Like we have the ability to refund learned spells outside of our schools, we should have the ability to refund all learned spells within our school. Obviously we can't have spell-less wizards trying to save the Spiral so, in exchange for refunding one school's spells, we learn another school's. This would allow us complete and total transfer.
Maybe there could even be quests you must complete before becoming "fully transferred", all school specific. Perhaps a Diego training type deal, except with the school's teachers instead of Diego? Or maybe you must reach a certain level before being able to apply for transfer?
I do think there should be a considerable amount of obstacles in the way, such as quests and a hearty sum of Crowns, in order for students to transfer. I'd love to experience fighting as a Balance student but I'm rather annoyed and burdened by the idea of restarting.
If you want a different school then you delete the one you don't want and start over. And if you don't want to do all the questing again there is an elixir that you can get from the crowns shop to take you to level 50.