RAP vs. IBR Student Loan Repayment Calculator
Use this calculator to compare estimated monthly payments and potential forgiveness under the Revised Pay As You Earn (REPAYE/RAP) and Income-Based Repayment (IBR) plans for your federal student loans. Understand how your income, family size, and loan details impact your repayment strategy.
(Example: $19,720 for 1 person, $26,820 for 2, $33,920 for 3 in 2024 for 48 contiguous states)
Repayment Comparison Results
Standard 10-Year Monthly Payment:
REPAYE (RAP) Plan Estimates
Monthly Payment:
Estimated Total Paid:
Estimated Forgiven Amount:
Forgiveness Period:
IBR Plan Estimates
Monthly Payment:
Estimated Total Paid:
Estimated Forgiven Amount:
Forgiveness Period:
Understanding REPAYE (RAP) vs. IBR Student Loan Repayment Plans
Federal student loan repayment can be complex, but income-driven repayment (IDR) plans like Revised Pay As You Earn (REPAYE), often referred to as RAP, and Income-Based Repayment (IBR) offer crucial flexibility. These plans adjust your monthly payment based on your income and family size, making student loan debt more manageable, especially for those with lower incomes relative to their debt.
What are Income-Driven Repayment (IDR) Plans?
IDR plans are designed to make federal student loan payments affordable by capping them at a percentage of your discretionary income. After a certain number of years (typically 20 or 25), any remaining balance on your loans may be forgiven, though this forgiven amount is generally considered taxable income.
Key Concepts:
- Adjusted Gross Income (AGI): Your income after certain deductions, found on your federal tax return.
- Federal Poverty Line (FPL): A set income threshold based on family size, used to determine discretionary income.
- Discretionary Income: The difference between your AGI and 150% of the FPL for your family size. If this calculation results in a negative number, your discretionary income is considered $0.
REPAYE (RAP) Plan Explained
The Revised Pay As You Earn (REPAYE) plan, or RAP, is generally considered one of the most generous IDR plans. It calculates your monthly payment at 10% of your discretionary income. A key feature of REPAYE is that it caps your payment at no more than what you would pay under the Standard 10-Year Repayment Plan, regardless of your income growth.
- Payment Calculation: 10% of your discretionary income.
- Forgiveness Period:
- 20 years for borrowers whose loans were all for undergraduate study.
- 25 years for borrowers with any graduate school loans.
- Interest Subsidy: REPAYE offers an interest subsidy. If your payment doesn't cover the monthly interest, the government pays 100% of the remaining interest on subsidized loans for the first three years, and 50% after that. For unsubsidized loans, the government pays 50% of the remaining interest.
- Eligibility: Available to any borrower with eligible federal direct loans.
IBR Plan Explained
The Income-Based Repayment (IBR) plan was one of the first IDR options. Its payment calculation depends on when you first took out your federal student loans.
- Payment Calculation:
- 10% of your discretionary income if you are a "new borrower" on or after July 1, 2014.
- 15% of your discretionary income if you are not a "new borrower" (i.e., you first borrowed before July 1, 2014).
- Payment Cap: Like REPAYE, your IBR payment is capped at no more than what you would pay under the Standard 10-Year Repayment Plan.
- Forgiveness Period:
- 20 years for "new borrowers" on or after July 1, 2014.
- 25 years for those who first borrowed before July 1, 2014.
- Interest Capitalization: If your IBR payment doesn't cover the interest, the unpaid interest may capitalize (be added to your principal balance) if you leave the plan or no longer have a partial financial hardship.
- Eligibility: Available to borrowers with eligible federal student loans who demonstrate a partial financial hardship.
Key Differences and Considerations:
- Payment Percentage: REPAYE is always 10% of discretionary income. IBR can be 10% or 15% depending on when you borrowed. This often makes REPAYE payments lower for many borrowers.
- Interest Benefits: REPAYE generally offers better interest subsidies, which can prevent your loan balance from growing as quickly if your payments are low. IBR has more limited interest benefits.
- Spousal Income: For REPAYE, if you are married and file taxes separately, your spouse's income is still included in the calculation. For IBR, if you file separately, your spouse's income is generally excluded. This can be a significant factor for married borrowers.
- Forgiveness Period: Both plans offer 20 or 25-year forgiveness, but the criteria differ slightly (undergrad vs. grad for REPAYE; new borrower date for IBR).
- Eligibility: REPAYE is generally more broadly available to Direct Loan borrowers. IBR requires demonstrating a "partial financial hardship."
Which Plan is Right for You?
The best plan depends on your individual circumstances, including your income, family size, total debt, interest rates, and future earning potential. Consider:
- Current Income vs. Debt: If your income is low relative to your debt, IDR plans can provide immediate relief.
- Future Income Growth: If you expect your income to rise significantly, your IDR payments will also increase.
- Marriage and Filing Status: This is a critical factor, especially for REPAYE, where spousal income is always considered.
- Tax Bomb: Remember that any forgiven amount at the end of the repayment period is typically considered taxable income by the IRS. You should plan for this potential tax liability.
This calculator provides estimates to help you compare. For personalized advice, it's always recommended to contact your loan servicer or a qualified financial advisor.