I teach a lot of advanced theory, and mark the papers almost always during the lesson. The small questions can be marked very quickly, the harmony and other creative work can be played through and discussed, and various options given, where there are mistakes. It is most useful, to do such work together. With essay type questions you can show students how to approach that kind of material, what to look for in comparing exam papers etc. There is no wasted time, I do not mark the theory without the student being involved in it at the same time. I have become very quick however in marking harmony and how to make melodies most efficiently. When the students go through the workbooks, you have to mark at the lesson anyway, because they have to take the book home again. The only time I mark papers outside of lesson time is when students dump a pile of papers on me at the last minute, one or two weeks before an exam. If I mark those, I feel it is necessary to add comment to it, that what I would otherwise have done aurally at the lesson, and I will charge them, because that is extra work only caused by the students leaving it too late. But I am a fast marker, and it is never much. If too much time would be taken up at the lesson, because the student has problems, then I just have to give them a longer lesson. I find however, that if the work is spread over the year, it usually works fine and can be fitted in the lesson. There are also sometimes weeks, that the student has not practised much, all the more time then
for explaining theory or aural.
If my students learn another instrument as well, I almost invariably end up having to teach them the extra requirements ( theory and aural) for those exams, because there are plenty of teachers, who will not do it. It is probably easier for pianists to teach it. To send your students home with a tape of the aural work is hopelessly inadequate, unless the student has a quick feel for it.