Typical college experience right there. Her parents will cut her off if she lives off campus wth??! Has your fiance actually talked to them seriously like "this is what I have to put up with?" Honestly if you are working and can get a job down there I would move down there for her as no matter where she goes in the dorms it will be reatarded. I'm not trying to put any age group down put from my personal experience(and having gone through it all and been that age) 18-21 year olds are THE WORST. Everything revolves around drinking or smoking or getting laid, almost nobody takes anything seriously and EVERYONE has it all figured out already, you can't tell them anything. Plus most schools just look the other way because it is easier... I was in USAF dorms though so when people did stupid stuff and it got reported there were actual conseqeuences. Out of probably 20 people on my floor I know of at least 4 who did for sure jail time for things I saw in college that got swept under the rug.
Cliffs notes: Your fiance will keep experiencing similar stuff unless she has her own room or moves out. Her parents should let her live off campus, pay for a single room or if you can move down there and rent an apt for both of you then do that. I really hope it gets better for her, my wife had to deal with this same crap when she was in college and my sister is going through similar things right now.