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"Loans are an outdated, ineffective financial solution," Dehn tells CNBC Make It.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."