If a player is a walk on freshmen and decides to transfer, does he need a release to talk to other schools or is it only scholarship players that need a release?

Also, why does a guy like Mitch Juergens not get a scholarship? I am not debating whether he should be starting or not, or whether he is any good or not, but I do not understand how a guy can start a whole season for BYU (over 9-10 other scholarship receivers) and then still not get a scholarship. Doesn't that seem strange? If he is better than all the other guys (he must be if he is starting) then why would you not give him a scholarship and tell the 9th or 10th player on the depth chart to take a hike?