Kudos to you for being such a great guy and family person. Sorry to hear about the situation. I'd spend the money and fix the 330i. I think It would be 3k tops and save the money for your daughter's college fund.
1. 2011 E82 135i DCT M-tec(Gone but not forgotten----> Totaled)
2. 2007 E90 335i JB Step(Gone but not forgotten---> grad school fund)