What’s a prepaid program?
There are two types of 529 plans: prepaid programs and savings programs. Prepaid plans are designed to cover in-state tuition costs. Some of these plans allow you to transfer the value of your account to private and out-of-state schools, although you may not get full value depending on the particular state. Most prepaid programs aren’t designed to cover the full expense of college tuition, room and board, and other expenses, so if you choose to open a prepaid plan, you may want to consider opening a 529 savings program, as well. Schwab offers 529 College Savings Plan.
