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Place a large skillet over medium heat. Once the pan is hot, add the sausage. Use a wooden spoon to break up the sausage. Cook for 8 to 10 minutes or until no longer pink and nicely browned.
Add butter to skillet and stir until melted. Sprinkle flour over sausage and stir to coat. Cook for 1 minute.
Pour in 1 cup of milk. Stir to incorporate the flour and prevent lumps. Pour in the rest of the milk and stir.
Bring to a simmer and cook until gravy thickens, about 8 to 10 minutes, stirring frequently to prevent the milk from scalding.
Remove gravy from heat. Stir in pepper, salt, garlic powder, and paprika. Sprinkle with sage before serving, if desired. Serve warm over biscuits.