What can be done legally if my school will not release paid undergrad transcript?

Sorry, this is not in my area of expertise. I have never heard of something like this. Why is the school giving you an "advance" of $6000? And how could you be in graduate school there without a transcript? Something does not seem right here. You graduate and get your diploma and transcript which you would need in applying to graduate school. If accepted you then make financial arrangements separately for that so any advance would be after acceptance. So I don't understand how the scenario you write about is possible. Is this school one of the for profit entities out there? I think you need to carefully read all of the documents promulgated by this school especially the provisions pertaining to finances and loans. Once you have done that you need to personally meet with someone higher up in the administration if this is a local institution. It could be a Dean of Student Affairs or Financial Aid. Regardless of the title, it has to be someone who is in a position and who has the authority to solve your problem. As a last resort, school officials are cowards, at least at the typical educational institutions (not the for profit places). They do not want sued. If necessary, a letter to the school from an attorney may help to get the point across that the school needs to release the transcript.