Abstract: A multi-pool method of providing loans is performed by receiving a batch of loan applications from a lending entity. Selected loan applications are identified for a first pool and a second pool. The first pool consists of loan applications from borrowers with a better credit rating than the credit rating of borrowers corresponding to the loan applications in the second pool. Loans from the first pool may be purchased. A third pool of funds is formed in exchange for purchasing (by a third party) other selected loans. This third pool may be formed for the benefit of the lending entity, such as a school. Funds from the third pool may be used to offset defaulted loans in the first pool.