After some special team experience as a freshman at USC, Allen spent his sophomore year playing fullback. The switch happened early in the season when tailback Charles White injured a shoulder during the first game, and Allen filled in as the sole fullback offense. He logged more than 100 yards rushing during that first game and spent the rest of the 1979 season at fullback, blocking for White, who won the Heisman Trophy easily that year. The Trojans went 10-0-1 and beat Ohio State University at the Rose Bowl, 17-16. Allen contributed a total of 649 yards rushing, 314 yards in receptions caught, and eight touchdowns scored that season.
For the 1980 season Allen moved into the starting tailback position. It was a demanding position to play and an eye-opening experience. As tailback he was preceded in the job by such USC legends as O.J. Simpson. Allen performed admirably, racking up 1,563 yards that season.
With the Trojans ranked at Number 1, Allen set a personal goal of rushing for 2000 yards during his senior year; it was an unprecedented benchmark. After logging 210 yards in the season opener against Tennessee, he rushed for 274 yards against Indiana the following week. In the third game, a win against the Sooners of Oklahoma, Allen made 208 yards on 39 carries. He made 233 yards against Oregon the following week a the Trojans triumphed 56-22.
The crushing blow of a mid-season loss to the University of Arizona was softened for Allen by the satisfaction of rushing for 211 yards, including a 74-yard touchdown run. Two low-yardage games of 153 and 143 against Stanford and Notre Dame respectively were cause for celebration regardless, as USC won both games. He rushed for 289 and 243 yards against Washington State and the University of California at Berkeley respectively and faced his last two regular season games with a running total of 1,968 yards.
In a freezing rain at Washington that season, he surpassed the 2000-yard rushing mark. He ended his college career with 2,342 yards and won the Heisman Trophy that year.
Allen went to Al Davis's Raiders in the first round of the 1982 National Football League (NFL) draft. With a whirlwind of agents offering contracts, Allen hired attorney/agent Ed Hookstratten who negotiated a $150,000 contract for Allen's first year, plus a $400,000 signing bonus.