COLUMBIA, S.C. (WCBD)- Millions of Americans, including hundreds of thousands of South Carolinians, are set to have most or all of their student loans forgiven after the Biden Administration announced a cancellation plan last week.

Under President Biden’s plan, up to $10,000 in debt will be canceled for borrowers who earn less than $125,000 and those with Pell Grants could have $20,000 forgiven. It also pauses the repayments through the end of the year.

The news left borrowers optimistic but swirling with questions, including whether they would be required to pay taxes on the canceled debt.

According to the American Rescue Plan, the forgiveness of all federal student and parent loans is considered tax-free by the federal government until 2025. And while some states’ tax codes are coupled with federal– meaning that policy would kick in at the state level automatically–others are not. That means certain states could treat the forgiveness as taxable income and collect up to $2,000.

However, that will not be the case in South Carolina, according to the state Department of Revenue.

In accordance with the Internal Revenue Service (IRS) tax code, Director Hartley Powell said forgiveness of student loans is not subject to tax in South Carolina.

In May, the South Carolina General Assembly adopted the same tax code as the IRS so that if a student loan is forgiven for federal income tax purposes and excluded from federal taxable income, then that amount is also excluded from South Carolina taxable income.

That is welcome news for the more than 734,000 borrowers in the state who collectively hold about $28.1 billion in student loan debt.

A handful of other states–Arkansas, Minnesota, Mississippi, North Carolina, and Wisconsin–do not or have not conformed to IRS codes and could be on track to tax discharged student debt.