The Foyle MLA was responding to an answer from Economy Minister Diane Dodds in the Assembly which revealed that spending on higher education had been cut by 11% from £216.5m in the 2009/10 year to £192.5m in 2019/20.
Said Ms McLaughlin: “Northern Ireland loses far too many of our students to other places, because we don’t have enough university places.
“Most of those students never return, creating a serious brain drain that benefits Britain but harms Northern Ireland.
“The recent report from the Pivotal think-tank pointed out that investment in university education has actually fallen in recent years.
“The answer I have now received from Economy Minister Diane Dodds confirms this.
“Just when we needed to increase our investment in skills, her department cut its support for university education by 11%.
“Northern Ireland needs to create more jobs by expanding its economy. To do that, we must improve our skills base.
“That in turn requires increasing the number of undergraduate places at our universities, while also strengthening vocational training at the further education colleges.
“To deprive them of places and funding is a false saving that hinders our ability to create jobs.
“Scotland is able to both hold down tuition fees while not losing its students to other places – so we should be able to do the same.
“The Pivotal report warned that Northern Ireland has no policies in place to end the migration of students and talent out of Northern Ireland.
“It is essential that we urgently correct this policy failure. I urge Economy Minister Dodds to do this.”