What's the difference between a 529 college savings plan and a 529 prepaid plan?

Both are "529 plans," but they work differently. A 529 savings plan is an investment account: your contributions go into portfolios of stock and bond funds, the value rises or falls with the market, and you withdraw the balance tax-free for qualified education expenses anywhere. A 529 prepaid plan instead lets you buy future tuition credits at today's prices, locking in costs at participating (usually in-state public) schools regardless of how much tuition rises. The savings plan offers flexibility and growth potential but carries market risk; the prepaid plan offers cost certainty but limited school choice and less flexibility if your child goes elsewhere. Most families today choose the savings plan for its versatility. If you're confident about an in-state public school and want predictability, the prepaid version can complement it.