well, definately charge him the $500.. at least. but I would probably go to him and tell him he's got 3 options
1: clean the place himself, including hiring an exterminator, carpet cleaner, and whatever else needs to be done.
2: pay the $500 (which seems such a little charge for such a big mess)
3: take it up in court, and try to plead to the judge about why you don't need to pay $500 when you literally would have had to been purposely trashing the place to get it to look like that.

don't hate all college students for this though, we aren't all that irresponsible :o