Now that I am putting my second child in college and suffering with the woes of the housing recession, I had to apply for a Stafford student loan for one of my kid's tuition this year.  Immediately after applying, my son had to take a test on the loan process.  This used to be required for certain types of mortgages at one time, didn't it?  I vaguely remember having to have this done for some buyers when I first got in the business several years ago.  Do you remember?  I think this is a still a wonderful idea that we need back in all types of lending.

Also, in my opinion, 12th graders nationwide should be required to take and pass a personal finance course to help them budget, save and invest, including a thorough chapter on credit scoring and how to maintain a good credit score.  Also, there should be a chapter on credit card ripoffs and predatory lending practices.  A course on finance company raping practices and one on those title loans and paycheck loans that some states still allow.  Finally, one on the mortgage process and how to get financing for the American Dream.

The course should get into credit collection companies and how they sell your collection to others and keep on reporting beyond the 7 years and how they are now reporting down to $1 collections and how this can kill your score, even on medical collections.

Now, back to the Stafford Student loan counselling idea.  I think everybody that applies for credit: credit card, installment loan, student loan, mortgage, etc., should have to take a short online course and test and they must pass to get the loan.  Right now, with the credit tightening and collection industry automation, it is getting to the point that 75% cannot get a mortgage right now and something needs to be done about it.  Our country is functionally credit illiterate.

Any thoughts?

Sam Thompson, PHH Mortgage 843-230-7929