Ist of all the colege is responsible for its foreign students. So its their duty to inform you of the laws both local and federal. So that email is to cover herself saying she did warn you guys(she is supposed to alert INS of any unlawful activities). The other point about transfering .... SHE HAS NO RIGHT TO INTERFERE IF YOU WANT TO TRANSFER TO A DIFFERENT SCHOOL. But you do need to get a acceptance letter before you can transfer though. If they are holding your transcripts or something like that because you did not pay your tutions is another thing. If the bills are payed and you want to leave... THEY CANNOT STOP YOU.