I was a teen age mother also, and also left home to raise my own child. I am now 41, and although I can't deny that it was QUITE a struggle with constant financial issues during the initial years, I am now 41 years old, still single, with 2 children, gainfully employed, and a homeowner. All without an ounce of help from my family.
My oldest son faced some trouble in his teen years and I do carry a bit of regret that the instability of our early lives together had contributed to that, but lie any other teenager he eventually came out of it and now at 21 is learning to become his own independent, productive young man.
You have received some good advice. No one can tell another woman how to raise her children, regardless of how young a new mother is. Maternal instinct is strong, and although your intentions are good and you really want to help her, it sounds to me like she may be feeling threatened by your help, and she is doing exactly what she should... protecting her role as mother as any momma bear would... fiercely!!! :-)
In looking at her actions from that point of view... Bravo for her!!! She has taken a critical step in motherhood.
It will be hard for her. She will need financial help, help in understanding how to navigate the world, help in setting up a home, and help in creating a vision for how she can mother this child while still building towards a productive adult life for herself. This will be hard because while doing this, she will still be very tempted by all the things that her friends are still doing - going out and having fun. It is a conflict in priorities that is very difficult to reconcile, and again, I am speaking this because I know it. I lived it. There is no shame in pointing her towards the AFDC, Food Stamps, Medical, and Subsidized housing resources that can help her provide for herself and her child until she is more on her feet. I'm sure you and your husband have paid more than your fair share of taxes to provide for programs such as these. There are employment training programs at the ESO office on Old Oakland Road, and the Santa Clara County Regional Occupation Center, and through the local Center for Employment Training (CET) offices. She can qualify for and recieve free daycare while she goes to school. Call the Santa Clara County Childcare Council (Commonly known as "4C's") and ask for referals to subsidized infant care facilities in your area. Go to the Department of Housing and Urban Development website and pull up the listing of subsidized apartments in the County, print the list, and have her go door to door and apply. She'll be on a waiting list for a while, but once she's up she can have a place of her own that she can afford. I utilized all of these programs for 2 years while I went to school after having my son. That is what they are there for. Once I had gotten through my schooling, got a job, and stayed with the job long enough to feel stable in it, I left these programs voluntarily, began paying my own way (including the $4,000 a month I currently pay in income tax!!! So yes! I WAS entitled to receive some help from welfare!!!), and I've never turned back.
Please feel free to contact me directly if you need additional information on some of these resources I've provided.
As to what you can do in the immediate situation... I would encourage you to just let her know that you love her, let her know that you want her to succeed, give her some information on some of the ways she can do it, let her choose which paths she'll want to take, and ask her what you can do to help her.
Best wishes to you, your step-daughter, and your brand new grandchild!!!
Bringing a new life into this world, no matter what circumstances that child comes into this world under is precious, and is never outside of the grace and provision of God.