Direct measures of assessment require students to demonstrate what they have learned through an instrument, like a paper, demonstration, portfolio, performance, or achievement test. This is different from indirect measures, which are proxies of what students have learned.
With indirect measures, the assessment information is filtered through the student or other party. A student can tell us what they think they learned through a survey, but it is their opinion of what they learned. Indirect measures are good at revealing what and how students learned.
The Dimensions of Learning and Assessment highlights the differences between direct and indirect assessment. Achievement tests are direct in that they allow students to demonstrate how much learning they have accumulated. By contrast, a degree or retention rate is, by itself, indirect because it is a consequence of learning. In most cases, we can be reasonably sure that a college graduate possesses the knowledge, skills, or attributes that we claim. But the degree is only a proxy, and provides little direct evidence of what a student has learned.
Another way to think about the difference is by thinking of a filter. With direct measures, the assessment information obtained is provided directly to the instructor through the instrument. Thus, direct evidence tells us what students know and can do, and even how well.