Honest question: in what way are student loan servicers in the US financially incentivized to steer borrowers away from income based repayment plans? I think th

Honest question: in what way are student loan servicers in the US financially incentivized to steer borrowers away from income based repayment plans? I think that the opposite is true. Servicers are paid a flat fee per outstanding loan, without regard to balance or monthly payment, _as long as payments are current_. Delinquent accounts are worth less. Being put on an IBR reduces your monthly payment, making it more likely it can remain in the state that is most profitable for the servicer. https://thecollegeinvestor.com/36556/how-much-do-federal-student-loan-servicers-make https://thecollegeinvestor.com/36556/how-much-do-federal-stu... From that perspective, the servicer is strongly incentivized to use IBR plans for accounts at risk, with no downside to them for erring on the side of lower payments. Furthermore, income based repayment plans aren’t a forgiveness of debt or reduction in interest rate. They simply reduce the monthly payment by extending the term as needed. In practice this can mean adding decades to the term, sometimes creating a situation where the principal grows every month. The longer the extension, the more fees paid to the servicer, since they make a flat monthly fee per loan. Again, one would think that the servicers would have every incentive to promote such a system.