Well, the university can't write: "The reason for not accepting his application are his parents. If they were members of the Party, that would be different"
But you are right, that they don't really need to give any reason for their final decision.
I believe in ideology of City states and democracy, that seemed quite working.
The problem with communism: People get lazy, especially once they build "the perfect world". They stop any research, inventions and contra-evolucion is on the scene (nah, it won't. Communism never worked long enoug for that to happen)