So a grandmother in Illinois can buy her state's plan for her grandson, even though he lives in Texas. Connecticut, Delaware, Indiana, Iowa, Massachusetts, Montana, New Hampshire, New York, Rhode Island, and Utah have flexible plans that are open to residents of any state. Going outside your own state plan has risks. You can miss out on tax deductions your home state's plan may offer. Unlike an IRA, a tuition plan gives you little choice in how the money is invested.
Pros manage the money.
Fidelity is doing the job for Delaware and New Hampshire. TIAA-CREF, which manages the huge teachers' pension fund, runs the New York plan. They invest conservatively, perhaps too much so. They won't guarantee you'll earn enough to pay tuition, as do the prepaids. Most plans allow the funds to be transferred to another family member.