K.N.
Unfortunately, most college students at 21 can't realize how much her life is going to change or things she needs to do to prepare for motherhood.
She probably has no idea how expensive a baby can be. Nor how much time it will takes and how disruptive (and admittedly rewarding) motherhood can be to a twenty something's life plans (and perspective on life). You know, because you've done it before...
The father might continue to be in his child's life (let's hope so); hopefully he can continue financial support, however he also might be deployed somewhere long-term, which means, essentially she's a single mom and probably won't be able to call on him or his family (or won't feel comfortable?) for the daily childcare needs of the baby. (I'm not knocking single moms, just acknowledging its so much harder when you're the only one rowing the boat.)
Since you are still semi-supporting her, the reality is that you might be the one who ultimately has to take on more than just a grandmother role... maybe you're in for a part-time mother role? Maybe she'll ask to depend on you for daily child care when she discovers how expensive daycare is, but necessary for a student's class schedule and homework demands? I assume adoption (or open adoption, which would allow her/you to have knowledge/contact with the baby?) is out of the question....? Sorry if I sound pessimistic. It just sounds like a demanding next 5 years for the both of you... or should i say, the three of you.