IDR Plans: Choosing Your Payment Formula

After the 2025 overhaul, one form still moves $200 a month

In July 2026, the income-driven repayment menu you may have studied as a student no longer exists. A court settlement ended SAVE in March 2026, and the One Big Beautiful Bill Act of 2025 closed PAYE and ICR to new enrollment on July 1, 2026. For most physicians the choice is now binary: the new Repayment Assistance Plan (RAP) or Income-Based Repayment (IBR). The two plans compute your payment from different bases — RAP takes a percentage of your entire adjusted gross income, while IBR first shields 150% of the poverty guideline. At a $280,000 attending income, that single difference is $199.50 per month, roughly $14,364 over six attending years of a PSLF timeline. Pick wrong as a resident and the cost is smaller but still real. This module teaches both formulas with 2026 numbers, so the choice is arithmetic, not guesswork. One caution before you begin: this is the most legally active corner of physician finance. Court timelines and servicer implementation are still moving as of July 2026; where the ground is unstable, this module says so and points you to studentaid.gov.

Discretionary income

The income an IDR formula actually charges against: adjusted gross income minus a multiple of the HHS poverty guideline for your household size — 150% under IBR. RAP abandoned this concept and applies its percentage to total AGI.

Every income-driven formula asks the same question: how much of your income should the calculation set aside before charging you a percentage? Under IBR, the answer is 150% of the HHS poverty guideline for your household size. For a household of one in 2026 the guideline is $15,960, so IBR ignores your first $23,940 and charges 10% of everything above it — 15% if you first borrowed before July 1, 2014. RAP, created by the One Big Beautiful Bill Act of 2025, answers the question differently: nothing is set aside. Your entire adjusted gross income falls into a band — 1% at the bottom, rising one percentage point per $10,000 of AGI, capped at 10% above $100,000 — and the band rate applies to the whole figure, minus $50 per month for each dependent, with a $10 monthly floor. Two plans, two engines. IBR's shield is worth exactly 10% of $23,940, or $199.50 per month, to a household of one; RAP's compensation is banded rates that stay below 10% until AGI passes $100,000.

Why it matters: The engine determines who each plan favors. Banded rates below 10% make RAP cheaper at resident incomes; the $23,940 shield makes IBR cheaper once your AGI clears roughly $100,000. Because most physicians spend three to seven years at resident income and decades at attending income, the crossover is not trivia — it is the decision.

The July 2026 lineup: two real choices, three closing doors

As of July 2026, this is the plan menu. Treat anything you read that describes SAVE enrollment or new PAYE applications as outdated. The 2025 One Big Beautiful Bill Act restructured repayment, and the SAVE wind-down runs on court-ordered timelines that servicers are still implementing — before you file anything, confirm the current menu at studentaid.gov.

Same doctor, two formulas: $325 vs $342 becomes $2,333 vs $2,134

One internist, two career stages: PGY-2 with a $65,000 AGI, then attending with a $280,000 AGI. Household of one, no dependents, 2026 rules.

Bottom line: RAP wins by $17.17 per month during residency; IBR wins by $199.50 per month as an attending — on a 10-year PSLF arc with four resident years, the IBR route pays roughly $13,540 less in total.

The recertification that erases your resident discount

Your IDR payment is repriced once a year, from the income evidence you submit at recertification — normally your most recent federal tax return. That creates a timing window every graduating resident should understand. Finish training in June 2027 with a May 2027 recertification date, and your 2026 return — all resident income — is both your latest return and an honest picture of your current pay. Recertify on time and your payment stays resident-sized until roughly May 2028, even as attending income arrives in August. Every one of those months counts fully toward PSLF's 120 payments. Miss the deadline, and servicers generally move you to the standard payment amount, and unpaid interest may capitalize when you leave IBR — practice has varied; confirm the consequences with your servicer. The expensive version of this mistake is voluntary: submitting attending pay stubs that no rule required you to submit.

How to avoid it: Calendar your recertification date the day you enroll and set a reminder 60 days ahead. Recertify on schedule in your final resident spring, answering the application's income questions truthfully — at that moment your pay is still resident pay. After signing an attending contract, submit nothing early; wait for your required date. Get your deadline from your servicer in writing and file it with your PSLF records.

Check yourself: run the RAP bracket

Choose the formula, not the brand name

• As of July 2026, RAP and IBR are the only income-driven plans open to physician borrowers, and loans first disbursed on or after July 1, 2026 can use only RAP or the standard plans.
• RAP applies 1% to 10% to your entire AGI by income band; IBR applies 10% (or 15% for pre-2014 borrowers) only to income above 150% of the poverty guideline — $23,940 in 2026 for a household of one.
• The formulas cross over as income rises: RAP is usually cheaper at resident income, and IBR is usually cheaper at attending income, worth about $199.50 per month at a $280,000 AGI.
• Both plans qualify for PSLF's 120-payment count under the 2026 Department final rule; RAP's own forgiveness horizon is 30 years and new-borrower IBR's is 20 years.
• Recertify on schedule during your final resident spring so your first attending year is priced at resident income.

Do this next: Pull your AGI from your most recent tax return and compute your payment under both RAP and IBR this week — then confirm the current plan lineup at studentaid.gov before you file.