For her sister to adjust status based on that petition, the "priority date"(PD) must be current. It takes 10+ years for a PD to become current in the category "USC petitioning sibling". In the meantime, the sister has to maintain a legal status on her own.
In this case (family preferance category, not immediate relative for immigration purpose), I-485 can't be filed the same time as I-130. I-130 by itself gives no status to beneficiary, so she continues to be F1 and does not need (can't get) I-131.
I-485 in cases like this is submited when PD becomes curent, meaning Visa Bulletin shows the date in her category that's after the date I-130 was submited. Looking at the Bulletin, people on whose behalf I-130 was filed before or on May 22, 1997 (if from that area) may now file I-485 for adjustment of status or ask for an immigrant visa.