You've come a long way, congratulations! At this point, you should feel comfortable with building new Rails applications, modeling data, and working with forms. This project will require you to put all your newfound knowledge to the test. It should serve as a great portfolio piece for what you're capable of. It'll take some thought and time but it's certainly within reach of your skills.
You'll be building Facebook. As usual, any additional styling will be up to you but the really important stuff is to get the data and back end working properly. You'll put together some of the core features of the platform -- users, profiles, "friending", posts, news feed, and "liking". You'll also implement sign-in with the real Facebook by using Omniauth and Devise.
Some features of Facebook we haven't yet been exposed to -- for instance chat, realtime updates of the newsfeed, and realtime notifications. You won't be responsible for creating those unless you'd like to jump ahead and give it a shot.