Answer:
the crew knew because the lookouts told them the passengers knew because they were told by the crew.
But fact is that most of the crew did not know what was happening. There was no communication between the boiler room (Where the iceberg did the damage) to the engine room. Also there was no alarm to tell the passengers there was a problem. So most of the passengers thought it was nothing more then a drill. I believe they found out it was not a drill when the crew lowered the life boats into the water.