Can the high school not give me my diploma for an overdue book?

Pay the fine, get your diploma, leave the school.

Then get your revenge. Publish accounts of your experience there in all important places. On the school facebook account. On local review sites. On local newspaper sites.

It won't be libel if you present it as your own experience or your own opinions.

You have two choices. The first one is to "stick to your guns," "dig in your heels," and refuse to pay the fine. The school will react in two ways. First, they will "hold" your diploma, so you will not have the fancy piece of paper to hang on the wall. Second, they will place a "hold" on your transcript so that when you apply for jobs or colleges, you will not be able to prove that you graduated. Your second choice is to knuckle under and pay the fine. You may very well be correct in insisting that the school doesn't deserve to get anything more from you, but refusing to pay them is a classic example of "cutting off your nose to spite your face." You are the one who will suffer, not them. They can sit there happily for decades refusing to release proof of your graduation, and every time you need it, you'll be blocked from doing what you want to accomplish. It would appear that the wise decision is to swallow your pride, pay the fine, get your diploma, and move on.

Same applies in the UK. If you owe anything you don't graduate.

Those are the rules.

Unfortunately yes they can hold your diploma because of a book. It has been done before and that person had to pay for the book in order to get their diploma