Student loan repayment plan comparison

Because of 34 CFR 685.209(d)(5), which says in terms: "Notwithstanding the conditions under paragraphs (d)(1) through (3) of this section, only Direct Loans made before July 1, 2026, may be repaid under the PAYE, IBR, and ICR plans." A borrower whose loans were all disbursed before that date keeps the older plans. A borrower with a single loan disbursed after it does not, and the reason is the third rule below rather than the loan itself.

• The cutoff is the disbursement date. The first disbursement date of the loan, not when you applied and not the academic year the money was for.
• 34 CFR 685.210(a)(1)(ii) limits a post-cutoff borrower to Tiered Standard and RAP.
• 34 CFR 685.210(a)(3) is the one that does the damage. All of a borrower's Direct Loans must be repaid together under the same plan. So a single post-cutoff loan does not sit in its own bucket. It drags everything else with it.

RAP is charged on total adjusted gross income, NOT discretionary income. Every income-driven plan before it charged a percentage of discretionary income, which is your income above a poverty allowance. That single change moves the answer for everybody, and it moves it most for the people with least.

The monthly figure is that base over twelve, less $50 for each dependent, floored at $10 a month. The floor is statutory under HEA 455(q)(4)(B)(ii) and it applies after the dependent deduction, so it cannot be reduced away.

Two consequences people assume the other way round. There are effectively no zero payments under RAP, which is a real regression for the lowest incomes: a borrower who paid nothing under IBR pays the floor here. And RAP has no upper cap. IBR and PAYE cap the payment at the 10-year Standard amount. RAP does not, so a high earner can pay more under RAP than under a legacy plan. A high earner can pay more under RAP than under a legacy plan, so RAP being newer does not make it cheaper.

The lowest band is a flat $120 a year rather than a percentage, which looks like an inconsistency and is not. $120 over twelve months is exactly the $10 floor, so the flat band and the floor are the same figure written two ways, and between $10,001 and $12,000 of income the 1% band produces less than the floor and the floor binds.

They carry one way. Prior income-driven payments count towards the RAP 360, but RAP payments do not count towards PAYE, ICR or IBR forgiveness, under 34 CFR 685.209(k)(4)(i)(A).

That asymmetry looks like a detail and is not. Moving to RAP and moving back are not the same size of decision: the first keeps your progress and the second throws it away. A borrower who spends six years in RAP and then returns to IBR starts the IBR clock at zero.

The second asymmetry is about months when you are not paying. After 1 July 2026 only unemployment deferment and economic hardship deferment count towards the 360. General forbearance does not, so a projection that counts every month of non-payment as progress is wrong.

No, and this is the single most out of date thing you will read elsewhere. American Rescue Plan Act section 9675 excluded it, that exclusion expired on 31 December 2025, and it was not extended. From 2026, income-driven and RAP forgiveness is cancellation of debt income under IRC 61, reported on Form 1099-C.

What stays excluded: Public Service Loan Forgiveness under IRC 108(f)(1), and death and total and permanent disability discharge under IRC 108(f)(5). The disability exclusion was restored by P.L. 119-21 section 70119 for discharges after 31 December 2025.

State treatment varies and this tool does not compute it. There is no single official tracker. Roughly 20 rolling-conformity states may tax forgiveness automatically unless they decouple from the federal position. That is a question for your state's revenue department, and any tool that hands you a state figure has invented it.

Each of these is left out rather than quietly approximated:

• Multi-year income growth. Every projection here holds your income flat. Real incomes rise, which raises RAP and IBR payments and lowers the forgiven balance. That is a version two.
• Any state tax layer. See above. There is no source to compute it from.
• Graduated and extended plans. Not modelled at all.
• SAVE transition carry-forward accounting. How months in SAVE are credited is not settled enough to model.

Still moving, from the register entries that review quarterly rather than annually: further Department of Education subregulatory guidance; residual SAVE litigation; the staggered transition deadlines, which you should confirm with your servicer rather than infer from anything here; possible state decoupling; and any bill to restore the federal tax exclusion.

Two of the ten figures behind this page are weaker than the rest and it is fair to say which. us.tiered-standard-plan, us.ibr-plans, us.paye-icr-sunset are recorded as corroborated rather than primary. us.ibr-plans in particular was read from secondary calculators rather than the Code of Federal Regulations, and IBR is the plan most pre-2026 borrowers will be comparing RAP against, so the comparison sets a primary figure against a second-hand one. us.paye-icr-sunset has no specific document recorded at all.

This tool computes and does not recommend. There is nothing here telling you which plan to choose, whether to consolidate, or whether to change how you file. Changing your filing status has tax consequences well beyond your student loan payment, and that is a conversation for a tax professional rather than a calculator. This is general information rather than financial, tax or legal advice.

Find your earliest disbursement date before you look at any payment figure. It decides which plans exist for you, and no amount of comparing helps if the plan you like is one you cannot join. If you are about to borrow again or consolidate, work out what that does to your older loans first, because it cannot be undone afterwards.