What requirement is specific to closed-end education loans under Regulation Z?

The correct answer is the right to cancel the loan within 3 days after closing. This provision is part of the Truth in Lending Act (TILA) under Regulation Z, which aims to protect consumers in certain types of credit transactions. Specifically, for closed-end education loans, borrowers are afforded a cooling-off period during which they may reconsider their decision and cancel the loan without incurring penalties.

This right is aligned with the broader principles of transparency and consumer protection that the regulation embodies. The rationale is to ensure that borrowers have an opportunity to fully understand the terms of the loan and to make informed decisions about their financial commitments.

In contrast, other options do not accurately reflect the specific requirements pertaining to closed-end education loans under Regulation Z. For example, while upfront fees may be associated with loans, they are not a mandatory requirement unique to closed-end education loans. Similarly, the interest rates offered can vary widely based on many factors, and they don’t have to be higher than personal loans specifically under Regulation Z rules. Lastly, the self-certification form requirement exists to verify student status, which is a crucial aspect of the loan application process and is not dismissed or made optional by Regulation Z.