USC's hold "prevents the students from registering for classes or acquiring transcripts while their cases are under review," the university said Monday.
It did not say how many students are affected, but said those students have been notified.
"Following the review, we will take the proper action related to their status, up to revoking admission or expulsion," the school said.
USC is one of at least eight universities affected by the biggest college admissions cheating investigation ever prosecuted in the US.
Fifty people -- including actresses Felicity Huffman and Lori Loughlin -- face federal charges.
The scheme allegedly involved wealthy families paying between $15,000 to $1.2 million to Rick Singer, CEO of a college application prep company.
Singer has admitted that he helped facilitate SAT and ACT test cheating. He also admitted to bribing college coaches or athletics officials to recommend certain students for admission -- even though the students, in some cases, had never competed in those sports.
One day after news broke of the cheating scandal, USC said all applicants connected with the alleged scheme will be denied admission.
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