Police say a 20-year-old Macquarie University student allegedly awoke to find a man assaulting her in her bedroom on Thursday morning.
The attack allegedly happened in the student housing accommodation in Marsfield.
A 21-year-old asylum seeker was arrested at Sydney's Central Station this morning and has now been charged with indecent assault and aggravated break and enter.
He has been refused bail and will face court tomorrow.
The Department of Immigration has confirmed the man is in Australia on a bridging visa but says he was not among a group of asylum seekers who were staying at the university.