The Welsh government said it had introduced the "most equitable student finance system Wales has ever had".
"We've been clear, access to higher education should be on the basis of the individual's potential to benefit, and not on the basis of what they can afford to pay," a spokesman said.
NUS Wales president Luke Young said: "Even in the devolved governments of Wales, Scotland and Northern Ireland, where students will be paying lower fees, there is a knock-on effect as young people reconsider going to university.
"Although Wales has seen the lowest fall in applicants, it is deeply concerning that they may be basing their options on a funding system for English students.
"We've been clear, access to higher education should be on the basis of the individual's potential to benefit, and not on the basis of what they can afford to pay," a spokesman said.
NUS Wales president Luke Young said: "Even in the devolved governments of Wales, Scotland and Northern Ireland, where students will be paying lower fees, there is a knock-on effect as young people reconsider going to university.
"Although Wales has seen the lowest fall in applicants, it is deeply concerning that they may be basing their options on a funding system for English students.
"The drop in the number of students from England coming to Wales is reflective of the overall decrease of English students applying to university at this stage."
The number of English students applying to study in Wales is down 710 (13.4%).
The Conservatives said the drop should be a "harsh wake-up call" for Education Minister Leighton Andrews.
Shadow education minister Angela Burns said: "His wafer-thin tuition fees policy is based on a steady flow of students from England alleviating costs."
Across the UK, Ucas said applications for university courses were down 9% compared to 2011
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