EDIT: I guess this rule was rescinded.
A few years back Kevin Kruger graduated from Arizona St. and came here to UNLV to play for his father Lon under the existing rule. I believe the rule was changed shortly after that. Here in Vegas they were calling it the "Kruger rule".
Yeah, that also was the case in football. I believe a safety played for Urban Meyer at Utah, graduated and transferred to Florida when Meyer went there, and started on his first "national championship" team. Frankly, I don't see the problem because it at least encourages kids to graduate.