。
She rents out a room to a student.
Literal
She [topic-は] student [recipient-に] room [object-を] is-renting-out.
貸す ('to lend / rent out') is the giver-side verb, paired with the receiver-side 借りる ('to borrow / rent from'). The に here marks the recipient — the person to whom the room is rented. ~ている turns the act into an ongoing arrangement: she's currently in the state of renting out, with the room as a continuing transaction rather than a one-time act. 貸す/借りる are a useful give-and-take pair in Japanese, alongside あげる/もらう (the giving/receiving of objects) and 教える/学ぶ (teaching and learning) — Japanese consistently splits transactional perspectives into matched verb pairs, where English collapses them into a single verb plus directional marking.