Do language skills impair students' ability to assess their skill in other subjects? I'm sure many of you have heard of the Dunning-Kruger effect which basically states that people with low skills in a given area tend to overestimate their skill level relative to the general population. My question is how this capacity to assess one's own skills may be affected by language skills.

I am a TA at a German university in a first-year engineering course and I have a few students whose native language is not German. The class is entirely in German and relies on technical vocabulary more than e.g. math or physics. So obviously these students will have a harder time in the class [citation needed], and I'm not concerned about their skill level per se (that issue is covered in another question), but about their ability to judge how well they are doing in that class compared to other students, and also compared to what we expect of them.

Answering with your own personal experience and advice is of course welcome, but pointers to research on the subject would be greatly appreciated. It might support our department in helping these students better in the future.

PS: Feel free to suggest another stackexchange site if you consider this question unfit for academia.sx
I've taught esl  for international students trying to get into graduate school. One thing that I noticed is that the students did not know there is a difference between conversational English and academic English. They were totally convinced that since they could tell me their name and where the bathroom is that they were ready to begin graduate school. Literal ideas are easy to share in a second language but abstract ideas require real mastery.

Perhaps in your situation the students have the same misunderstanding in regards to conversational and academic German. When you lack expertise in any subject everything tends to look the same. 

Another potential concern could be language ego which essentially means that nobody wants to look dumb using another language. This may also cause students to inflate their language ability in order to fake competence they lack. Toning down the complex German and explaining everything in the simplest way possible with the simplest words will encourage them to indicate when they don't get it.