journey of a jat, the warrior

For past many days, I have been doing quite a bit of research on the financial aid. Here's a snapshot:

Federal Stafford loans (subsidized):
Best option for US citizens / PR's. Government pays interest on the borrowed amount while you are still enrolled in school and during grace period (six months after graduation). Low fixed interest rate of 6.8%. Internationals don't qualify. Up to $8500/year.

Federal Perkins loans:
For US citizens / PR's with exceptional financial need. Interest does not accrue until repayment period, which begins nine months after the completion of all education. Love fixed interest rate of 5%. Up to $6000/year.

Federal Stafford loans (unsubsidized):
For US citizens / PR's. Interest accrues while you are enrolled. Low fixed interest rate of 6.8%. Up to $18,500/year minus subsidized loans.

Private loans:
This is what most of us need to look into with a magnifying glass. US Citizens/PR's will borrow from private loans what they couldn't finance through federal loans. And for internationals, this is pretty much the only option. Most of these loans require a US co-signer, increasing the difficulties of internationals. However, most of the top schools offer this kind of loans themselves without requiring a co-signer. They don't come cheap, average interest rate hovering around 9.5%. Most lenders (including schools) offer variable rates based on LIBOR (5.32% currently) or PRIME (8.25% currently). You can find the current rates at www.bankrate.com.

Apart from your school, you can also check with CitiAssist, Salliemae and your local credit union. There are some, very few in fact, non-school lenders that offer loans without a US co-signer. You still need to have a positive credit history in the US. Two of these that I have found are Access Group (requires three years of credit history) and Global SLC. Always look at loans offered by your school before checking out outside lenders. For e.g., Tuck offers a very competitive DELC loan to internationals with a positive US credit history. I couldn't find an outside lender that could beat this offer.

Imp: Many lenders try to entice students by offering various loan doscounts, for e.g. 0.25% APR reduction if you make 48 consecutive on-time payments. These discounts may look good on face, but they don't always work out as you expect them to. Finaid is an excellent source of valuable student loan information. Check out their take on loan discounts.