IBR vs RAP for Residents in 2026: Which Plan Should You Be On?

The One Big Beautiful Bill Act (OBBBA), signed in 2025 and effective July 1, 2026, replaced SAVE with a new income-driven plan called RAP — the Repayment Assistance Plan. For residents trying to figure out which plan to use, the answer depends almost entirely on when your loans were first disbursed.

Here's the direct comparison, with real numbers.

The Short Answer

• Loans first disbursed before July 1, 2026 → IBR. You can't access RAP for these loans. IBR is your only IDR option.
• Loans first disbursed on or after July 1, 2026 → RAP (or IBR — you can choose).
• Mix of both → IBR for old loans, RAP for new loans, or consolidate carefully.

Most current residents — PGY1 through PGY7 in 2026 — have loans that predate July 1, 2026. Started med school in 2022 or earlier? You're on IBR.

How Each Plan Calculates Your Payment

IBR (Income-Based Repayment)

• Formula: 10% of discretionary income
• Discretionary income = AGI − 225% of federal poverty line
• Poverty exemption (2026, single): $33,885
• Example at $65K salary: (63,000 − 33,885) × 10% ÷ 12 = $243/month
• Forgiveness: 20 years (25 for older borrowers)
• PSLF eligible: Yes

RAP (Repayment Assistance Plan)

• Formula: ~10% of AGI (no poverty line exemption)
• Example at $65K salary: $63,000 × 10% ÷ 12 = $525/month
• Forgiveness: 30 years
• PSLF eligible: Yes
• Partial interest subsidy: Yes — the government covers 50% of unpaid interest for borrowers in good standing

Side-by-Side Payment Comparison

IBR crushes RAP on monthly payment for essentially every resident. That poverty line exemption? It's worth roughly $280–300/month compared to RAP at typical resident salaries.

Where RAP Wins: Interest Subsidies

RAP has one genuine advantage: its partial interest subsidy. The government actually covers 50% of interest that your payment doesn't touch.

Take a resident at $65K with $280K in loans at 7%:

• Monthly interest accrual: ~$1,633
• RAP payment: ~$517
• Uncovered interest: ~$1,116
• Government subsidy (50%): ~$558

Your balance grows by ~$558/month on RAP instead of ~$1,390/month under IBR. Over a 4-year residency, that's roughly $26,784 less in accrued interest.

But wait. Your monthly payment on IBR is $274 less than RAP. Over 4 years that's $13,152 you keep — and if you're pursuing PSLF, the balance growth doesn't matter at all because it's forgiven anyway.

If You're Pursuing PSLF: IBR Wins Clearly

PSLF borrowers want to minimize payments before forgiveness. The balance is irrelevant. IBR's lower payment crushes RAP's interest subsidy.

Here's the math at $65K salary: IBR costs $274/month less than RAP. Over 120 PSLF payments, that's $32,880 in your pocket. RAP's interest subsidy saves perhaps $25–30K in balance growth, but that balance gets forgiven anyway — it doesn't matter.

Verdict for PSLF residents: IBR.

If You're Not Pursuing PSLF: It Gets Messier

Planning to refinance or aggressively pay down loans after training? Then interest accrual during residency actually matters — it becomes principal you'll owe later.

RAP's subsidy has real value here. Whether it overcomes the higher monthly payment is situation-dependent. Run your numbers in the MedDebt Calculator using your actual balance and projected attending salary.

That said, most residents planning aggressive payoff would benefit more from refinancing into a private residency loan program with a 2–4% fixed rate than staying on any federal IDR plan. Federal loans sit at 7% — any IDR accrual gets expensive fast.

What About PAYE and ICR?

PAYE and ICR are phasing out. After July 1, 2026, nobody new can enter these plans. Currently on PAYE? You can stay until mid-2028, then you'll get auto-moved to IBR. Don't enroll in PAYE now.

Worked Example: New M4 with Grad PLUS Loans Disbursed August 2026

This is where RAP actually matters. A new M4 receiving loans first disbursed in August 2026 can access RAP specifically for those loans.

Scenario: M4 with $45,000 in loans disbursed August 2026 (new semester), $180,000 in existing pre-July loans already on IBR, starts PGY-1 July 2027 at $65K.

The old loans stay on IBR: ~$243/month (they all roll into one payment). Those August 2026 loans? You can pick IBR or RAP. IBR probably still wins for PSLF.

In reality, most residents should just consolidate everything and put it all on IBR. RAP's subsidy only changes the math if your new-disbursement balance is substantial relative to your old loans.

The Bottom Line

Use the IDR Plan Quiz to get a recommendation based on your specific numbers, or run full 20-year projections in the MedDebt Calculator.

Frequently Asked Questions

Can I switch from RAP to IBR after enrolling? Yes. You can change IDR plans at studentaid.gov. PSLF-qualifying payments count regardless of which IDR plan you were on when you made them.

Is RAP better if I have a high loan balance? Higher balances increase interest accrual, making RAP's subsidy more valuable in dollar terms. But it still doesn't overcome IBR's lower payment advantage for PSLF borrowers. At $400K+ in loans, run the numbers carefully.

What happens to PAYE borrowers after mid-2028? They're auto-enrolled in IBR. Payments stay income-driven. No PSLF disruption — qualifying payments already made continue counting.

Does RAP forgiveness at 30 years have a tax bomb? Federal loan forgiveness is currently tax-free through 2025 under the American Rescue Plan extension. What happens after is unknown — this is a risk for RAP's 30-year forgiveness that PSLF forgiveness does not have (PSLF is permanently tax-free).

I was on SAVE and got moved to Standard Repayment. What now? Enroll in IBR immediately at studentaid.gov. Payments made on the standard plan while you were in SAVE litigation limbo may qualify for PSLF credit — check with your servicer.

Run Your Own Numbers

Every physician's debt situation is different. Use the MedDebt Calculator to model your exact repayment strategy — PSLF vs. aggressive payoff vs. refinancing — with your actual loan balance, specialty, and income.

It's free, takes 2 minutes, and shows you net worth projections by year.

This article is for informational purposes only and does not constitute financial, legal, or tax advice. Every borrower's situation is unique — consult a certified student loan advisor or fee-only financial planner before making repayment decisions.

Disclosure: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Loan program details change — always verify current rules on studentaid.gov. MedDebt may earn a referral commission if you refinance through links on this site.