A federal appeals court on Wednesday will consider whether Harvard University discriminates against Asian-American applicants in a closely watched case that could impact whether US colleges can use race as a factor in admissions.

The first US Circuit Court of Appeals in Boston will hear arguments in a lawsuit brought by Students for Fair Admissions (SFFA), a non-profit founded by anti-affirmative action activist Edward Blum, and backed by the Trump administration.

The group sued Harvard in 2014, claiming it illegally engages in “racial balancing” that artificially limits the number of Asian-American students at the Ivy League school. Harvard denies the allegation and says it is legally promoting student body diversity in keeping with Supreme Court precedent.

Conservatives have long criticised affirmative action. The US justice department under President Donald Trump has backed SFFA, arguing in a “friend of the court” brief that Harvard “actively engages in racial balancing that Supreme Court precedent flatly forbids”.