Xerox Business Services, already one of the smallest student loan servicers, is in an even weaker financial position following the spinoff of its parent company, Conduent, From Xerox Corp., according to Moody’s Investors Services.

In a report published Monday, Moody’s said the split, which was completed Jan. 3, has weakened the durability of the servicing operations under Conduent and increased the likelihood of financial distress of the servicer.

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