One of the students, however, said they were dressing as purple space aliens for a party with a galactic theme.
The episode at Stellenbosch University comes amid heightened debate on social media about racism in South Africa, which became a multi-racial democracy after the end of white minority rule in 1994.
University spokesman Martin Viljoen said today that the university is aware of "new evidence", a reference to the account about alien costumes, and that an investigation is ongoing.
"Stellenbosch University condemns all forms of racism and discrimination and acknowledges the severe negative impact of the pain and trauma experienced by students, staff and members of the public," the university said.
One of the suspended students, Poekie Briedenhann, said there had been a misunderstanding because the dark purple paint and glitter for a "stellar space" party "appeared as black," South African media reported.
In 2014, two white students at Stellenbosch University were accused of racism after painting their faces dark to portray tennis stars Venus and Serena Williams at a costume party. They expressed regret.
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