WHAT IS BEST FOR THE DOG? (like Sparks says)
In all honesty, while I most emphatically do not condone frivolous reasons for giving up a dog and I don't condone irresponsibility of forethought when aquiring a dog, I really don't think the dog is going to suffer so terribly badly by being re-homed into a good home.....as long as the dog gets proper and kind training by an experienced person and gets any care it needs.
Dogs, IMO don't think like humans in that they don't languish for a very, very long time when their owners are not there anymore as long as someone serves as a good and loving leader to them. Some may be stressed a little longer than others.
I don't equate this exactly with dumping a dog off at a shelter or on the side of the road with no thought or care of it's future. If diligent steps are taken to find this dog a GOOD home, then the dog will not suffer much at all. IMO. Humans, on the other hand, when a loved one is gone are affected for a very long time because we have bigger and more convoluted brains, we're much more complex that way. We re-trace our lives with them, think about what might have been in the future if they were still with us, remember conversations and wish we could talk to them again. Dogs, I believe feel sad and bewildered for a little while because what was familiar to them is gone. They feel insecure. But they're not going through all that in their heads I don't imagine. In a few weeks or so, most dogs seem happy as ever with a new owner, which can be attested to by loads of people who adopt dogs at an older age.
If I could not scrape together enough money to take care of my ill dog's needs, if I couldn't have afforded his very expensive medical procedures, drugs and special diet, I would have to re-home him so that someone could. It would just about kill me to have to do that. But if I couldn't eat or keep a roof over my head, I would have to. Somewhere a line has to be drawn. Perhaps the line isn't drawn very clearly for the OP, but nevertheless, maybe we don't really know that since we're not in her shoes. It doesn't seem like the line is there yet, but again....if she doesn't have the stuff it's made of that the dog needs, (perhaps due to her childhood background) he may be better off re-homed. I wouldn't recommend fostering him out for a while and then taking him back. That's too much. Find him a good forever home and take care of your life before getting another dog.
And by the way....I do not believe either that your dog is being protective. A lot of people like to think this when their dog bites someone when they're around...naturally. Who wouldn't love it that their dog protects them? Most do not. This is probably undersocializing, bad experiences....something. Confident dogs protect and don't fly off the handle about it at the wrong reasons. Insecure and undersocialized dogs over-react to inappropriate situations and people. Their goal is to increase flight distance and instead of fleeing, making the other thing go away is more their style of creating space.
Aggression or defensiveness (I prefer to call it) can be fixed in many cases when handled in a systematic, gradual desensatizing fashion. Lots of "aggressive" dogs are rehabilitated.
Anyhow...what is best for the dog at this point? Isn't that the main thing?