Vice Chancellor Professor Pal Ahluwalia said a spike in the cost of hiring a venue was also a concern for the university.
Mr Ahluwalia said arrangements for the graduation venue were usually finalised by now but with the pandemic, this had not been possible.
He said the USP's regional graduations would not go ahead as students and their families would not be able to travel.
Mr Ahluwalia said the university would hold a ceremony where about 100 people could attend to honour its gold medalists and high performing students.
