Ivan Gallegos, a resident of Los Angeles, was identified as the suspect and booked on suspicion of murder, police said. He was being held on $2 million bail.
Officers responded to the stabbing around 8:15 p.m. near the 700 block of West 28th Street, the Los Angeles Police Department said in a statement.
Gallegos saw a homeless man break into his car in the rear parking lot of his fraternity's house, the LAPD said. The man allegedly told the student he had a gun, resulting in the student stabbing him, LAPD Interim Chief Dominic Choi told the Police Commission Tuesday.
Police say responding officers found the victim - a 27-year-old man - who had been injured following a confrontation with three other men. The victim was pronounced dead at the scene. His identity was not immediately released.
Gallegos remained at the scene and was taken into custody without incident, police said. The two other men involved in the confrontation were released after questioning.
In an interview with Eyewitness News, a woman who manages the Delta Tau Delta fraternity said Gallegos was a USC student and member of the fraternity. The woman, who declined to be publicly identified, also said Gallegos was the person arrested by police in connection with the incident.
Last month, USC's Annenberg Media published a profile of Gallego describing him as an up-and-coming musical artist who is attending the Marshall School of Business.
USC students now on high alert
USC students who live near the university's Greek Row first learned of the stabbing when they received an alert on their phone.
"It was pretty surreal to think ... Obviously, this area gets a bad rep. You sometimes don't really see it all because it's USC and it's kind of secluded, but, to be right here, it's pretty surreal and very scary."
Other USC students said there have been frequent confrontations and altercations with homeless people in the area, stemming from break-ins and thefts.
Most students said because of that, they are hyper-aware of their surroundings once they're off campus.
"Generally, [it's] pretty safe," said student Caleb Blumenfeld. "Obviously, we're aware, and as a man, I tend to have a little more safety there, but everybody is aware that some of the surrounding areas aren't as safe."
Some living near the university also said they've noticed it's not as well-lit at night on many of these streets either, adding to the concern.
"Street lights, a lot of them, you'll find, are out," said student Hugo Munoz. "What's happening is they're tearing out these boxes and selling them, getting money for them, so they're taking the copper wire, it's a whole thing around here."
While USC students there for the summer are not completely surprised by the confrontation, they're shocked and saddened that someone was killed just feet from their fraternity.
"It's tough to navigate because USC, the area we're in, we're in like a low-income area. That's just how it is, you know, by nature," said Andrew Maxwell. "It's kind of hard to navigate not disrupting those residents, but also making sure that the students have a safe environment at the same time."
City News Service contributed to this report.