As a senior in high school, Greg Dehn realized he wouldn’t be able to afford the cost of going to college without the help of outside funding. Years earlier, at the age of 12, Dehn’s father was diagnosed with ALS, which left his family more strapped for cash with ensuing medical bills.
This company is tackling the student loan crisis by offering an easier way to pay for collegeBY Sydney LakeSeptember 13, 2021, 9:01 AM
Dehn realized his calling in high school, though it would take him decades to pursue. He earned a bachelor’s degree at Colorado College with the support of eight scholarship and grant programs, and later went on to pursue an MBA from the University of Chicago (Booth). About 20 years after graduating from college, he finally made that high school dream a reality in 2017 when he launched Kaleidoscope, an online marketplace for scholarship and grant awards.
Customers, including companies, organizations, and foundations pay Kaleidoscope to run its scholarship programs. It’s an end-to-end product that designs, posts, and manages scholarship applications, notifying students of their award, and continuing all the way through to the actual payout.
In the four years since its inception, Kaleidoscope has become a hub for 6,000-plus scholarship and grant programs from the private sector, dispersing more than $150 million to students in total. “While that’s a small number, and pales in comparison to the number of dollars that go out in loans, billions are given away by these private organizations, and we believe that Kaleidoscope can help [the private sector] do that most effectively and efficiently,” Dehn says.
Today, the company is launching a new Award Builder product, which will enable individuals to launch their own scholarship, award, or grant program. This new offering gives anyone who wants to help students a way to more easily provide financial support.
Award Builder also marks another avenue for Kaleidoscope to attack a problem that Dehn grappled with as a high school senior: how to pay for college. About 70% of U.S. students take out loans for higher education each year, averaging more than $30,000 of debt, according to a study from ValuePenguin by LendingTree.
“It’s years later now that I realize that a majority of kids in the United States are met with these sorts of circumstances,” Dehn tells Fortune. “It’s the right thing for the private sector to continue stepping in and helping our best and brightest get to and through college by helping them with those financial barriers.”
What Kaleidoscope offers
Kaleidoscope essentially serves as a marketplace for scholarship and grant programs. The company pairs with more than 300 organizations including the Taco Bell Foundation to post and manage scholarship applications, as well as disperse award funding and track applicant data.
The Taco Bell Foundation receives thousands of applications each year for its Live Más Scholarship, which doles out awards of between $5,000 and $25,000 to deserving applicants each year. The fund started in 2016 with $1 million in funding dispersed among 100 students, but this May had grown to a $7 million campaign given to 725 students. The foundation also gives out renewal awards so that college students can continue their studies without financial burdens.
Kaleidoscope is “just as passionate about breaking down barriers to education as we are,” Jennifer Bradbury, executive director at the Taco Bell Foundation, tells Fortune. With more than 10,000 scholarship applicants coming in each year, and growing in number, the foundation needed a more robust platform to manage the process, including posting, evaluating, and awarding scholarships. When a Kaleidoscope salesperson contacted the Taco Bell Foundation, it felt like a good fit.
Kaleidoscope has “freed up a lot of time for my team to focus on developing programs and resources to further support our scholars beyond the check,” Bradbury notes.
Kaleidoscope is getting close to hitting 1 million active users, Dehn says, with a majority being high school seniors. Other users include students applying for renewal scholarships and people who are looking to pursue upskilling programs as opposed to traditional higher education.
How Award Builder changes the game
Kaleidoscope’s newest tool breaks down barriers for individuals to host their own scholarship programs, making more private funds available to students. Award Builder matches scholarship sponsors with applicants, and hosts can track, manage, and award their programs all through the platform. Scholarship funds are tax deductible, but often serve as a way to memorialize a person or give back to a group of people.
Award Builder (and Kaleidoscope’s entire platform) also offers another alternative to taking out student loans.
“No one single source of funding is likely to fulfill the entire financial need for a student. Loans have for too long been far, far, far too heavily weighted in any financial aid package,” Dehn says. “There’s a lot more money out there from different sources, and there are other solutions like scholarships and grants that are quite effective [and] quite useful.”
What it’s like for users
Zaniya Lewis, a first-year law student at Rutgers University, is a repeat recipient of the Live Más Scholarship. She’s earned the award each of the past four years, and used her scholarship funding to pay for her law school books and laptop this semester.
This year was the first time that Lewis applied for the Live Más Scholarship through the Kaleidoscope platform. She said the move to the new platform made it easier to manage her application and select where she wanted to direct her award funds.
“Kaleidoscope makes it so easy for students to navigate [the process] and to not feel overwhelmed,” she tells Fortune.
But beyond the platform itself, Lewis says she most values Kaleidoscope for its efforts to advocate for students.
Lewis had been a victim of scholarship award displacement, meaning that her financial aid package from her institution was reduced owing to her receiving private funding. Kaleidoscope, however, makes an effort to work with students to educate them about scholarship award displacement and will advocate on behalf of students with the schools.
“Kaleidoscope is very student-driven,” Lewis says. “It’s more than I expected it to be.”