My limited experience with dying over a stain is that the stain shows up as a darker area anyway... but maybe with a dark enough color it would work.

Have you tried re-washing the sweater to see if the stain comes out easily that way? Depending on the fabric, you may be able to use some stain removers, too, but I'd start with washing it the same way you originally did and see if that doesn't take care of it. Dry cleaners can often get out things, too. It would be helpful if you knew for sure that the stain was from the towel and not something else -- that will affect what treatment you may want to try.

Good luck!!

yes, I have rewashed it twice.Stain is still there.
thank you

from the old days of "baby spit-up" stains - I would soak the item in warm water that I had dissolved some dishwasher soap it (Electrasol/Cascade or no-frills brand) - this generally removed the stains and did not bleach out the colors. You may want to try it and since the sweater is white, it should be fine. This "solution" is also great to soak grease or burned-on food in roasting or frying pans.

I highly recommend using waterless hand cleaner......that goopy white stuff in a tub, made for mechanics to clean their hands with. Years ago I spilled cooking oil down the front of a Tencel dress, and could NOT get it out....washed and spotted it several times, with no luck. My husband had just read about using the waterless handcleaner to get grease out of clothes, and suggested I try it......as the dress was unwearable, I did....and, wonder of wonders, it worked. Since then I have used it many, many times, with great luck...sometimes you have to do it a couple times, but it really does the trick. You work it into the spot, being sure it goes all the way through the fabric...let it sit for 20 minutes or so, then wash. I've given tubs of this to all my friends, and keep it in bathroom and the laundry. The only caveat is to NOT use the kind that has an abrasive added to it....pumice, in many cases....you wouldn't want to be rubbing with an abrasive.

this is a great suggestion; I have also used GOOP for spots but I was in "baby" mode when I posted. I have also used shaving cream and worked it into spots letting it sit for awhile - sometimes needing more than one application - but I got a permanent black magic marker stain off light khaki Dockers using shaving gel

Try a small amount of dawn dish soap. My sister took color spots out of a dyed dress she needed to wear to my daughter's wedding with it-when color remover didn't work.