My vote is for pricing the converter around (assuming the diagnosis is correct) and keeping the car.
I wonder how many engines across the U.S. are damaged or destroyed each day because of low or no oil.
The OP also needs to be aware of the fact that even if the oil pressure light is off that does not mean things are fine. It takes roughly 3 to 5 PSI of oil pressure to turn off the light but that is not nearly enough to protect an engine nor does it have anything to do with oil consumption other than the fact the light comes on when things are about to go south.
What do I know, but I think I’d look for a different mechanic. I know cats can be expensive but you’ve spent a lot of money on this car. But can you even sell a car out there that won’t pass emissions? Fix it and sell it and rent a car for trips, or lease a car with a warranty and you’ll be money ahead. The Professor makes some good points. Main focus now should be school and not cars.
Yes, fix the car. The money you already spent is a sunk cost, i.e. you’ll never get that back. If you sell the Highlander as-is with the CEL illuminated and expired emissions, it is unlikely you’ll get more than $1000 for it. No one is going to pay more than “for-parts” pricing for a car that they can’t register and drive.
Also, the cost of the repair is far cheaper than the cost of the alternative, i.e. buying a different used vehicle. A different used vehicle, even a newer one which costs a lot of money could still have hidden problems of its own.
Get the catalytic converter. Graduate students hardly make enough to live on, let alone spend money on another car, unless it’s priced like that converter. Unless your degree is in science or engineering and you get a job in private industry after graduation, tight money will continue.
Joshua, sorry for the loss. Since nobody else has said it, I will: when your mechanic used the term “blow-by”, that term is synonymous with “it burns oil”.
I think that the other mistake you made was to buy an aging car that was once expensive, which probably cost more used. BUT, I now agree that since you have the history and have replaced the worst, keep it and spend your time getting out of grad school.