I had to check to make sure and the lot type is Residential-Regular. I bulldozed both the house and the lot, replaced both with new but it still enables roommate service by default and crashes the game when I try to disable it. Just to be sure I even took out all mods except no CD and still the same result. There is game data in the current games folder every single time after crashing which I delete before starting up the save again.
Decided to try a brand new save with Sunset Valley and it was disabled by default like it's supposed to be. So then as another test, I saved the household with house to the bin and put into a new save and roommate services are still disabled by default. So there is something wrong with the current save file. But I'm worried anytime I travel to University am I going to keep getting this glitch or is the issue not necessarily related to sending Sims to University?