Dad in debt rents house on Airbnb to pay
- George Botelho owes over $273,000 in student loans that helped his children go to college.
- He lives in his basement and rents his house on Airbnb to meet monthly payments.
- He wants the Biden administration to consider relief for those who pay child support on top of their student debt.
George Botelho, 58, said the student loan process “baffled” him, even though he had gone to economics school.
He certainly didn’t expect to have to pay more than $273,000 in federal loans about a decade after his two children graduated from college.
“With the income I earned, it was the only way for him to go to college,” he told Insider of his son, who attended Berklee College of Music and now works as a music producer. Her daughter attended Boston University and works in a lab. The insider verified his debt balance via documents.
Like many college students, Botelho’s kids weren’t eligible for much federal aid, he said, so he emptied $50,000 from his college freshman savings account. son. For the rest, the two children of Botelho took out loans. Shortly after graduating, he took on the debt under his own name and consolidated the loans – he didn’t want it to have a negative impact on their credit.
“I think my mistake was probably thinking I had control over it,” he said. “I should have done everything I could to keep it on behalf of my children.”
Bothelo loans are issued through a program called Parent PLUS, which are federal loans that parents can use to pay for their children’s education. Unlike most loan types, PLUS loan amounts are not based on a person’s income and ability to repay, but rather on the cost of their child’s school attendance, minus the financial aid. PLUS Loans are the Very expensive type of loan and have the highest interest rate — 7.54% — compared to 4.99% for undergraduate loans, which means debt accumulates much faster for families.
And while Biden is reportedly considering a $10,000 discount for student borrowers earning less than $150,000, it’s unclear whether PLUS loans from parents will be part of that plan.
As an excavation contractor who performed work for the Federal Aviation Administration, Botelho was approved for Cancellation of civil service loans. This program aims to cancel the loans of eligible borrowers after 120 eligible monthly payments under an eligible repayment plan while working full time. But the program proved flawed, rejecting 98% of all applicants.
Although Botelho is hopeful he’s on the path to forgiveness, he said between those monthly payments and weekly child support payments, he’s been short on money. This led him to move into his basement and start renting out his house through Airbnb three years ago.
“It makes paying child support bearable,” he said. “Fortunately, I get a lot of repeat customers.”
“I’m afraid that the next calculation of the monthly payment will be the end of me”
Botelho pays his ex-wife $320 a week in child support. His monthly income-based student loan payment is about $970, which he pays to a company called Platinum Debt Service. He owns his own business and his take-home pay is about $1,600 a week, so alimony and student loan bills make up more than a third of what he earns. He brought in about $31,000 through Airbnb last year, though he said repair and maintenance expenses limit his profits. Insider verified these numbers via documents.
He also said paying loans and alimony meant he couldn’t afford a personal car, which is why he ended up living in his basement.
“The temporary suspension of student loan payments during COVID was helpful, but I got off on the non-payments very quickly,” he said. Because the discount is based on reaching 120 monthly payments, he didn’t want to extend his debt further. But these payments are heavy.
“I’m afraid the next monthly payment calculation will be the end of me,” he said.
Botelho added that he felt stuck on a federal loan. He has the option of refinancing his loan with a private company at a lower interest rate, but he doesn’t want to compromise the security of having a government loan.
“If things go wrong, or if I start losing work, or if I get injured, I can abstain,” he said. Forbearance is a period during which you can stop making payments on your government loan without penalty, but in most cases interest accrues. Private lenders does not always guarantee that you will be able to abstain.
He said he wants the federal government to consider at least partial student debt relief for people paying alimony or child support.
“I always felt it was my duty as a parent to provide a college education, like my parents did, to my children,” he said. “I accept the burden as a single parent, but I would like to see some form of relief in the Biden administration’s student loan forgiveness plan, even if it’s in the form of At least the income-based monthly payment will be based on a “realistic” determination of what a parent can afford.