A 529 plan is an education savings plan operated by a state or educational institution, designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.
State 529 plans can be applied toward out-of-state colleges.
529 plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a California resident, invest in a Vermont plan and send your student to college in North Carolina.
There are two general types of 529 plans.
If you decide to use a 529 savings program, the full value of your account can be used at any accredited college or university in the country (along with some foreign institutions).
On the other hand, states offering prepaid tuition contracts covering in-state tuition will allow you to transfer the value of your contract to private and out-of-state schools (though you may not get full value depending on the particular state).