Students walk past the Alderman Library on the University of Virginia campus. (Andrew Harrer/Bloomberg)

FOR ALL the recent cutbacks in state funding of higher education, and the tuition increases that followed, in-state tuition at a flagship institution such as the University of Maryland or the University of Virginia remains one of the few bargains available to students and their families. There’s only one problem, and it’s not a minor one, even though most states don’t like to discuss it: The benefits of this bargain accrue disproportionately to upper-income families. Children of affluent parents are more likely to go to four-year colleges and, within that context, more likely to go to flagship institutions. Yet they are also better able than others to pay more for the privilege. The upshot is that states are forgoing revenue that could be used to subsidize low-income students.

The University of Virginia has a plan to address that issue. The university's Board of Visitors said Tuesday that it will raise in-state tuition $1,000 per year over two years, starting with the freshman class that matriculates this fall. That "step increase" will be on top of any cost increment that would otherwise occur, such as the 3.6 percent hike scheduled for 2015-2016. For next fall, this translates into $14,468 a year, up from $12,998 at present. The university will use the increased revenue to expand need-based grants for students from the commonwealth, such that the maximum borrowing for a family earning $25,000 would decline from $14,000 to $4,000 over four years — and from $28,000 to $18,000 for a family earning $75,000.

In praising this plan, we do not for a minute deny the additional cost this would impose on families who already pay taxes that help support U-Va. Undoubtedly, many of them had come to view low in-state tuition as a benefit they were entitled to. A broader concern is that this tuition hike presages a shift to the high-tuition, high-aid financial model of elite private institutions such as those in the Ivy League. "The slow-motion privatization of the University of Virginia," as the board member who cast the lone opposing vote called it.

The truth is, though, that U-Va. has a long way to go before its in-state tuition matches the $50,000-plus sticker prices of the Ivies — or the price of U-Va.’s out-of-state tuition, for that matter. A four-year degree at U-Va. will remain eminently affordable for affluent Virginians, especially compared with the institution’s peers in the market, such as Duke or Georgetown. The larger payment from better-off in-staters will free up resources that the university gets from the state and elsewhere so that U-Va. can expand access to talented Virginians of more modest means. Sounds like money well spent to us.

Read more about this topic:

Fred Hiatt: In-state college tuition: A handout to the rich

Catherine Rampell: Higher education went from being a public good to a private one

Michal Kurlaender and Jacob Jackson: Obama’s free college plan is no panacea; just ask California