This analysis addresses the financial sustainability of Mexican public universities amidst budgetary challenges and the growth of bureaucracy [1]. It compares the economic and social impact of cutting student scholarships versus reducing administrative costs and proposes structural reforms to optimize resources, ensuring these institutions remain competitive and capable of producing professionals aligned with future needs. The research involved reviewing university budgets and resource allocation trends since 2018, along with a comparative cost-benefit analysis of scholarship cuts versus administrative reductions, based on historical data and case studies. A detailed study was also conducted on UAM and other public universities to evaluate their administrative structures and associated costs. Since 2019, public universities have not received significant budget increases, limiting their capacity for expansion and investment in essential areas. This issue is exacerbated by the growth of bureaucracy, particularly in institutions like the Universidad Autónoma Metropolitana (UAM), where a substantial portion of the budget is allocated to seniority-based compensations, bonuses, and administrative structures. The following optimization strategies are proposed: a) Resource rationalization: adjusting schedules, spaces, and vacant positions, as well as eliminating redundant administrative structures. b) Administrative modernization: reforming university organic laws and promoting research projects aimed at administrative efficiency. Cutting student scholarships would have a negative impact on educational equity, affecting low-income students and limiting access to higher education. In contrast, reducing administrative costs would strengthen the educational mission of universities by ensuring that resources directly benefit students and enhance academic quality. Between 2019 and 2024, scholarships supporting the education of students, professors, and workers decreased from 203.485 million to 199.394 million pesos in nominal terms. Similarly, scholarships and economic incentives for professors based on their research and teaching performance declined from 1,266.303 million to 1,240.923 million pesos during the same period. In contrast, high salaries have remained notably stable since 2018. A significant part of the issue is the increasing severance pay and year-end bonuses for long-serving staff, many of whom are UAM officials. These payments rose substantially, from 1,069.068 million pesos in 2019 to 1,396.452 million pesos in nominal terms by 2024. Data shows that reducing bureaucracy is a more sustainable and equitable solution in the long term. Failure to act could lead to drastic government budget cuts and a loss of relevance in the face of increasing competition from private institutions and from new national universities created by the previous and current federal administrations [1]. Striking a balance between reducing administrative costs and preserving scholarships is key to securing the future of public universities as pillars of national development as it is proposed in this paper.

[1] X. Mejía, “Universidades deben tener más austeridad; Sheinbaum: ha crecido mucho su burocracia”. Excelsior, 30 november, 2024. Retrieved from https://www.excelsior.com.mx/nacional/universidades-tener-mas-austeridad-sheinbaum/1687181.

Keywords: Scholarships, educational equity, resource optimization, Mexican public universities.