There are (at least) three different senses of "used to".
In the first, simplest sense, "used" is simply the past tense of "use", but it may refer to an ongoing kind of use. This is the sense that is meant in your question. "Formal exams are used to assess students" is an example of "passive voice", which is often a way of talking about actions without mentioning who performs them. It means the same as "We use formal exams to assess students". This form is recognizable because of the passive construction and is not specific to "used to". You can find more examples on the Wikipedia page for passive voice.
The second sense refers to something that was true in the past but now isn't, e.g. "When I lived near the beach, I used to swim every morning" or "newspapers used to be more objective". This sense is more closely related to the word "usually".
The third sense refers to familiarity or peace with an ongoing occurrence, e.g. "At first I hated waking up at 6am every morning, but I'm used to it now." This sense is also related to the word "usually" and is recognizable because the argument is a verbal noun, "I am used to running long distances" or "I am used to singing in front of an audience".
More information here: https://dictionary.cambridge.org/grammar/british-grammar/past/used-to