Well thank fuck they aren't married! At least she (hopefully) won't be liable for his debt.
Here's my 2 pennyworth
1-If Sister is financially dependent on this man in any way or there are financial 'ties' (joint accounts, home ownership, credit cards) that will affect her, she needs to know. Your primary concern should be her security and that of her child.
2-Borrowing from your 80 yr old dad. Well, there's no fool like an old fool. If he's lending money he cannot afford to, unless there is some other issue (dementia, bullying, emotional blackmail, etc) then that's between him and your dad.
3-If you don't tell her, the chances are that when (not if) this debt surfaces she will eventually find out that you all knew and said nothing. IMO, this is going to damage your relationship with her much more than telling.
But, this appears to be third or fourth hand information, i.e. a 'source person' told SiL who told your parents who told you. Probably the best thing to do would be to tell not-BiL that you've heard that he has debt your sister doesn't know about and that if he doesn't tell her, you will.