Crippling collections

Hello everyone.

I’ve been looking into buying a house with my fiancé, but a mark on my credit report has made this impossible. I took a summer class over the summer where I didn’t know my payment didn’t go through so the balance went to collections. Everything is paid off but my score decreased 150 points because of this. I called the collections company and they said that they couldn’t remove anything from my credit because that’s against the law. I called the school and they said they couldn’t do anything because they have to abide by the law and treat everyone the same.

Am I out of options?