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.
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.
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.
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.