I wouldn't suggest a Nook for a college student -
they don't download books from the public library and if she is an English major she's going to be able to find most of her literature choices for free at the
Amazon bookstore - my daughter did. One semester her total for her American lit class was $10!
The new Kindles have the new Pearl screen and the resolution is much better than the previous Kindle or the current Nook. I'm sure B&N will upgrade those screens in the next release, but public library access is just not important to a college student.
Both B&N and Amazon have apps for all sorts of products. I have a Kindle app on my iPhone and my iPad. But I would NEVER consider not getting a real ereader - no one I know who reads a lot would be willing to use a phone to do it on, and the iPad isn't the best ereader either - much too heavy for me and problematic for me with the backlit screen.
OP, get the $189 Kindle - it's the best on the market right now and she will be thrilled. Order a case, too - M Edge makes an excellent leather cover for all the Kindle products, and the new Amazon lighted cover is nice, too. That will put you a little over budget but it's worth it to get a case that will protect the reader.