September 29, 2026 and yours may be later. This page is the picker. If you want the full transition timeline and the five-plan taxonomy, that lives in the companion piece linked below.

Step 1: the two formulas, in one line each

Everything below is arithmetic on these.

• RAP (Repayment Assistance Plan): take your adjusted gross income, apply the percentage for your $10,000 band (1% at $10,000 or less, stepping up one point per band, 10% at $100,000 and above), divide by 12, subtract $50 for each dependent. Never below $10 a month. Forgiveness at 360 payments.
• IBR (Income-Based Repayment): take your adjusted income, subtract 150% of the 2026 federal poverty guideline for your household size, multiply by 10%, divide by 12. Never below $0, and capped at what the 10-year Standard plan would charge. Forgiveness at 20 years if you first borrowed on or after the July 2014 cutoff; the rate is 15% and the term 25 years if you borrowed before it.

The 2026 poverty guidelines for the 48 contiguous states are $15,960 for a household of one and $5,680 for each additional person, so the IBR shelter — 150% of that — is $23,940 for one, $32,460 for two, $40,980 for three, and $49,500 for four.

The structural difference is the whole story. RAP taxes your first dollar. IBR does not. That single asymmetry explains every result in the grid below.

Step 2: find yourself in the grid

Monthly payment, 2026 figures, dependents assumed to equal household size minus one. Bold is the cheaper plan at that intersection.

Read the pattern rather than memorizing the cells. IBR wins in 17 of these 20 intersections, and the margin widens as income and household size rise — at $100,000 with four in the household, IBR is $262 a month cheaper, which is $3,144 a year. RAP wins only in the low-income, small-household corner, and even there by $1 to $30.

The exception is worth naming precisely: at $40,000 in a household of one, RAP's $133 beats IBR's $134 by a single dollar. That is not a decision; that is a rounding artifact. At that income the interest treatment described further down should decide it, not the payment.

Step 3: check whether you are standing on a band cliff

This is the part that does not appear anywhere else, and it is the most actionable thing on this page.

RAP's percentage steps up one full point at each $10,000 of adjusted income, and the new percentage applies to your entire income — not just the dollars above the line. That is not how federal tax brackets work, and borrowers assume it is. It creates a genuine cliff at every band boundary.

The arithmetic is simple once you see it: the jump is always the threshold divided by 1,200. A borrower who recertifies at $70,400 pays about $411 a month. The same borrower at $69,900 pays about $350. Five hundred dollars of income costs $61 a month, or roughly $730 a year.

The lever: RAP reads adjusted gross income, so anything that lowers AGI can move you back under a line. Traditional 401(k) deferrals (up to $24,500 in 2026), HSA contributions ($4,400 self-only, $8,750 family), traditional IRA deductions where you qualify, and the student loan interest deduction (up to $2,500) all reduce adjusted income. Roth 401(k) and Roth IRA contributions do not — they come out of after-tax money and leave AGI untouched.

So the borrower at $70,400 who defers an extra $500 into a traditional 401(k) drops to $69,900, falls back into the 6% band, saves about $730 a year on the loan payment, keeps the $500, and reduces their income tax on top of it. I have not seen another lever in personal finance where a $500 move returns that cleanly. It only works on RAP, though — IBR has no cliff to fall off, because the IBR rate never changes and only the shelter amount moves.

One caution: both plans recertify annually, so the band you land in is the band your recertification income shows. Time the deduction to the tax year the recertification will read, not to the month you notice the problem.

Step 4: does the balance direction change your answer?

The grid answers "which payment is smaller." It does not answer "which plan costs less." Those diverge whenever the payment fails to cover the interest.

Take the household of three at $55,000 with a $38,000 balance at 6.5%. Monthly interest accrual is about $206.

• IBR at $117/mo: the payment covers roughly 57% of the interest. SAVE's unpaid-interest subsidy is gone, so the balance grows about $89 a month — $1,068 a year, going the wrong way.
• RAP at $129/mo: RAP waives all interest the payment does not cover, and adds a principal match of up to $50 a month when the payment applies less than $50 to principal. The balance falls roughly $50 a month.

That is a $139-a-month swing in balance direction bought for $12 a month of extra payment. Over five years, the IBR borrower is about $5,340 deeper and the RAP borrower about $3,000 shallower — an $8,340 gap that the payment column never showed you.

The rule I would apply: if you expect the balance to be forgiven at the end of the term, balance growth is irrelevant and you should take the smaller payment. If you expect to actually retire the loan — rising income, modest balance, no forgiveness track — RAP's interest waiver is usually worth a modest payment premium. The break-even is not a dollar amount; it is a question about which ending you are heading for.

