Help me understand this. Under old IBR, I was paying 15% of my discretionary income. Since the new RAP plan caps payments at 10% of AGI, does that mean some of the people who were on the old IBR would now have lower monthly payments?
For context, I’m single with no kids. My AGI on the 2025 1040 was $61,500, though my actual salary is $68,000. I also have roughly $64,000 in student loan debt. I've been on forbearance for several years.
Old IBR vs. RAP: Are My Payments Actually Going Down?
byu/ESVarga inStudentLoans
Posted by ESVarga
2 Comments
In some cases, yes. However, IBR is capped at the 10-year standard amount; RAP has no upper limit.
Yes, RAP is generally better for old IBR borrowers but there’s a key trade-off: time until forgiveness.
You need to run a little math:
– Old IBR payment up until 25 years + tax bomb
– RAP payment up until 30 years + tax bomb
Depending on how much time you’ve already been paying, it may be more expensive in total to switch to RAP versus the shorter IBR forgiveness timeframe.