More than 44 million Americans have taken out loans to pay for college and their debt totals $1.4 trillion. For those in their 20s, the average loan debt is $22,135. For those in their 30s, it's $34,033. And 60 percent of borrowers don't expect to pay off their loans until their 40s.
Gregory Dehn, founder and chief executive officer of Kaleidoscope, which connects high school and college students with grant and scholarship providers, offers a fix.
"Loans are an outdated, ineffective financial solution," Dehn tells CNBC Make It. "[They] not only create future debt burden, but are not large enough to improve persistence and degree attainment. We need to stop supporting students with half measures.
"It is our belief that grant dollars, smartly deployed and accessible, are the answer."
Kaleidoscope's aim is to provide $1 billion to students in increased access to grant and scholarship programs from small organizations "that would love to support students and employees," but can't due to the high costs of setting up an organization and disbursing funds.
"Today, scholarship funders sacrifice their brand, goals, and, often, more than 10 percent of their funds to service providers in order to reach the students most in need of their support," Dehn says. "This results in their goals not being met, fewer dollars going to students and a high-friction, poor experience for student applicants."
We need to stop supporting students with half measures. Grant dollars, smartly deployed and accessible, are the answer.Gregory DehnCEO of Kaleidoscope
"We trigger a network effect [that's] attractive to both [students and funders]," he says, "and creates valuable data resources to ensure financial products are designed in a way that is effective and efficient."
Creating a network that aids students in the search for loan alternatives could ease the burden for many borrowers.
Dehn points out that 90 percent or more of first-generation students don't graduate on time largely because of the need to work 20 hours or more each week to supplement their educational expenses.
That doesn't leave them with enough time for school, let alone for enrichment generally. "The burden of student loan debt can prevent people from realizing their full potential as they have to forgo opportunities that don't meet monthly financial obligations, but could further their potential, like internships that don't pay, gap years or passion projects," he says.
Mark Zuckerberg's side project, a small social media website initially built for Harvard University students, became Facebook, a global company worth $27 billion in revenue last year.
Dehn's advice to millennials: Apply for grants. Take advantage of scholarships.
He says they should "continue making the investment in themselves and not let the cost of education deter them."
And, in addition to looking for additional funding, discuss with your manager at work ways that companies could help ease the burden.
"Many employers are thinking about ways to increase retention of their millennial members," he says, "and are open to win-win outcomes."
For instance, these employers will help you pay to go to college.
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