Shares of Navient Corp. declined more than 10% in mid-morning trading on Oct. 5 on heavier-than-usual volume.
The student loan company a day earlier said it struck a deal to acquire financial technology and education finance company Earnest for $155 million. The company will suspend its remaining stock buyback plan through the end of 2018 to move capital into the education lending business and build its book value.
Pennsylvania's attorney general on Oct. 5 said he had filed a lawsuit against Navient and a subsidiary over alleged abuses in their loan origination and servicing businesses. The suit is seeking restitution for borrowers, disgorgement of profits, civil penalties and rescission or reformation of all agreements between Navient and Pennsylvania consumers that were impacted by the alleged "unlawful practices."
Navient's stock was down 11.09% at $13.07 as of 11:29 a.m. ET.