Biden's student-debt cancellation goes to court today. Republicans are likely to argue the relief will cause 'enormous' financial harm to loan companies and states.

Six Republican-led states are seeking to block Biden's student-loan forgiveness.

A federal judge will hear their arguments Wednesday.

They say the relief will cause harm to state and company revenues.

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Wednesday could be a turning point for President Joe Biden's plan for student-loan forgiveness.

A federal judge will hear oral arguments from six Republican-led states that sued Biden over his move to implement $20,000 in debt relief per borrower, arguing that the relief would hurt their states' tax revenues and the financial operations of the loan company MOHELA in Missouri, where the lawsuit was filed. It's one of at least five major GOP lawsuits that have been filed in an effort to block the policy. Should a judge rule in the group's favor, the long-awaited loan forgiveness would not move forward.

At the end of last week, the Biden administration filed its first legal defense of the plan and pushed back on every argument the GOP-led states made about why the plan should be blocked, including justifying the education secretary's authority to cancel student debt under the HEROES Act of 2003. It also dismissed concerns that relief would hurt MOHELA's operations, saying that is not legally justifiable.

In a court filing Tuesday, the group argued otherwise.

"Were there any doubt of the Cancellation's unlawfulness before, there isn't now," the filing said. "Defendants' Rationale Memo, which the Secretary approved early the same morning it was completed, does not address key statutory elements of the HEROES Act, does not consider a single alternative to erasing billions in debt, and does not even attempt to justify central eligibility requirements contributing to the Cancellation's breathtaking scope."

Here are the main points the Republican group will likely address in court, according to the filing:

Financial harms suffered by debt consolidation

After announcing the relief, the Education Department said borrowers within the Family Federal Education Loan Program, which facilitated privately held loans, could consolidate their debt into direct federal loans to qualify for loan forgiveness. But at the end of September, the department revised its guidance to say that FFEL borrowers could not consolidate their debt to qualify for relief, likely in response to the looming lawsuits.

The Republicans bringing the suit said they were still being harmed by financial losses from consolidation because the process could be ongoing for borrowers who made the change before the September guidance, and they called for a pause on the debt relief and any related consolidations.

They said that to remedy "at least some of the harms already inflicted by the widespread Department-induced consolidation," borrowers should be forced to pay their lenders back for lost interest caused by the consolidation.

The Republicans countered the Biden administration's claim that MOHELA was separate from the state and that any financial losses to the company would not affect the state. They said MOHELA must report to the Missouri government and that because student-loan forgiveness would influence revenue from direct loans, "it reduces MOHELA's resources to perform these essential education-advancing functions for Missouri."

They added: "That unquestionably harms the State."

The filing also said there was "concrete and direct — and enormous" harm to MOHELA's finances brought on by the debt relief, adding that there would be a yearly loss of tens of millions of dollars in revenue if the relief went through.

The Republicans representing Arkansas, South Carolina, Iowa, Kansas, Nebraska, and Missouri all said the states could suffer revenue loss from student-loan forgiveness, even as Biden's defense said any loss was "too speculative and attenuated." While each state can operate by its own tax code, changing their laws to make them consistent with federal law would ease the burden for taxpayers and revenue officers, Biden's team said, adding: "Compelling them to undo that will frustrate those purposes."

The Biden administration has long defended its one-time student-loan forgiveness under the HEROES Act of 2003, which gives the education secretary the ability to waive or modify student-loan balances in connection with a national emergency, like COVID-19. Like many Republican lawmakers and conservatives, the GOP group said this policy was an overreach of that authority.

Emergencies are temporary, it said, adding that any response to them must also be temporary, referring to the continued student-loan-payment pauses from earlier in the pandemic. The filing also said broad debt cancellation was "inconsistent with the limited reason that the HEROES Act grants authority in the first place." It added that Biden had not shown how up to $20,000 in relief was the necessary amount to avoid financial harm to borrowers.

The public can tune in to the Wednesday hearing here, and a summary of Biden's defense can be read here.