I'm talking about what we refer to as "Student Loans" https://www.gov.uk/government/organisations/student-loans-co...

"We are a non-profit making government-owned organisation that administers loans and grants to students in colleges and universities in the UK."

In many cases, it's never paid back in full, and the students don't ever need to worry about it.

From the perspective of many students, it's free money.

The deal is it's never paid back provided you stay poor (< £20k) for your whole life. Quite a high cost for a few years of drinking.

It's a sweet deal for employers to create a natural disincentive for people to ask for raises though, while keeping the outward appearance of fairness.

It's only a disincentive to ask for a raise if you don't know what it means. You only pay back student loans based on the percentage of money you earn above a certain amount.

If you earn £21,000 and the threshold is £20,000, you only pay back a portion of £1,000, not all of the £21,000.

the £1k gets turned into ~£700.

Nobody says no to an extra £700 if offered on a plate but the lower the % you get of a raise the less motivated you are to chase it.

£910 - you pay 9% over the threshold.

In my experience, student loan repayments are, until you are way above the threshold, a relatively minor number on your paycheques; dwarfed by income tax, national insurance, and pension contributions.

Why would this disincentivise asking for a raise?

The interest rates they charge on these loans and their mission statement suggest two very different motives. Mine is approaching car loan interest territory.