This study investigates the perceptions of teachers and students toward formative assessment (FA) in higher education settings. The researchers developed a four-construct perception scale, namely self-assessment, interactive formal assessment, in-class diagnostic assessment, and subjective assessment. Data were collected from 216 participants--91 teachers and 125 students. The findings demonstrated that both teachers and students have identically perceived interactive and in-class diagnostic assessments. Nonetheless, they distinctively perceived self-assessment and subject performance assessment demonstrating a significant difference. The students reported self-assessment greater than the teachers, whereas they perceived the subject-performance assessment lower compared to the teachers. The findings suggest that English as a foreign language (EFL) or English as a second language (ESL) learners benefit from formative assessment if teachers evaluate students' progress based on their own development rather than being evaluated in comparison to other students' development.