It sounds like the dad has a job and his own place to live, so maybe they have a plan for supporting the child. I suspect both are old enough to understand their options. This is a tough situation, but if OP suggests that they end the pregnancy or put their baby up for adoption they may end up resenting her. Her grandchild probably won’t be thrilled when they find out either.
They’ve apparently already discussed it and it sounds like they plan to raise the baby together. If they separate and OP’s daughter can’t raise the child on her own then custody would probably go to the dad. He wouldn’t be the first single dad to have primary custody of his children.