KBB is probably close on what you could get. As for what to do, it all depends on what your end goals are for a car.
You could look at it several ways. Since the car was given to you then you could keep the 3500 you saved in the bank for a rainy day and just drive the Cavy til you graduate. If you really don't want the Cavy then you could try to get as much out of it as you can, and add that to to money you had saved to get a newer car (or whatever car you are looking for)
As long as the Cavy is still reliable then there really isn't a wrong answer here.