Sad! I hope this doesn't happen with my parents when I invite them for my graduation. 

It often depends on the counselor who interviews the applicant. Apply again and hope that your parents won't be interviewed by the same counselor. Looks like you've done prepared good amount of documents but still, look if there's something more you can include. And check for any possible flaws/issues that need to be taken care of in the documents prepared already. 
And btw, when are you graduating? If you're graduating in April, it's too early to apply for visa and that might be a reason for denial. But if you are graduating in December, god knows what the embassy wants. MIght help if you contact the immigration services and explain how you applied and ask what you should do when you reapply so that chances of getting visa increases.
Good luck!