I worked at a credit union that does this- and WAY too many people took "advantage" of the "opportunity". The only "good" part of my particular credit unions version is that, while they put a $25 fee on the loan, it was paid off at the end and did not accrue interest.
The skip pay was at least helpful for trying to help habitually late members catch up and stop paying the late payment fee... that only rarely helped for long though.