Published Wednesday, 30 November 2011
The latest figures from UCAS reveal the number of NI applicants for 2012 is down by 800 on this year's total.
It has dropped from 4,777 to 3,971, the admissions body said.
The rate of decline in the region is 17% - higher than the UK rate of 15%.
Adrianne Peltz from the NI Student Movement called the trend "hugely worrying" given current high levels of unemployment.
"It's hugely worrying that university applications have fallen by almost a fifth compared to this time last year," she said.
"The extent of this drop in applications to university is particularly worrying given the scant job opportunities available to young people across the UK and in Northern Ireland in particular.
"I would suggest that urgent work needs to be done to try to address this during the rest of the applications process, which remains open until mid-January."
Fees for NI students going to local institutions have been frozen at this year's rate, while costs for universities in England are set to rise in 2012.
Commenting on the statistics, UCAS Chief Executive Mary Curnock Cook said there could yet be a "late surge" in applicant numbers.
She said: "Recent changes in HE funding mean that application patterns this year may be different to previous years.
"We are gearing up for a possible late surge close to the 15 January deadline where applicants have taken more time to research their applications.
"We expect some depression of demand due to a decline in the young population but it is much too early to predict any effects from changes in tuition fees."