Formal papers do need to be edited, but not necessarily by the teacher. The most efficient way to make sure students edit for as many grammatical and stylistic flaws as they can find is to base a large portion of the grade on how easy the paper is to read. If you get a badly edited piece, you can just hand it back and tell the student you'll grade it when the errors are gone. Or you can take 20-30% off the content grade. Students get the message very quickly and turn in remarkably clean writing.
If a student continues to have problems editing a paper, you can suggest visiting the Writing Center to get some one-on-one help with a writing consultant.