The judge who questioned the merits of the suit Tuesday said the parents' lawyers would have 20 days to amend and refile the case.
The students were fatally shot in April while sitting in a car near the campus.
The parents claim they were misled about safety provisions for USC's international students and were not told the campus is in a high crime area.
USC attorneys, who are seeking to have the lawsuit dismissed, say the university is not responsible for off-campus crimes by people not connected to the school.
A plaintiffs' lawyer said he will amend and refile the suit.