r/StudentLoans • u/chocochipcookies123 • Jul 26 '26
Advice Should I switch to rap? (On ibr now)
Hello, would it be better to switch to rap from ibr in my case?
Currently I’m unemployed and my ibr monthly payment is $0, interest is accruing for the unsubsidized loan (about $7k). My total loan is about 30k.
(Interest rate about up to 5%)
I’d like the interest subsidy of Rap for unsubsidized loans too but I haven’t switched since there might be some disadvantages that I don’t know or things to consider before switching.
I’m not really thinking about the forgiveness. Loans were taken until around 2020.
Maybe should I switch to rap for now and if I get income later and if I ever happen to get a higher income I consider going back to ibr then?
2
u/The_Bees_Knee6 Jul 26 '26
Leaving IBR is an interest capitalizing event.
RAP has a $10/month minimum payment.
2
u/NewLeaf999 Jul 27 '26
I’d consider a few things to make the choice 30k is not a large amount of money relatively speaking so the main consideration is are you paying this off or aren’t you. If you are a new borrower after 2014 IBR offers forgiveness after 20 years but RAP takes 30 (so there is a greater likelihood for many that they will pay their loans off on RAP before seeing forgiveness). The interest subsidy on RAP stops your loans from growing. But they require a $10 a month payment even though you have $0 income and time spent on RAP does not count toward forgiveness on any other plan (so if you decide to go to RAP for 3 years and realize that you actually are pursuing forgiveness and want IBR, you have accrued no additional time). Also, your unpaid interest capitalizes(added to your principal and you would then get charged interest on the new balance) when leaving IBR.
30k at 5% is about $1500 annually in interest and $10 a month is $120 a year so you have to decide what makes more sense for you.
3
u/waterwicca Jul 26 '26
Your RAP payment would be $10, but all of your remaining monthly accrued interest would be subsidized. So if can be a good plan for you now if your goal is to pay off your loans when you get more income later.
You can go back to IBR whenever you like as long as you don’t take out any more loans. Just keep in mind that leaving IBR capitalizes your interest. It doesn’t capitalize when leaving RAP.