Step 5: the PSLF override

If you work for a government or 501(c)(3) employer and you are counting toward 120 qualifying payments, one rule outranks everything above: you must affirmatively apply for RAP or IBR. Both qualify for PSLF. Auto-enrollment cannot land you on either, because both require an application.

The trap is the destination. Auto-enrollment places you on the Standard plan or the new Tiered Standard Plan, and Tiered Standard generates no PSLF credit at any tier, including the 10-year tier. The traditional 10-year Standard plan does qualify. So the do-nothing outcome for a public-service borrower is a coin flip between a plan that still counts and a plan that quietly zeroes the counter while you keep writing checks.

Between RAP and IBR, PSLF borrowers should generally lean IBR, for two reasons the grid already showed and one it did not. It is cheaper across almost the entire income range, which matters more when the ending is forgiveness and every dollar paid is a dollar not forgiven. It can produce a qualifying $0 payment in a low-income year, which RAP cannot. And under the One Big Beautiful Bill Act, a borrower who leaves IBR cannot re-enroll after July 1, 2028 — so IBR is the choice you can walk away from later, while RAP is the one you may not be able to walk back into.

Step 6: know exactly what "do nothing" costs

Three consequences stack, and they escalate.

• Placement, not choice. Standard or Tiered Standard, assigned by your servicer. On a typical undergraduate balance that is commonly $400 to $500 a month regardless of what you earn — often double or triple the income-driven number in the grid above.
• PSLF credit may stop entirely. If the placement is Tiered Standard, every payment you make earns nothing toward the 120. Months on a non-qualifying plan are not retroactively fixable through the ordinary process.
• Missed payments turn into collections. A federal Direct Loan enters default after 270 days of delinquency. At that point the Treasury Offset Program can intercept federal tax refunds and certain federal benefit payments, and the Department can garnish up to 15% of disposable pay administratively — without a court judgment — under 20 U.S.C. § 1095a, after a 30-day written notice and an opportunity to request a hearing. Collections activity on defaulted federal loans is active again this fall.

The sequence matters more than any single item. Nobody defaults because they chose the wrong plan. They default because a payment they never selected showed up at an amount they could not absorb, and nine months later the machinery started.

The picker, compressed

• Any dependents at all? Start with IBR. The poverty shelter scales with household size; RAP's dependent credit is a flat $50 and does not.
• Single, above roughly $70,000? IBR, and the margin grows with income.
• Single, under about $50,000 and just below a band line? RAP is narrowly cheaper, and the RAP interest waiver is the tiebreaker.
• Income within $2,000 above a $10,000 line? Check whether a traditional 401(k) or HSA contribution pulls you back under it before you apply.
• Payment will not cover the interest and you intend to repay rather than be forgiven? RAP, even at a slightly higher payment.
• Chasing PSLF? Apply for one of the two income-driven plans, lean IBR, and never let the clock run out.
• Small balance, comfortable income, want it gone? The traditional 10-year Standard plan is the fastest and cheapest exit in total interest, and it still counts for PSLF.

Do these three things this week

• Find your notice date. Log into your servicer portal and locate the exit letter. Your deadline is 90 days from that date. There is no single national deadline, and the wave structure runs into 2027 — do not calendar someone else's date off a news article.
• Write down your two numbers. Adjusted gross income from your most recent return and household size including dependents. Then run both formulas at the top of this page. It takes four minutes and it is the entire decision.
• Apply before the deadline, not on it. Income-driven plans require an application, and 7.5 million borrowers are migrating through the same servicers at once. Processing backlogs during a migration of that size are not a risk; they are a certainty.

The uncomfortable truth underneath all of this: almost every SAVE borrower's payment is going up no matter which box they check. The choice does not undo that. What it determines is whether you absorb the smallest version of the increase or the largest one — a spread that runs from $30 a month at the low end to $262 a month at $100,000 with a family, plus an entire forgiveness track for public-service borrowers who let the clock expire.

This is educational content, not a recommendation for your individual loans. Confirm your own plan eligibility, band, and deadline at StudentAid.gov and against your servicer's notice before applying. Borrowers with complicated PSLF employment histories, consolidated loans with mixed borrowing dates, or already-defaulted accounts should have a student-loan attorney or an accredited nonprofit credit counselor review the file first, because consolidation and rehabilitation sequencing errors are expensive to unwind after the fact.