Income-Driven Repayment in 2026: IBR, RAP, and What Happened to SAVE

Income-driven repayment ties your federal student loan payment to your income and family size instead of your balance. As of 2026 the menu is consolidating: the SAVE plan created in 2023 is being wound down after litigation and legislation, and borrowers are being moved to either a modified Income-Based Repayment (IBR) plan or the new Repayment Assistance Plan (RAP) created by the 2025 budget law.

If you carry federal loans, the practical questions are which plan you will land on, what it does to your monthly payment, and whether any deadline requires action from you. Here is the landscape in plain English, with the caveat that details continue to roll out and studentaid.gov is the authoritative source.

What RAP Is and How It Calculates Your Payment

The Repayment Assistance Plan bases your payment on a sliding percentage of your adjusted gross income, roughly 1% to 10%, rising with income, with a small deduction per dependent and a minimum monthly payment. Unpaid interest above your payment is waived, so balances do not balloon the way they did on older plans, and small principal credits apply in low-payment years. Any balance remaining after 30 years of payments is forgiven.

RAP is mandatory for loans first borrowed after July 1, 2026, and one of two options for most existing borrowers leaving discontinued plans. Payments made under RAP count toward PSLF for qualifying employees.

Where IBR Fits Now

IBR survives as the legacy income-driven option for existing borrowers: generally 15% of discretionary income with forgiveness after 25 years, or 10% and 20 years for newer borrowers under the pre-2025 rules. Discretionary income is your AGI minus a multiple of the poverty line, so IBR payments can be lower than RAP for some borrowers, especially those with larger families or moderate incomes, and higher for others.

The right choice is arithmetic, not ideology: project both payments over your expected income path. For PSLF borrowers, the plan with the lower payment usually wins because forgiveness makes total interest largely irrelevant.

Deadlines and Transitions to Watch

Borrowers on SAVE, PAYE, and ICR are being transitioned in waves, with the discontinued plans slated to end by July 2028. Watch your servicer notices: missing a recertification or transition deadline can drop you into a standard plan with a much higher payment. Interest accrual on SAVE's litigation forbearance resumed in 2025, so months spent there also stopped being harmless for balance growth.

Mark your annual income recertification date, and recertify strategically: if your income just jumped, recertifying early is against your interest, while a drop in income is worth reporting immediately.

How High Earners Should Think About IDR

Once your income is high enough, an income-driven payment can exceed the standard 10-year payment, at which point IDR is just a longer, more expensive loan unless you are pursuing forgiveness. Married borrowers add a wrinkle: filing separately can shrink an IBR payment by excluding a spouse's income, at the cost of other tax benefits, a trade we walk through in our filing-status article.

The decision compresses to one comparison: total projected cost under forgiveness-oriented IDR versus aggressive payoff or refinancing. We build that comparison in our student loan planning engagements.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, and business owners. Advisory services are held to a fiduciary standard. More about Attend